In the UK, 88% of data breaches reported to the Information Commissioner’s Office (ICO) are caused by human error. The most common mistake is sending information to the wrong person. The number one culprit? Email. So what do you do? Peter Matthews, CEO of Metro Communications, knows what to do.

CFOs should not ignore the potential impact of such breaches on a company’s finances and reputation. Research for IBM suggests that the average cost of a data breach in the UK rose to £2.7m in 2018, with health, financial and service sectors most likely to experience breaches.

Few FDs would claim to be immune to accidental data transfer via email. So, what can you do if you inadvertently send a confidential message to the wrong person?

1. Recall or ‘unsend’ it

Email services offer different ways to cancel sent messages. In Outlook it is possible to recall and then delete an email providing it hasn’t been opened by the recipient. Gmail allows you to delay messages from leaving your outbox. If a sensitive email has been sent to a fellow employee then your IT department should be able to delete it, if they are informed fast enough.

2. Contact the recipient

Get in touch with the recipient as soon as you notice the mistake and ask them to delete the email without reading or sharing it. Request that they email you to confirm they’ve done so. Log the incident in an ‘cyber accident book’.

3. Report and act quickly

Report the incident internally and ensure it’s followed through to its conclusion. An employee of SSE Energy who sent a sensitive email in error promptly reported it in accordance with the company’s policies and procedures. However, SSE’s failure to notify the commissioner in a timely manner led to a £1,000 fine and negative publicity. The regulations have since been amended so that directors, managers and company secretaries can be fined up to £500,000.

4. Inform and advise customers

Good customer service goes a long way. Boeing was mocked for failing to use its own data protection software to prevent an accidental breach which compromised the personal data of 36,000 customers. But it was applauded for informing customers about the nature of the incident, taking action to ensure files were deleted, and giving detailed advice about how customers could check their personal data wasn’t being misused.

5. Notify the regulator, if necessary

Inform the regulator within 72 hours if you believe there’s a risk to customers. Even where you don’t feel an incident is notifiable, it is still worth recording, internally. This will help you review incidents as part of a health check and if you ever have to demonstrate regulatory compliance it could prove invaluable.

Once you’ve contained the incident, revisit your strategy and consider the need for other forms of action such as staff training, policy reviews, access rights, restrictive covenants and encryption. Data classification that ‘weights’ the sensitivity of each file and document on your company’s drive and then links highly confidential information to a closed group of authorised recipients, with blocks on copying such information onto memory sticks, can be helpful. Preventative tools like this make it difficult to email the wrong data to the wrong person and they also log user behaviour, flagging up employees who try to reclassify data so they can send it out of the business.

The law doesn’t distinguish between deliberate and accidental breaches, so don’t expect a discount on fines for damaging disclosures caused by an honest mistake, and don’t be surprised to find lawyers queuing up to help those whose financial, personal or health data has been incorrectly transferred.

But let’s look at it positively. Employee error is a significant contributor to data loss, but it is easier to prevent and generally takes less time to control than a malicious hack. Indeed, many accidental incidents can be contained or even prevented by steps so simple that everyone should be taking them. However, if you’ve decided you want to take a ‘belt and breaches’ approach then it’s time to trust yourself less. Preventative measures such as data classification will ensure you send that sinking feeling to your deleted folder once and for all.

Chief Financial Officers (CFOs) have never had more on their plate. According to a recent McKinsey Company report, five functions other than finance now report to the CFO: risk, regulatory compliance, M&A, IT and digitalisation. Stretching themselves across all of these areas makes CFOs not just extremely busy, but puts a lot of responsibility on their plate, especially when they’re doing all this while facing economic uncertainty, strict regulations and scrutiny from investors. When you consider that these leaders, like the rest of us, only have a limited number of productive hours in a day, then how can we make sure they’re focusing on the most important parts of their jobs?

In our demanding business landscape, we need to understand that the CFO is required to be a true strategic leader, not just the head of the finance department.

For CFOs, thriving at work has, for a while now, meant more than being good with numbers. Especially in today’s terms, it means ‘getting ahead’ of any uncertainty and equipping themselves with the power of future-gazing, being able to look ahead and apply reliable insight to any future scenarios. Nearly half of businesses have changed their models to become more agile and the CFO is expected to be the driving force behind that.

For CFOs, thriving at work has, for a while now, meant more than being good with numbers.

The CFO has been given all of their additional responsibilities thanks to their unique position at the helm of the organisation. Our heads of finance are among an elite few with access to data pertaining to all parts of the business. This is especially the case as regulations and compliance laws become stricter, resulting in different business units, even within one company, putting access to their own individual data sets on lock-down. And, if you only have a few people allowed a true oversight of connected data and processes in an age where businesses are driven by data? You take full advantage of it.

Here’s where we need to empower the CFO to do all they can to make the best use of all business information; both by having a platform from which they can easily access and understand it, and secondly, making sure they have enough time in their day to make full use of it.

