The role of the Chief Financial Officer (CFO) is evolving rapidly, driven by recent advances in financial technology (FinTech).
This Fintech revolution is spawning myriad digital tools which have the capacity to significantly improve the efficiency and accuracy of the back office, facilitating simplification and automation of what have hitherto been onerous, complex, manual processes.
Fintech is proving to be the catalyst for transformative change within the finance function; driving down costs, generating actionable insight and creating value. These tools are increasingly elevating the status of the CFO, positioning them as the business’s forward-looking strategic leader and forecaster, at the front and centre of the boardroom.
Cloud technology has empowered CFOs to work anywhere, any time, on any device. With access to richer and more granular datasets, CFOs can now complete tasks more quickly and efficiently than ever before, saving time and money. Software from providers such as Sage now provide CFOs with an accounting solution which links into to payments, payroll and operations functionality, not only streamlining processes but also providing them with a more holistic understanding of the business.
Quicker and easier business loans and invoice financing
Poor cashflow is cited as the reason for 90% of business failures. Fintech solutions are increasingly facilitating not only more accurate financial and cash flow forecasting tools, but also easier, quicker, access to financing. Platforms such as MarketFinance and Funding Circle for example, now provide CFOs with streamlined online access to business finance solutions, with applications taking just minutes and decisioning provided in hours rather than days.
Simplifying expense management
These new Fintech app-based solutions allow CFOs to monitor and categorize all purchases to better track and manage spending. Moreover, they integrate with cloud accounting solutions such as Sage to provide joined-up solutions.
Propositions like Pleo enable CFOs to issue smart debit cards with payment limits to staff in just a few clicks, with employees then logging receipts digitally (using their smart phone cameras) to automate the expense management process and deliver significant cost and time savings for the business.
Enterprise Resource Planning
Enterprise Resource Planning (ERP) platforms have become a multi-million-pound area of expansion in the Fintech sector. They provide CFOs with seamless integration of CRM, accounting, HR, Inventory, Order and Supply Chain Management systems to facilitate not only a single holistic view of the company’s key metrics, but also a rich, granular data set which can be mined for actionable strategic insights.
Optimising corporate cash deposits
In the face of geopolitical and economic uncertainty, businesses have turned to tangible contingent cash reserves. Bank of England and UK Finance data shows UK small and medium-sized enterprises (SMEs) have increased their cash balances by 77 per cent between 2011 and 2019, from £191 billion to £339 billion. This makes the oversight and management of cash reserves an imperative for many businesses, with optimisation of the asset a priority on the CFO’s agenda and its digitalisation a necessity.
Utilising a cash platform such as Flagstone enables CFOs to improve visibility of prevailing rate opportunities, oversight of the company’s deposit portfolio and provides them with the ability to switch accounts simply and easily, freeing up time that would otherwise be spent researching, opening and managing accounts. The platform also provides users with consolidated statements and an annual interest summary for tax reporting.
Fintech – Helping CFOs to deliver more value
According to Deloitte’s ‘The Future of Operational Finance’, the CFO now has four hats to wear; ‘steward’, ‘operator’, ‘strategist’ and ‘catalyst’.
As shown above, Fintech is increasingly enabling CFOs them to wear all four simultaneously to deliver ever greater accuracy, efficiency, insight and value for their companies.