(Forbes) There has been a lot written over the past few months remembering the crisis and global financial volatility of 10 years ago. Without question it was a complex period and the financial services industry has learned a lot.
But is the industry now more stable and less complex? Certainly, the industry has made significant strides in many areas, but the pace of change only continues to increase. The opportunities to adopt, embed and take better advantage of digital technologies are more numerous than ever.
Every company in the industry faces serious questions about where to invest, at what pace and scale, and for what economic outcomes. In this context, the CFO plays a critical role in evaluating and making the right decisions on a multitude of options.
Our latest research on the CFO and finance function indicates that CFOs have expanded beyond their traditional roles as finance leaders and play a more influential leadership role for the whole organization. CFOs are increasingly business partners – driving value enterprise-wide – and are also serving as digital value stewards, helping to chart the path to create and capture value in a digital world.
Today’s CFOs are senior leaders who increasingly are responsible for evaluating the many potential technology investment scenarios to recommend the right mix, pace and outcome measures for an organization’s transformation.
Inside the finance function, new technologies ranging from big data and analytics to cloud, robotic processing automation and artificial intelligence have transformed the functional landscape. While tracking and reporting on the past quarter’s performance is still a required part of finance, technology enables many of the heritage finance activities to be completed more quickly and more efficiently, with less manual intervention. This in turn frees up human capacity to make better use of data and analytics to provide insights on more important and valuable aspects of the business such as enabling new revenue streams and new sources of profitable growth.
As an example, the benefits derived from correctly identifying actionable insights from finance-driven data and analytics can be enormous when applied to customer outreach.
Before contacting a potential customer with a loan offer, firms can build a comprehensive profile of that customer based on their online activity such as searches for new houses, visits to car dealership websites or queries about credit card rates. It’s worth noting that data collected to build this profile is based on the customer’s consent.
By gathering, curating, modeling and understanding a customer’s digital footprint, firms can develop “intelligent signals” and better generate highly targeted customer propositions. This helps banks focus their efforts on the right customer segments and also increases the acceptance rates, lowering both the percentage of bad loans as well as the cost of acquiring each customer.
This approach is also helping banks and other financial services firms venture outside their traditional lines of business with new business models, new product offerings and new customer experiences. Investment banks serving primarily corporate and institutional clients, for example, may now use sophisticated analytics to offer attractively-priced loans or investment products to a new segment of customers to expand their portfolio.
Other banks have used core finance expertise to develop new offerings in areas ranging from small and medium sized enterprise (SME) financing and financial management to money management apps for customers not yet in the high net worth or ultra-high net worth categories deemed desirable by large asset managers.
Digital brings every industry both new opportunities and new challenges. CFOs, in particular, are already stepping up to play a pivotal role in assessing both sides and helping to guide their organization effectively to create new value from data, unlock the required market insights to take action, and enable digital transformation across the enterprise.