It’s under these conditions that we’re seeing CFOs start to turn to ERP solutions with embedded artificial intelligence. By both freeing up and maximising their time, they help make the best use of the productive hours they have available. After all, CFOs are still dedicating far too much of their time to tasks that just keep the finance function up and running. Requisitions, purchase orders and vendor invoicing need to happen. But, when cloud-based ERP with automation comes with the intelligent financial management capabilities to handle these routine duties, it not only frees CFOs up from doing them – but makes them more reliable as it eliminates human error. Given recent Accenture research showed finance staff spend an average of 60% and 70% of their time on tasks such as processing transactions, accounting, controlling, compliance and reporting, that’s a lot more time back in their day. This time can instead be spent on the more strategic parts of their job, finding insights that empower the valuable guidance they can give the CEO and help to drive the business forward.

Organisations need their leaders to be pushing themselves where it matters, focusing as much as possible on the bigger picture and going above and beyond in their mission to perfect their business strategy. Equipped with cloud-based ERP applications that add automation to the equation, CFOs can speed up manual tasks as well as eliminate time-consuming and costly upgrades from their routines. Imagine a future where the CFO is able to juggle all the jobs they have at hand, ensuring everything happens as effectively as possible, while also making sure the largest chunk of their time is dedicated to progressing their business. An attractive proposition, right?

For more information, please go to: https://go.oracle.com/LP=79114?elqCampaignId=169045 

Website: https://www.oracle.com/

Renata Sheyner from Fiserv says that to varying degrees, this transformation can extend to day-to-day financial processes, and one of the ripest areas for improvement is reconciliation.

While there may be no silver bullet that solves every reconciliation challenge an organisation may face, automation comes close. Automating this time-consuming and error-prone process has the potential to boost the bottom line and reduce the risk of compliance deadline misses and mistakes.

Addressing Perils of the Financial Close
For organisations with millions of transactions, closing the books is no easy feat. Quarterly, half-year and annual financial reports — along with other forms required by regulatory agencies — keep the accounting team working to meet deadlines year-round.

Financial statements face external scrutiny from regulatory agencies in every country in which the company operates. Additionally, there are shareholders, boards of directors and in-house audit and compliance teams analysing the numbers.

There is great pressure to avoid mistakes, and no one feels that pressure quite like the CFO who signs off on the books. By attesting to their veracity, he or she assumes a great deal of personal liability. But manual reconciliation processes used by many companies today provide no audit trail showing how the balance sheet was derived. As a result, executives must certify the data without visibility into how the numbers were achieved. And once financial leaders sign off, there isn’t an easy way to backtrack and gain visibility into the data they approved.

Manual reconciliation processes used by many companies today provide no audit trail showing how the balance sheet was derived.

Without an automated process, reconciling items such as payments, disbursements, commissions, and bank accounts at the transaction level is a labour-intensive and error-prone process. In addition, due to the lack of an audit trail, companies often write off unresolved exceptions because they cannot trace an error back to the source — raising the question of possible fraud.

Exacerbating the problem are the large stores of disparate data that must be taken into account during the reconciliation process. Data can come from internal departments or third-parties; in the form of text files, spreadsheets or PDFs; it can involve multiple currencies; and it can refer to a payment, customer information or a myriad of other data. Different sources and different structures of data make manual reconciliation difficult.

Automated reconciliation can enable companies managing high volumes of transactions to track, match and archive all incoming data, and connect that data processing directly to certification. Reducing the risk of error could save companies thousands of dollars in noncompliance fines and protect the company’s reputation among customers, peers and regulators.

Getting a Better Line of Sight
By bringing the full range of transaction-level and balance-level data together into a single system and automating the entire reconciliation process, from data acquisition and matching through period-end approvals and reviews, companies can form a complete account reconciliation picture. This enhances visibility into exceptions, helps eliminate manual interventions and facilitates rapid, cost-effective resolutions. Automated checks help ensure compliance with corporate and regulatory controls.

Centralising data in one place and integrating automated reconciliation and certification processes allows the data to be traced to its source throughout the entire financial close lifecycle — from data ingestion through matching, exception management, reconciliation, certification and signoff. It becomes trackable and transparent.

Integration of data and matching transactions using an automated process can cut the risk of error by as much as 50% (based on results from organisations that use an end-to-end reconciliation solution). Built-in audit controls can also help ensure that regulated financial standards are met.

A centralised view of transactions and the overall reconciliation lifecycle also makes it easier to mitigate the risks of fraud and write-offs related to unexplained exceptions. End-to-end reconciliation automation, combined with data agnosticism, facilitates the identification and resolution of exceptions. A data-agnostic tool can pull in massive amounts of disparate data related to payment and disbursement statuses and more, and funnel it through an automated matching system to pair the right data with the right transaction. This can lead to an overall 75% reduction in write-offs (based on results from organisations that use an end-to-end reconciliation solution).

