In the third interview of our Digital Transformation of Finance series, we spoke to Excella M.G.A. Managing Director, Patrick Carr about the changes taking place in the finance function, barriers to the digitisation and much more.
1. How is the role of the CFO evolving?
It is steadily moving away from one of reporting to one of protecting the interests of stakeholders and investment management. New technologies have made their role more efficient but new risks in relation to outsourcing and talent oversight for example have diversified the CFO role. Increasingly seeing CFO’s being groomed for CEO roles.
2. Finance has traditionally been viewed as a back-end function in the past. Do you see it having more of a strategic role in the organisation going forward, with more input into areas like product development?
It has to have a strategic role as we would expect at a macro level that the CFO to have a strong focus on the economic upside of a new product, especially in the early critical stages of product development. We see the CFO working in tandem with the business development function in that regard. At a micro level, the CFO would have a hands-on role in making sure all the chains in the product development and distribution make sense economically.
3. When it comes to digital transformation, do you feel that the finance function is slower to adapt compared to other business departments?
To be frank it appears to us that the modern CFOs are not giving enough time and consideration to digital trends or digitalization. They tend to let the relevant IT departments take the lead rather than force the issue. Personally, I’ve seen blue-chip companies with very competent CFOs fall into this trap and it is having a huge impact on their company in the marketplace. More agile and nimble technological-driven players come into play as they can react quicker.
4. What do you see as the typical barriers to digital transformation in the finance function?
One of the key barriers is quite simple which is communication or lack thereof. If good communication exists in the company then the process for digital transformation is easier from initial problem identification to obtaining data right the way through to action planning and implementation – each of those is barrier in its own right but communication is the key to digitalization is our opine.
5. There have been many changes in finance in recent years. What do you consider to have been the biggest catalyst for transformation in the Finance function?
The ability to readily access information through digitalization for us has been a watershed moment in the finance function. No longer is the finance function having to wait for month-end; information can readily be accessed in real-time.
6. What impact, if any, do you think AI will have on the finance function?
Well, for one it allows for informed decisions and steers operating and investment budgets with more accuracy. Deep dive analysis and drilling down into micro components can be done at the click of a button. It will enable alignment between budgets and products/services more efficiently.
7. What technologies do you think will offer the biggest opportunity to the accounts payable/receivable functions?
The software which reduced the manual A/R processes and can link with other platforms will be leading the race i.e. those which automate email management, document management and phone call management. It has to be an end-to-end solution but one that can bolt onto other platforms. Here as previously mentioned, communication is key – between functions and technology.
8. As businesses are going global, how do you think technology could help to foster better relations between organisations and their international suppliers?
Definitely, fewer invoice disputes and trust is built better and quicker. It allows for improved cash flow management which reduces timescales, enriched customer service, improved communications with end-users and reduces admin costs in the chain. All of the above improve relations between companies and their suppliers.
9. According to the banking association UK Finance, a total of £207.8m was lost to bank transfer fraud alone in the UK in the first half of 2020. What role will technology play in the battle against financial fraud?
There are now quite a significant number of technology companies in the compliance space providing risk management activities to mitigate against potential financial fraud. Specifically, the ‘KYC’ know your customer and more broadly the conduct risk element becomes very important – one will never be able to get this completely bulletproof but the technological tools are there for finance and compliance managers to try and avoid or limit the risk of any potentially fraudulent activity.
View previous interviews in the CFOpinion series:
CFOpinion explores the thoughts of CFOs and finance leaders on the topic of digital transformation of finance. Each week a CFO will offer their thoughts on matters like security, the role of AI in finance and how the finance function compares to other departments when it comes to digital transformation.
Fexco International Payments provides automated solutions for international payments and receivables. We remove the friction in cross-border payments, giving your businesses more time to concentrate on strategy and success. You can talk to us on 0800 840 2887 or email us at email@example.com