Is digital disruption changing the DNA of the CFO?

Will tomorrow’s finance function be led by people or technology? Felice Persico, EY’s global vice chair, assurance, examines how technology is transforming finance and the role of the CFO

Will tomorrow’s finance function be led by people or technology? This might seem like a stark choice, and one only for the distant future, but, in reality, “digital disruption” is already influencing the finance function today.

CFOs are on high alert as they are forced to reimagine their role in direct response to digital disruption, increasing volumes of data and stakeholder scrutiny, and ongoing regulatory change.

Technology, particularly robotics and artificial intelligence (AI), is looming over the finance function, threatening execution with complexity and hurdles, but also providing opportunities for transformation.

Today’s CFOs must use this moment to design the future state for the finance function and define technology’s role within it.

According to EY research that gauged the views of 769 CFOs and finance leaders across 32 countries, the findings on the evolving CFO role were clear. 47% of respondents said that their finance function does not have the right mix of capabilities to meet its future priorities. Moreover, 69% said that they see the finance leader role fundamentally changing, as traditional finance tasks are automated or managed in shared services centers.

It is no surprise that digital and disruption are common watch words for the CFO community right now. Every industry and profession is affected by technological advances, and it is clear that CFOs recognise the urgency and importance to adapt to the changing environment. However, unless decisive action is taken quickly to define a bold reporting strategy and vision for advancing the reporting process, CFOs will continue to fall behind the pace of technology.

Technology will clearly help the finance function and add value when it is adopted in the most strategic way. It is likely we will see significant growth in the take-up of robotics process automation (RPA) in the near-term as CFOs look to provide meaningful insights to boards at speed with no errors.

We recognise that traditional finance activities, such as audits, will also provide greater insight into the finance function through the use of innovative technology application.

Technology will help us dig deeper into the ever-increasing amounts of data created and will continue to help us find the hidden meanings and patterns, providing CFOs with actionable insights linked to business-critical information and risks.

Digging deep into data also allows reporting teams to extract forward-looking insight from large, fast-changing data sets, which closes the expectation gap between what boards now seek from corporate reporting and what CFOs can deliver.

Yet technology is not seen as the only solution to this rapidly changing world. The finance function of the future should not be seen as solely robot-led. Instead, the advancement of technology is about creating a blueprint for a smarter, more forward-looking and resilient finance function.

Essentially, the goal is to design a future operating model that focuses the best people on key priorities while better equipping them for the new digital world. New technologies, such as robotics and analytics, are handling more and more of our manual, repetitive tasks.

From an audit perspective, it is allowing people, particularly those in junior roles, to focus on more strategic work. Work is becoming less routine and more flexible, and our structure less hierarchical. The assurance professional of the future will need a wider range of skills and diversity of experience to succeed in this evolving role.

Ultimately, determining the right fix for the modern finance function is not something that CFOs can mull over for very long. Change from digital disruption is so rapid that contending with volatility and uncertainty will be the new normal for CFOs, and there can be no doubt that technology – and engaging the proper people to leverage the benefits of technology – will play a significant role in transforming the finance function.

CFOs now must set the course of action for their future finance function – one that establishes the right combination between talent and technology.

Felice Persico is global vice chair of assurance at Ernst and Young.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

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