 Gaining Efficiency and Reducing Costs

By minimising the need for manual research or interventions during the reconciliation process, companies can achieve significant efficiency improvements and lower operational costs while enabling staff to perform more value-added work. Reducing manual tasks and implementing automated reconciliation can lead to a 60–80% gain in efficiency (based on results from organisations that use an automated reconciliation solution). Further, it can reduce the time it takes to close the books by two to four days.

Here are some of the potential savings:

• Reducing audit costs by 25% by providing electronic access to accounts and required approvals;
• Eliminating document storage fees and printing costs;
• Eliminating cost of compliance deadline misses and potential fines;
• Reallocating staff to higher-value activities;
• Reducing write-offs.

In addition to realising savings, organisations also gain greater visibility and confidence in the accuracy of financial reporting, which helps lower compliance and reputational risks.

Increasing Value for the Bottom Line

Finance teams are evolving to work as strategic partners in their organisations, helping drive tangible business results. A fully-automated and integrated end-to-end reconciliation solution can ease the pain of financial preparation while facilitating speed, accuracy and efficiency. In addition, when these teams work with tools that do some of the number-crunching for them, they can focus on tasks that provide more value for the bottom line, such as exception investigations and strategic projects such as mergers and acquisitions.

The promise of digital transformation is vast, and automated reconciliation is a solid starting point for organisations looking to tap into its potential today.

Website: https://www.fiserv.com/index.aspx

This is why Dean McGlore from V1 believes that in 2019, we’ll see CFOs switch their focus from AI to automation.

In 2019, automation – also known as Robotic Process Automation (RPA) – will move from the shadow of Artificial Intelligence. And rightly so. Like AI, it can relieve teams from mundane and repetitive work to focus on higher-value and strategic activities. But, unlike AI, automation is easier to access, expand. It’s a forecast echoed by experts around the world. Forrester, for example, predicts that the RPA market will reach $1.7bn in 2019 while Advanced has found that 65% of people would be happy to work alongside robotic technology if it meant less manual processes.

Over the next year, we will especially see RPA climb in popularity within the finance function. Teams will use it to automate the data capture and processing of supplier invoices, sales orders and other accounting documents. By automating these manual and usually administrative heavy processes, finance teams can drive unprecedented productivity and efficiency levels as well as benefit from increased visibility into the entire organisation and better data for reporting to the board.

RPA will help with a host of other external factors too. With the General Data Protection Regulation (GDPR) now in place, it will help the finance department (and indeed other areas of the business) get their data in order. RPA is a good starting point for GDPR compliance, as businesses can store, manage and track electronic documents and electronic images of paper-based information in one place and in real-time. This ensures compliance requirements by providing traceability on all documents.

Automation technologies will only be effective if the people using them understand how they work, appreciate their true potential and recognise the value they bring.

And then there is Brexit. Because RPA helps free up time for the finance team, more resources can be devoted to planning for when Britain leaves the EU in March. RPA provides an opportunity for businesses to scale up or down volume to meet demand from outside of the EU, for instance, as well as to assist the development of new products and services for new markets – all of which is essential for business growth. Moreover, with the threat of other countries hiking up tariffs after Brexit, RPA has the potential to replace the need to hire more employees and it can also help keep production costs to a minimum.

Regardless of the reason behind RPA adoption, CFOs will need to make sure that there will be a change in culture among the workforce. Automation technologies will only be effective if the people using them understand how they work, appreciate their true potential and recognise the value they bring. Arguably, investing thousands on pounds on technologies such as RPA won’t be effective if users don’t believe in them. A robust upskilling and training programme is necessary to ensure future digital success.

However, saying that businesses will turn their backs on AI in 2019 was never my intention – Artificial Intelligence will still play a key part of many organisations’ digital transformation plans. What RPA does is allowing businesses to test the water. Planning and testing automation software to see the impact it has on your operations and staff is a great indicator of the benefits that large-scale AI deployment could bring in the future – minus the fear of large-scale failure.

Planning and testing automation software to see the impact it has on your operations and staff is a great indicator of the benefits that large-scale AI deployment could bring in the future – minus the fear of large-scale failure.

In the future, we will see RPA and AI working together to transform the finance function like never before. With a combination of the right technology with AI handling decisions and chatbots managing customer queries, completely unmanned Accounts Payable (AP) for example is perfectly achievable by 2020 as a result of invoice automation.

RPA will be the first step for many and businesses looking to realise the power of automation over the next 12 months should take the following steps:

• Audit your processes and identify which involve low-skills, manual and repetitive tasks, such as many of the core, yet daily finance functions of invoice processes;
• Determine the key technologies that your business needs to become more agile, competitive and productive. RPA and AI have different capabilities, so decisions must be made based on need, rather than hype;
• Understand which new technologies are best placed to modernise or integrate with your organisation’s existing legacy systems;
• Ask yourself what the potential benefits of RPA and AI are to your finance team. Understand employees’ pain points before deciding which digital tools will help;
• Appoint a digital pioneer – someone that will drive positive technology change and that has the backing of your CEO and the rest of the C-Suite;
• Engage with your younger workforce. Typically, they are more digitally savvy and open to change. Find out what technologies they think will make a real difference.

