Technological revolution is fundamental for both the survival and growth of any organisation anywhere in the world today.
Automation, technological learning, and artificial intelligence is becoming fundamental to the day-to-day operations of running a business.
But not only has technology evolved, so has the role of the Chief Financial Officer (CFO) whose remit is now far more encompassing than just overseeing the financial management of a company to one where they have become a strategic advisor the CEO.
This strategic role brings on many new challenges, none more important than constant regulatory changes required to succeed in this position.
Getting the right digital platform
The survey revealed that regulatory compliance and risk management have become two of the biggest ‘non-traditional’ aspects of the CFO’s changing role, highlighting the weight of these pressures on all strategic plans.
CFOs also highlighted that the need for digital platforms were a priority with the need to include enterprise mobility, ERP and RPA, while more advanced technologies such as blockchain and AI were not.
Keeping pace in the regulatory race
The key question is how do businesses adapt quickly and effectively to regulatory change? Well, this is of major concern to CFOs with 38% saying it is of critical importance.
Overhauling existing practices and processes has been the main focus of CFOs with 93% focusing on this challenge with 55% agreeing this is an immediate priority.
It is no surprise that more than one-third of CFOs intend to deploy new technology in the next few months, suggesting there’s a window of opportunity for CFOs to engage with more sophisticated platforms.
The main focus for CFOs when it comes to technology is invoice and expense management (88%); managing client data (59%); and monitoring workflow/productivity (54%).
Only 37% are automating their organisation’s compliance and reporting process; and a meagre 15% making use of technology to monitor regulatory and compliance changes.
It is time for CFOs to start acting. It is imperative for any business to stay ahead of the game by being actively involved in not only the planning but implementation of technology which will benefit the business going forward.
Sophisticated systems can be a highly effective way of solving operational challenges, improving internal and external financial controls, automating manual tasks, and speeding up decision making.
Key regulatory changes
IFRS 9: (International Financial Reporting Standard) 9 specifies how an entity should classify and measure financial assets, financial liabilities and some contacts to buy or sell non-financial items. This came into effect on January 1, 2018.
CbCR: 18 countries in Asia Pacific committed to (Country by Country Reporting) by July 2018. This required quantitative information for each tax jurisdiction in which multinational companies operate.
GST: 26 countries in Asia and seven in the Pacific implement a goods and services tax.
CRS: Common Reporting Standard, which is the agreed global standard for AEOI designed to detect and deter tax evasion using offshore bank accounts, is now taking more hold in the region.
Basel III: These set of measures were published in response to the financial crisis of 2007-09. They aim to strengthen the regulation, supervision and risk management of banks.
What technology are CFOs looking for?
Data analytics and visualisation are the two key areas where CFOs are looking for technology changes that will most impact their role.
They believe that those two areas will help them focus on more strategic tasks outside the mandate of a traditional CFO, while 68% believe it would improve workflow and productivity.
Enterprise Resource Planning (ERP) is also viewed as important almost 40% of CFOs wanting platforms that can mediate improvements to the integrated management of core business processes.
Interestingly, only 15% of CFOs said their organisations regularly turn to technology to deal with changing regulatory requirements.
Risk and compliance technology and tax and trade automation only came in at 22% and 17% respectively when CFOs were asked about potential impact technology in these two fields would have on their role. Perhaps they haven’t seen what is out there?
Overall, 68% of CFOs said technology is primarily used in their businesses when trying to stay ahead of the competition, followed by respond to client needs (61%). Employing technology can make this process more responsive is critical to future success.
What’s next on the horizon?
The perfect storm of disruption is coming for CFOs. When you combine technological development, changing workforce needs and locations, combined with enhanced regulatory measures both within countries and across the globe, technology is going to be the key for companies to stay ahead.
Data is increasing rapidly with a need for both internal and external measures to keep up to ensure accuracy, real-time decision making, controls and expediency can all be adhered to.
Technology is needed for both data analytics combined with routine tasks being automated to increase productivity.
There are so many benefits to having advanced technology that enables employees to communicate more effectively but helps clients make more informed decisions too, while also staying ahead of any forthcoming regulatory changes.
The time is now for change to be embraced.
Asia & Emerging Markets
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