4 Reshaping Trends In Finance: What Should CFOs Focus On?

Covid-19 continues to alter the way we live our lives and 2021 has shown that chief financial officers (CFO) and those in the finance industry will need to adapt rapidly to the “new normal” if they want to thrive in 2022 and keep up with the many major changes within the sector.

From workforce concerns to wrestling with climate change, the CFO will need to keep their fingers to the pulse and be aware of the key major trends that will be reshaping finance and the role of a finance leader in 2022 to ensure resiliency and adaptability.

   

Trend 1: The War For Talent Continues

 

At the start of the pandemic, the focus for CFOs was on employee safety. With the labor shortage caused by the pandemic, the focus has to be on employee retention and attracting new talent.

According to a survey done by Protiviti and North Carolina State University, the “war for talent” jumped from 8th to 2nd place in terms of global risk for 2022. As workers are becoming more selective when it comes to choosing their careers, CFOs must respond to the changing trends in talent retention and attraction by offering better compensation.

However, it’s not enough to just attract workers in general. Finance leaders need to find or develop talents with digital skills to support an always-on, technology-driven, real-time business. Based on research by EY, 57% of the surveyed finance leaders believe that building prescriptive and predictive analytics capabilities will be crucial for a company’s longevity.

 

Trend 2: Initiatives in Digitization Within The Organization

 

It should not come as a surprise that many business owners are accelerating their digital transformation due to the pandemic. With the fintech market expected to reach almost $310 bn in 2022, it is not a matter of if but when should CFOs invest and kickstart initiatives in digitalization within their organization. 

In a survey done by PwC, 68% of the CFOs surveyed planned to invest in digital transformation in 2022 while 58% are exploring other areas of digitalization such as automation to “help offset the loss of institutional knowledge when people separate from their companies.”

Growth will be driven through investment in technologies such as cloud and data analytics and the CFO needs to play a leadership role alongside the CEO and other C-suites to encourage the value story of cloud and pinpoint capital commitments that will help drive strategies for long-term growth.

   

Trend 3: Smarter Decision-making With Data Management

 

Data will continue to play a prominent role in keeping organizations competitive and allow for better decision-making processes. However, data is often isolated and siloed across different point solutions, and without automation, it will be cumbersome to collate. 

As augmented data management is expected to reduce reliance on finance analysts for repetitive and routine data management tasks by 2023, CFOs have to take charge of the wealth of data that remains untapped and focus on data accessibility to remove obstacles, allowing their organization to be more efficient in interpreting data. 

To effectively leverage data, CFOs will need to utilize data-driven intelligence technology, such as artificial intelligence (A.I.) and machine learning, to help make the best possible decision for their customers and their business.

 

Trend 4: Gaining Momentum towards Sustainability and ESG

The issues businesses face with sustainability as a whole continue to be a priority for CFOs as we enter 2022. Organizations are expected to become climate-centric companies and ‘clean’ up their books by divesting from fossil fuels and reorienting their focus towards greener development.

For CFOs, emphasizing ESG (environmental, social, and governance) strategies and identifying ESG frameworks, material issues and metrics should be the focus.

What needs to be avoided, however, is the act of “greenwashing” as stakeholders will be proactive in encouraging businesses to take meaningful action towards sustainability and ESG. Plus, with regulators set to enforce mandatory disclosures, this will push businesses to go beyond ‘Green’ PR and marketing.

Major shifts are expected for the CFO and now, due to the pandemic and technological advances, the shifts will be more impactful and significant for those in the finance industry. To become a sustainable and successful organization, finance leaders must be aware of these 4 trends as they will set the standard in the industry for many more years to come.