RPA has the potential to change the face of finance for good. And, eventually, it will become ubiquitous among all key processes.

Finance Monthly hears from Colin Rowland from Apptio who asks the question: “Is this a trustworthy way to manage spend that is often billions of dollars across thousands of vendors and contracts, hundreds of employees, and more?”

Since the spreadsheet was popularised in the 80s, it has become the tool of choice for CFOs managing data and tracking costs across businesses. But in today’s digital age, spreadsheets are too cumbersome, slow, complex and constantly changing, to provide truly comprehensive oversight of costs and data in business.

Nowhere is this more evident than in managing technology spend, and it is abundantly clear that the IT department needs to upgrade its approach in order to properly provide CFOs with the monetary direction necessary to make smart, informed and strategic budgeting and investment decisions.

CFOs are required to oversee budgets across the whole business, yet while sales and finance have a wealth of tools such as CRM and ERP to assist them, there has been no purpose-built system for the technology department. With Gartner predicting that by 2022 businesses will be spending more than $3.9 trillion on IT, there is a huge level of pressure on finance professionals who need to track and manage these outgoings.

CFOs are required to oversee budgets across the whole business, yet while sales and finance have a wealth of tools such as CRM and ERP to assist them, there has been no purpose-built system for the technology department.

Kickstarting the culture change

To kickstart a move away from managing spend in static spreadsheets, organisations need to implement a culture change when it comes to technology, tracking spend, and understanding value of investments. Once viewed as simply a running cost of the business, technology is now a key deliverer of business value and revenue generation. That means the way investments are tracked, managed and communicated needs to be clear, open and transparent between IT and the business in a way that was previously unnecessary.

One method some organisations are adopting is the discipline of Technology Business Management (TBM). It focuses on providing a practical framework for finance and IT leaders seeking to manage and communicate the value of technology spend. It encourages translating IT usage and cost data from a list of bills into a source of business intelligence that can drive digital innovation. This allows the CFO to make more informed decisions when it comes to IT spending.

However, legacy tools simply don’t provide the added value needed to enable the communication and discussion needed around technology costs. It’s effective for data input and manipulation, but that’s no longer enough when complex technology costs need to be given to finance leaders in a digestible manner. Where this budgeting data is stored in various spreadsheets that are all siloed from one another, it can be nearly impossible to settle upon a single source of truth for the overall figures.

Spreadsheets do not enable actionable insights and cost analysis needed in the modern technology landscape for several reasons: they’re clunky, they’re rigid, and they’re slow.

Managing technology costs using… technology

This is where custom tools come in. They can provide additional capabilities and processes that enable businesses to not only accurately track their IT costs, but analyse them quickly and effectively, providing insights which are intelligible for those not well-versed in technology. And the more advanced technology solutions will be able to leverage machine learning to make this automated and free up employee time and resources for more value-additive work.

IT and finance leaders can then work together to drive forward business strategy based upon this knowledge. Spreadsheets do not enable actionable insights and cost analysis needed in the modern technology landscape for several reasons: they’re clunky, they’re rigid, and they’re slow.

Take the complex nature of public cloud spend, for example. A pay-as-you-go costing structure generates masses of data in by-the-minute billings that need to be tracked; meaning there is no guaranteed regular monthly spend to budget against. Even the most finely-tuned spreadsheet would struggle to track the thousands of lines on a cloud bill from separate business units, especially when many businesses are now embracing cloud services from multiple vendors.

The agility that disciplines such as multi-cloud bring also means that businesses must be prepared to adapt their cloud strategy quickly to suit their needs. Approaches that work now may be obsolete in three months’ time, and it is necessary to have a solid framework and the right tools to allow such changes to progress smoothly. For example, using Apptio’s TBM solutions, Unilever was able to move away from legacy infrastructure to cloud and increase the company’s digital innovation budget by more than 20% to provide consumers with an ‘intelligent’ buying experience online and in-store.

When it comes to technology, using spreadsheets to track and manage spend is holding businesses back.

Another complicating factor is the staffing cost associated with manning spreadsheets. Consolidating various spreadsheets to get a transparent view of IT spend can be a painstaking task, taking many hours and potentially resulting in human error. Custom tools can work to streamline and speed up these processes, while ensuring that errors do not occur. This allows IT teams to spend their time more effectively elsewhere, improving the overall efficiency of the department.

When it comes to technology, using spreadsheets to track and manage spend is holding businesses back. While custom tools may necessitate an upfront investment, they are undoubtedly worthwhile as a flexible long-term solution, providing agility, speed and clarity where spreadsheets cannot. By using such tools in conjunction with the principles of TBM, CFOs and the IT department can move away from spreadsheets and work towards a partnership in which insights into technology spend form a key part of the business’s ongoing strategy.

