Financial Services CFO

A chief financial officer (CFO) is a company’s highest-ranking financial professional and oversees the business’ financial health. Their responsibilities include dealing with cash-flow management, scenario modelling, financial planning, and analysis. CFOs are increasingly earning the nickname of ‘deputy-CEO’ for their role as chief advisors to the CEO and Board of Directors.

Most financial services CFOs will have a professional background in accounting or finance with many also having experience in business administration and management.

Today’s CFOs are expected to have leadership and managerial skills with industry knowledge that allows them to develop strategies and react to market movements.

CFOs have four diverse and challenging roles that form the basis of their responsibilities. The traditional roles of acting as a company steward and operator remain in place, reflecting the role’s former accountancy focus.

The evolution of the role of CFO requires them to be strategists and catalysts in decision-making to boost business performance.

The role of CFO has evolved drastically in recent decades outside the realms of financial compliance and reporting, taking on greater responsibilities within areas like business strategy and new developments like digital transformation.

Previously CFOs have focused on optimising financial processes and reducing costs. Today’s CFOs work to support the company’s business model transformation through automation and financial processes. They work closely with the CEO and stakeholders as a financial steward and strategic catalysts that can drive growth.

Financial services CFOs continue to have everyday responsibilities for the company’s financial help through cash-flow management, financial reporting, and overseeing regulatory compliance. The responsibilities of a CFO will largely depend on the size of their company and the industry they operate in, as well as the organisation’s funding situation.

A CFO will influence the controllership, strategy, and operations of their organisation.

Financial services CFOs in the City of London are increasingly investing in technology to analyse real-time data. There are two types of applications that CFOs are investing in as part of the everyday running of their department, including financial management and FP&A software.

1. Financial Management Software

Organisations are utilising cloud-based financial management systems that have a fully integrated application suite that combines risk management, compliance, core accounting, and project portfolio management within one system. These applications offer built-in reporting, digital assistants, and machine learning to streamline labour-intensive tasks and pave the way for automation.

Investing in financial management software will free up a CFO’s time to focus on their role as the CEO’s chief advisor and their strategic responsibilities.

2. Financial Planning and Analysis Suite

Investing in an FP&A suite provides financial services CFOs with management insights that allow for better decision-making with scenario modelling, budgeting, and forecasting.

FP&A systems play a role in managing the company’s financial and strategic planning, whereas financial management systems focus on day-to-day transactions.

A digitally savvy financial services CFO will invest in digital transformation to drive automation and relieve their workload. Investing in FP&A and financial management software will give the CFO an instant overview of the company’s financial health through the current ratio, debt-to-equity ratio, and quick ratio.

It also allows for the CFO to create dynamic financing models and forecasting for scenario planning, including determining the most profitable products. This cloud-based software can prevent unauthorised user access through the separation of duties and ensure the company meets regulatory compliance.

Investing in software enables CFOs to close their company’s technology gap and leverage real-time analytics and data to make the right strategic decisions.

The role of CFO is rapidly evolving. While the role and responsibilities will vary depending on the industry and company, a CFO needs more than just their skill set and experience to succeed at their job. Three factors that will determine the success of financial services CFOs.

1. Data

Data ensures that CFOs are making better decisions. As the role evolves and data becomes more complex, successful CFOs need to have access to real-time data to ensure they’re making decisions as efficiently as possible. CFOs must leverage financial, external, and operational data.

Modern financial systems utilise predictive analytics, AI, and machine learning to automate analysis that delivers insights to enable CFOs to act quicker. This data can allow CFOs to spot trends across customer sentiments and accurately forecast financial performance and demand.

2. People

Financial services CFOs need to have a winning team around them who are financially savvy. It means being able to nurture the next generation of talent, particularly Gen Z who are familiar with automation and AI.

Young professionals who are digital natives spend more time focusing on financial planning and analysis by utilising automation and software to oversee traditional accounting tasks. Having the right people and software in place will automate labour-intensive tasks.

Investing in cloud-based applications and software will enable a CFO and their financial department to work from anywhere. More candidates are expecting to see the option of remote and flexible working as part of a competitive job offer. This software will allow employees to securely work from anywhere.

3. Reporting

Reporting is crucial to enabling financial services CFOs to remain on track with their long-term strategies. Regular reporting provides confidence for the Board of Directors and investors with real-time business insights.

Most cloud-based financial management systems will utilise prebuilt analytics that is powered by machine learning to identify factors that can enable a CFO to control business costs and drive up profitability.

A financial services CFO can customise the dashboards and ready-to-use metrics to suit their reporting style to offer an in-depth view of the company’s financial health and position. Having access to real-time data through financial management software and forecasting gives CFOs the ability to react to unexpected market shifts, economic uncertainty, and changing consumer behaviour. It also enables CFOs to consider the value of mergers and acquisitions, along with new business models.