In today’s fast-paced business environment, the role of the chief financial officer (CFO) is transforming. Once focused solely on financial data, CFOs now use technology to drive strategy, improve efficiency and provide real-time insights. However, many organizations still struggle to fully integrate these innovations into their financial operations.
Baker Tilly professionals gathered industry leaders to discuss how these technological changes are evolving CFO responsibilities, covering topics like automation, artificial intelligence (AI) in finance, cybersecurity, compliance and shifting leadership demands. Below are the key takeaways and strategies shared during the session:
Q: How has technology changed the way CFOs approach financial planning and analysis?
A: Technology has streamlined financial planning for CFOs, shifting forecasting from manual processes to advanced tools that handle large data sets for faster, more accurate projections. In industries like healthcare, real-time data helps manage expenses and track claims. New software also allows budget managers to access data independently, reducing dependency on the CFO. Overall, technology has transformed the CFO role from financial management to strategic leadership, focusing on risk mitigation and driving efficiency
Q: What financial technologies have had the biggest impact on your role?
A: Technology has boosted efficiency and automation in financial processes. In insurance, automation speeds up claims processing, especially in dental, with AI handling quality checks. System integrations across acquired companies save time, turning hours of work into minutes, and allowing focus on strategic tasks. Software integrations eliminate manual data conversion, speeding up processes. Cybersecurity is now a key financial concern, requiring attention to fraud and security risks.
Q: How has real-time data access changed decision-making for CFOs?
A: Real-time data access enables CFOs to make informed, strategic decisions by combining operational and financial data. This collaboration drives efficiency and revenue, allowing analysts to focus on macro trends instead of individual data points. In industries like product and call centers, real-time feedback allows immediate adjustments to ad spend, sales trends and issues, ensuring quicker, proactive decision-making.
Q: What areas of finance have benefited most from automation, and what challenges have arisen from it?
A: Automation has improved compliance and workflow management by streamlining approvals and documentation, making it easier to track compliance without increasing headcount. In defense contracting, automation enhances contract management, invoicing and reporting. However, challenges include the loss of tribal knowledge, which automation and AI can help address, ensuring knowledge transfer to newer hires.
Q: How do you see AI shaping financial forecasting and risk management in the next five years?
A: AI will enhance financial forecasting by promoting collaboration across teams, leading to more comprehensive forecasts. However, while AI improves efficiency in risk management, it also increases the risk of data breaches, especially with sensitive information, as new connections and data sources create potential security vulnerabilities.
Q: Has technology reduced the need for traditional finance teams, or has it created new roles and skill demands?
A: Technology has shifted finance teams from transactional tasks to value-added roles like process improvement and strategy, fostering individual growth. The CFO role has evolved, with boards now expecting CFOs to oversee technology, supply chain and legal functions. The required skillset has shifted from a traditional accountant, focused on managing financial details, to a strategic leader who provides timely, relevant data to drive business decisions.
Q: With digital transformation, how have cybersecurity risks influenced CFO responsibilities?
A: CFOs must understand data flow, classification (e.g., PCI, PII) and cybersecurity risks to align with insurance coverage. Balancing security investments with costs is a constant decision. Strong internal controls and team awareness are essential. For example, a not-for-profit performing arts organization’s near miss with a large wire transfer highlights the importance of strong internal controls and clear communication, especially around payment requests.
Q: How do you ensure compliance with evolving financial regulations in an increasingly digital landscape?
A: For not-for-profits, budget constraints make compliance challenging, but relying on experts like auditors and consultants is crucial. Knowing when to handle tasks internally versus outsourcing is key, along with staying updated on regulatory changes. In other organizations, technology helps identify system deficiencies, ultimately improving compliance over time.
Q: How has the CFO’s role evolved from traditional finance oversight to a more strategic, technology-driven position?
A: The CFO role is shifting from financial tasks to a more strategic, long-term focus. CFOs are now involved in capital investments and modeling future business outcomes for growth. Data-driven decision-making helps balance financial and operational priorities. As technology advances, the role also includes strategic planning and cybersecurity, ensuring growth while managing risks.
Q: What new skills do modern CFOs need to succeed in a technology-driven financial environment?
A: Modern CFOs must be strategic leaders who balance financial management with evolving technology. Key skills include:
- Strategic thinking: Focus on long-term planning, projections and data analysis
- Understanding of technology: Grasp technical language, data flow and work closely with IT teams
- Data-driven decision-making: Understand end-to-end processes and how financial data integrates with other departments
- Adaptability: Reassess roles and adjust to evolving technologies to keep the finance team effective
Q: How do you balance the need for financial oversight with the push for digital innovation?
A: Balancing financial oversight with digital innovation involves:
- Encouraging speed and innovation: Embrace innovation, acknowledging occasional mistakes, but prioritizing progress over perfection. Historical data should inform, not limit, forecasting.
- Leveraging technology for oversight: Use digital tools to analyze data, generate exception reports and apply AI for improved financial accuracy and efficiency
- Guardrails on data use: Establish guidelines to ensure correct data usage, preventing false conclusions and ensuring reliable decision-making