This week Finance Monthly hears from Mohit Manchanda, Head of F&A and Consulting EXL Service UK/Europe at EXL, on the ever-evolving DNA of a CFO.

Business leaders have to stay relevant and ahead of the curve and adapt to the constantly evolving world of finance. This development has become ever apparent for the Chief Financial Officer (CFO) whose role now includes, strategies, operations, communication, and leadership as well as building knowledge surrounding the impact of emerging technologies within the finance sector.

Business outcomes

Advances in data software and automation are opening up avenues for businesses to generate valuable insights that can lead to major productivity improvements. Within the finance and accounting areas, technology is becoming a catalyst for change, driving innovation and providing operational efficiency in business-critical functions.[1] It is essential for CFOs to rethink how to utilise this opportunity to streamline their processes for efficiency, compliance and risk management.

CFOs have many objectives to commit to and by using cutting-edge solutions to enhance the transparency and accuracy of financial data, they can better manage the financial management process. Using automation within finance helps to free up high-value tasks and alleviates the pressure on the CFO to perform traditional activities such as, transaction processing, auditing and compliance.

Human X Machine

It is becoming more and more evident that the CFO will be looked up to, to drive the utilisation of new technologies, however they should try not to get ahead of themselves and forget about the day to day business. Becoming too attached to the hype surrounding Automation and Analytics can put other business objectives on the back burner. For example, managing costs and coming up with new ways to generate profit are tasks that require the CFO to use their own industry knowledge rather than relying on data or analytics.

New technologies can speed up processes and lessen tasks for CFOs; it is important for them to make choices and identify processes where AI, Automation and machine Learning adds value. An investment in one area of a business can create savings in another. In most companies, a high percentage of staff still perform tasks that can be automated through Machine Learning, and these tasks can be performed exponentially faster if self-learning algorithms are applied.

Given the pace of technological change, CFOs should carefully evaluate their point of entry and roll out multiple pilots or proofs of concept (PoC) to test and secure validation before deploying these new technologies.

New technologies can speed up processes and lessen tasks for CFOs; it is important for them to make choices and identify processes where AI, Automation and machine Learning adds value.

Introducing innovative technologies within the finance sector does aid in mitigating lesser tasks for the CFO, however it is not only the technology alone that enables a more streamlined work process. By combining talent, skill set and technology together creates a unified approach, resulting in major improvements throughout the business. For CFOs it means that they can move away from everyday traditional accounting tasks, therefore freeing up time to use their industry knowledge to focus on new business opportunities and provide strategic guidance.

Data & Domain

Organisations regardless of their size will collect large masses of data of which most will never be utilised. It is important for CFOs to understand which data sets are of value and which ones aren’t. Some may be needed for regulatory purposes and others for commercial predictions and products, however by disregarding the sets that are not of value helps to create a more streamlined result.

Starting to experiment with data will help identify potential risks before they are put into production. Machine Learning is all about data experimentation, hypothesis testing, fine tuning data models and Automation. Bringing data, technology and talent together in the form of ideation forums, innovation labs and skunk work projects allows discrete data to be tested for the first time. By bringing in Machine Learning, it can identify hidden patterns that could potentially harm the production process.

In order to drive the business forward, CFOs can translate data and combine it with industry knowledge. The data helps to provide insight within the industry which then contextualises their business decisions. Using data driven decisions CFOs can be confident in their choices within the organisation and use it to back up or prove their conclusions.

Putting data under the business lens enables a CFO to understand the repercussions that can occur through the improper use of big data. A business’ reputation is on the line if data violations occur. Not only will this result in legal sanctions, it will limit business operations, which will have a domino effect on resources and a company’s position compared to its competitors.

Therefore, CFOs should review all of the potential consequences before putting their experimented data findings into practice, including any legal, financial, and brand implications. This is where industry knowledge comes into play, using an expert committee on business data to inspect algorithms for unintentional consequences, results in less risk than normally associated with Machine Learning.

For CFOs to thrive in the digital age, it is essential for them to have a unified approach combining industry knowledge, data, technology and talent.

For CFOs to thrive in the digital age, it is essential for them to have a unified approach combining industry knowledge, data, technology and talent. By employing new technologies, data, talent and knowledge as one package, CFOs can add continuous learning opportunities for critical talent pools, and assist in the overall improvement of productivity within the business.

[1] https://www.business2community.com/big-data/17-statistics-showcasing-role-data-digital-transformation-01970571

With businesses embracing big data, new tech and digital media, the role of traditional CFO is evolving from financial expert to strategic partner, data analyst, talent curator and more. With the support of several data streams, James Booth, Chief Financial Officer at Instant Offices explains for Finance Monthly what this new era of the multidiscipline strategist means and how there is more potential than ever for CFOs to be the architects of change within business.

Five Factors Keeping CFOs Up at Night

1. Brexit

Around 75% of CFOs worry Brexit could have a negative impact on business in the long-term, compared to just 9% who don’t, according to Deloitte. Along with Brexit risks, weak demand and the prospect of tighter monetary policies are ranked as the top worries for CFOs in 2018. Despite high levels of uncertainty across the board, research shows CFOs are still highly focused on growth plans, and the level of desire to expand business over the next year is at its highest since 2009.

2. Skills Shortages

According to research, 44% of CFOs have reported recruitment difficulties and skills shortages in 2018. To add to the challenge, The Open University Business Barometer revealed a massive 91% of UK organisations say they have had difficulties hiring skilled employees in the last 12 months.

3. Rising Stress Levels

78% of UK CFOs believe stress levels are set to rise in the next two years as workloads increase, business expectations grow, and companies face a lack of staff, according to Robert Half. Research also shows CFOs expect their finance teams’ workloads to increase, while 52% are planning to hire interim staff as a short-term solution.

4. Big Data

Research firm IDC predicts that by 2025, we’ll see 163 trillion gigabytes of data output every year. And a recent study by Accenture suggests that by 2020, 90% of a CFO’s time and efforts will be spent on working with data scientists to turn data into actionable insights that organisations can use for strategic decision-making.

5. Increased Cyber Security Threats

Studies from Verizon show that 59% of cybercriminals are motivated by financial gain and are likely to target finance and HR – areas which fall into the CFO realm – suggesting CFOs are going to be expected to take a proactive approach to cybersecurity.

Top Five CFO Priorities for the Upcoming Year

In Q2 of 2018, CFOs listed the following as strong priorities for business in the following 12 months:

1. 49% say increasing cash flow is the top priority
2. 47% say reducing costs
3. 37% say introducing new products and services and expanding into new markets
4. 18% say expanding by acquisition is a priority
5. 14% say raising dividend or share buybacks

What Skills will CFOs Need by 2020?

The CFO Must Become a Leader of Innovation: New tech, including AI, will become a core part of the innovation strategy within businesses looking to remain competitive, and CFOs will be required to understand the opportunities presented by new tech to drive growth. By 2020, 48% of CFOs are set to be using AI to improve performance.

CFOs Must Embrace Big Data: According to a report by the ACCA and IMA, the CFO and finance team is set to be at the heart of the data revolution. In order to make sense of the large volumes of data the world will be generating by 2020, CFOs will need to be able to accurately interpret data to generate quality, actionable insights for CEOs and board-level decisions.

The CFO Must Manage Risk Under Scrutiny: As tech grows and presents more complex risks to business, expectations on the CFO will be high. They’ll be required to implement and manage cutting-edge risk management processes within the finance department and business as a whole. A proactive approach towards threats will be key. One report by NJAMHA showed four in ten finance chiefs currently own or co-own cybersecurity responsibility within their organisations.

The CFO Must Prepare Talent for the Future: Prepping talent for a finance role was once the domain of HR, but in order to prepare new employees for the future of finance, CFOs are going to be required to increase involvement to ensure new employees can multitask, show technical competence and handle business strategy. Around 42% of CFOs are also prioritising soft skills as a key element for future hires.

The CFO Must Be a Leader in a Rapidly Changing Workplace: With the consumerisation of real estate becoming a global trend, more businesses are choosing an agile approach to office space to expand into new markets, reduce costs, increase networking opportunities and improve staff happiness. Tied into this, the modern CFO will need to develop leadership skills to not only manage talent but also implement development strategies that work across remote teams with geographic and language differences.

Today, the role of the CFO has evolved from financial expert to a multidiscipline strategist. In addition to traditional accounting and finance responsibilities, by 2020 research shows the top priority for CFOs will be keeping pace with technology and harnessing big data.

Nowadays, CEOs expect CFOs to have an impact on business direction and strategy more than ever before. And while the question of who owns analytics is still an open question across sectors, according to a report by Deloitte, finance is the area most often found to invest in analytics at 79%, and CFOs can use it to bridge the gap between strategic and operational decision-making.

To hear about the future of the finance function and the need for bringing a data scientist into the finance environment, Finance Monthly speaks with Angela Mazza Teufer, Senior Vice President of ERPM at Oracle.

We are living in the age of data, one in which both traditional quantifiable information and unstructured data is being hoarded in huge amounts. It takes a specific set of skills to draw useful business insight out of this data, and that is why data scientists have become so crucial to the modern business.

The introduction of GDPR regulation earlier this year has forced companies to become more data literate, and has in some cases seen them appoint Chief Data Officers (CDOs) or build teams responsible for overseeing data governance.  This represents an important step towards a future where all businesses are able to make the most of their data, but it takes more than data management to turn data into value. This is where data scientists become crucial, and particularly in select business functions.

As a function that has always dealt in data and whose remit has expanded significantly in recent years, the finance team has a great deal to gain by bringing advanced data expertise into the fold.  Finance teams have traditionally been made up of people with a specific set of practical skills, including management accounting, auditing and forecasting.  While these remain important, businesses increasingly expect their finance department to play a more active role in driving organisational strategy, which requires a more diverse set of abilities. Data science is the most important of these.

What data science brings to the table

One of the biggest challenges faced by businesses is how to make sense of the enormous volume of data they collect, from customers, internally, and increasingly from third parties. Finance teams could easily spend all of their time just gathering and analysing data on business assets and performance, but the challenge today is to distil this information into something meaningful, especially as even financial reports are increasingly filled with ‘intangible’ assets that are not so clearly defined as revenue and profit, such as customer reach.

Having a data scientist embedded into the finance function will provide the specialist understanding and valuable resource to combine information in all forms, identify patterns that might otherwise have gone unnoticed, and most importantly draw out actions for the CFO or finance director to take to the board.

This also frees up other members of the team to focus on their areas of expertise rather than expecting them to pick up a whole new set of skills and take on a role they never signed up for. No matter the department, trying to ‘upskill’ an employee in data science underplays the importance of the role and makes light of the years of training and experience that specialist data scientists undertake.

Often, some of the most valuable information companies collect today starts life as an unstructured, chaotic set of data points. It ranges from concrete demographic data on their customers to news events and sometimes even weather patterns. The task of combining all of these streams of information and making sense of them requires the full-time attention of a dedicated specialist. It is certainly not something that core finance employees can accommodate on top of their existing responsibilities, nor can it be effectively undertaken without the appropriate training.

In short, it is much more effective to bring a data scientist into the finance environment and educate them on its specific needs, data types and ways of working, than it would be to pile complex data science responsibilities onto existing team members.

The future of the finance function

The changes to the role of the CFO and the growing demand on the finance function to be more forward looking and predictive have been well documented, but many organisations still find themselves in a period of transition. They understand what’s expected from them but are still setting up their teams and processes to deliver on this expanded brief.

It is enough of a challenge to forecast accurately in periods of uncertainty, without having to collect, analyse and process data from beyond the balance sheet as well, but it can be overcome with expert support.  By bringing the right mix of skills into the finance team, companies can develop the skills they need quickly and start reaping the benefits today.

Chief Financial Officers (CFO) are playing a critical role in driving digital disruption across the organization, according to new research from Accenture. Today’s CFOs oversee more than just the finance function and are now integral players in directing enterprise-wide digital investments and managing their economic outcomes and impacts.

The research report, The CFO Reimagined: From Driving Value to Building the Digital Enterprise, finds that CFOs have expanded beyond their traditional finance roles into areas that have broader consequences for the whole organization. In the UK, eight in 10 CFOs see identifying and targeting areas of new value across the business as one of their main responsibilities. More than three quarters (78%) believe it is within their purview to drive business-wide operational transformation.

"CFOs are increasingly stepping out from the confines of their role to act as strategic advisors as well as innovators across the entire enterprise," said David Axson, Senior Strategy Executive Principal at Accenture. "In an era of unprecedented disruption, this repositioning of the role will continue as CFOs take the role of digital stewards, using data to drive value and improve efficiency while mapping out the digital investments required for their organisations to remain competitive."

CFO as the Digital Investment Sherpa

UK CFOs are emerging as drivers of the digital agenda, with 80 percent heading up efforts to improve performance through adoption of digital technology, and 73 percent also exploring how disruptive technologies could benefit the entire organization and the business eco-system. Not only are CFOs carrying out their own tasks faster and better through automation, they’re also increasingly ushering in the “digitalization” of other functions and finding new ways to use technology to change business models and open new revenue streams.

CFOs: Get Your Data House in Order

The standard CFO to-do list is shifting towards strategic planning, advisory and analytics roles as CFOs continue to automate routine accounting, control and compliance tasks. Automation of these finance duties is enabling the finance function to focus on newer and more challenging tasks and bring the C-suite together to act on insights gleaned from data analysis. Today, 34% of finance tasks are carried out by technology; by 2021, almost half (44%) of these duties will be taken over by automation.

“CFOs’ use of data is expanding to other parts of the business. As a result, they will need to be more entrenched in transformational technologies such as AI and analytics to usher in digitization of the broader organization, create new business models and unlock new revenue streams,” said Dr. Christian Campagna, senior managing director, Accenture Strategy, CFO & Enterprise Value. “The CFOs who step up to manage these opportunities will be the true guardians of the enterprise.”

As the role of the CFO continues to evolve, so do the skillsets required to become a finance executive. Today’s finance function must include employees with a wide range of capabilities, from data visualization to flexible thinking. Most CFOs recognize that finance skills will continue to move away from core finance to advanced digital, statistics, operational and collaborative skills (79 percent). And more than three-quarters (76%) say the change must be rapid and drastic, as traditional finance roles may soon become obsolete.

Future Finance Talent Is Calling

The biggest challenge for CFOs will be recruiting or training the talent to understand how to collect data and gain insight from data. Almost 9 in ten (87%) UK CFOs agree that data storytelling is an essential skill for today’s finance professional. They must be more open-minded and collaborative to work effectively with and serve as strategic advisors to leaders in other business functions.

“It feels like there are two camps for what people look for in a CFO: the control or accounting background versus a more strategic finance role who partners with the CEO,” explains Chris Weber, CFO and executive vice president, Halliburton Company. “Over time, I think the shift has been towards this second role, even if that means the candidate isn't an accountant by training.”

(Source: Accenture)

With Governments increasingly aware of the moral and fiscal costs of white-collar crime, the Dutch crime authority’s decision to hit ING, the Netherlands largest financial services provider, with fines totalling €775 million is of little surprise.

Tackling money laundering is currently high on the national and international agenda of many countries; the EU recently proposed providing the European Banking Authority with greater powers to sanction banks of member states that may be implicated in such activity.

In the case of ING, the bank has been forced to pay out the substantial fine for failing to flag abnormal transactions, and financing terrorism “structurally” by not verifying the beneficiaries of client accounts. The Dutch public prosecution service said that it found “clients were able to use accounts held with ING for criminal activities for many years, virtually undisturbed” from 2010 to 2016. The settlement, which is the largest ever imposed on a company by the Dutch prosecution service, is made up of €675 million in fines, and €100 million as the return of illicit gains intended to deter future violations.

The bank’s CFO has since announced his decision to step down following growing backlash. In addition, measures against ten employees were taken, ranging from dismissals to clawing back bonuses, with the prosecutor accusing the bank of “culpable money laundering”.

This is not a stand-alone case either; watchdogs have clamped down on Credit Suisse and Danske Bank this month over similar money laundering concerns. With authorities prepared to take a hard-line stance against money laundering, there will be severe reputational and financial consequences for organisations which – however unintentionally – enable this offence.

The focus is not simply on the culprits of money laundering, but on ensuring perpetrators have fewer tools to commit such crimes. The relevant authorities will increasingly take a punitive approach to financial institutions with lax crime prevention strategies. Financial institutions, whatever their size, must ensure their tools are inaccessible to those seeking to commit financial crime, or otherwise face extensive fines comparable to ING’s.

This is no easy task and requires a significant investment of time and resource. Banks must ensure they have robust financial crime compliance strategies and programmes in place with appropriate training to reduce risk and mitigate the consequences. This was a point that was not lost on Ralph Hamers, ING’s CEO, who stated that “although [ING’s] investment … [has] been increasing since 2013, they have clearly not been to a sufficient level”.

However, matters should not stop there; processes require frequent review given that criminals adopt increasingly sophisticated strategies to commit offences. Banks, therefore, must remain proactive and vigilant. To this end, the Dutch prosecutor noted that ING’s compliance department “was understaffed and inadequately trained”. In the case of ING, compliance failures were exploited by clients for years for money laundering practices before it was detected.

Effective streamlined processes, such as customer screening and alert processing, informed by risk assessments and financial crime regulations should leave little room for error during due diligence activities.

Iskander Fernandez, White Collar Crime Expert and Partner at commercial law firm BLM

Ryanair Holdings Plc Chief Financial Officer Neil Sorahan discusses the company's earnings and performance and the possible implications of a "hard" Brexit. He speaks on "Bloomberg Daybreak: Europe" as the discount airline posted a 20 percent drop in first-quarter profit and warned that sporadic walkouts by trade unions, along with regional traffic-control strikes, are starting to make customers hesitant to book flights.

CFOs no longer rate Excel as most important skill, turning to new technologies, automation.

Adaptive Insights recently released its global CFO Indicator report, exploring finance automation progress and expectations of CFOs. The survey reveals that CFOs are embracing automation across various areas of finance, driven in large part by a requirement to be more strategic and provide better analyses. Financial reporting and period-end variance reporting top the list of automated processes today, according to the survey.

Automation initiatives are also impacting required skills for finance professionals. Whereas two years ago, 78 percent of CFOs considered proficiency in Excel as the most important skill for their FP&A teams, only 5 percent feel the same today. Looking ahead, only 7 percent of CFOs list better Excel skills as important for new hires. Instead, CFOs rated the ability to be adaptable to new technologies as the top skill for new hires, signaling a shift in desired skillsets for finance professionals in the future.

“We’ve seen CFOs increasingly take on the role of chief data officers in their organisations,” said Jim Johnson, CFO at Adaptive Insights. “At the same time, CFOs recognise the limitations in the way they manage and analyse data today and know it will only get worse with the proliferation of more systems with siloed data. That’s why Excel skills aren’t ranked as a top skill any longer. Proficiency in Excel is a given today. The new skills finance leaders need are those that can use technologies to access, analyse, and amplify data for insights to better manage the business.”

Limitations with manual processes like spreadsheets were recently documented in a Wall Street Journal article, Stop Using Excel, Finance Chiefs Tell Staff. The article noted that ubiquitous spreadsheet software that revolutionised accounting in the 1980s hasn’t kept up with the demands of contemporary corporate finance units, citing a lack of automation.

(Source: Adaptive Insights)