Banking CFOs at the Heart of Digital Transformation

Banking CFOs are leading transformational digital change, a report reveals.

CFOs working in banks have been heralded as transformative change-makers in a report by Accenture.

Unlike many industries, banks are generally better placed to manage disruption than they were a decade or two ago. As banks further their investments in operational technology, CFOs will be required to support the business more strategically.

Banking CFOs should also be readying themselves for crypto-related disruption. Seventy-two per cent of banking CFOs admit their business systems are not ready for a shift to virtual cryptocurrencies.

Meanwhile, the pandemic has disrupted how finance operates, with the shift to remote and more agile forms of working. More than three in four (77 per cent) say the finance function, led by the CFO, will champion a new way of operating across enterprise.

Alex Trott, banking lead at Accenture Australia says the research reveals that CFOs are playing a far more transformational role within the business than they were in the past. “What’s interesting is that CFOs are no longer focused on the backward looking reporting, and are looking far more at forward prediction within the business,” Trott says.

The business remit is far more involved in the cost agenda via digitalisation, which is opening up new opportunities for digital innovation. They’re looking at how to accelerate growth and drive that forward with digital innovations and thinking about what the future of the finance function will look like, particularly given the growth in automation, which frees up a lot of capacity. There is real opportunity as more mundane tasks are automated,” Trott says. 

Banking CFOs should also be readying themselves for crypto-related disruption. Seventy-two per cent of banking CFOs admit their business systems are not ready for a shift to virtual cryptocurrencies.

The Accenture study of 1,300 senior finance leaders around the globe reveals that the role of the banking CFO is expected to expand due to greater scrutiny of ESG and sustainability reporting, a growing urgency to digitalise within the finance function, and a long term shift to remote and more agile forms of working.

CFOs also need to understand how cloud can unlock breakthrough speed and provide targeted capabilities. Accenture Strategy managing director and senior partner Chris Johnston says: “These include moving reporting activity to cloud, advising on commercial contracting, and enabling new business models to leverage the technology.” 

Leading digital change

The pace of digital change rings true for the CFO, Business Banking at Commonwealth Bank of Australia (CBA) Victoria Hickey.

Digitalisation, automation, an increased pace of change and more flexible work practices have been key to this shift. And these trends have accelerated during the pandemic, Hickey says, who has been in her role two and a half years. 

“The role and remit of the finance function continues to evolve, with many teams now recognised as strategic business partners uniquely able to advice on business performance through data and insights, with a view on how to create value across all stakeholder groups,” Hickey says.

Some of the most pleasing outcomes from the past 15 months has been the relatively seamless shift to hybrid and the ability to navigate year-end remotely. “I never thought this would have been possible two years ago!”

The change is how the finance team works in lockdowns has highlighted the importance of staying connected as a team. Weekly fun and informal catch-ups have helped maintain a strong team bond through challenging periods, she says.

“We’ve also learned more about each other’s interests outside of work, which has been a fundamental part of maintaining team engagement and morale.”

Speed has also been an important part of the job. As a result of digitising and automating processes, the team has been able to quickly put money into the hands of customers through digital lending tool BizExpress to help with cash flow during the pandemic.

“This means we’ve been able to quickly delivery support as part of the government’s Coronavirus SME Guarantee Scheme, with more than 50 per cent of all of the Government’s SME Guarantee Scheme loans funded by CBA and of this 80 per cent have been funded via BizExpress.

Customer-facing initiatives

National Australia Bank (NAB) entered into a scheme to acquire 100 per cent of digital bank 86 400. As of 15 January, 2021, 86 400 had more than 85,000 customers, $375 million of deposits and $270 million in approved residential mortgages. 

CFO of digital bank 86 400, Belinda Hogan says customer experience is crucial to understand as a CFO.

“As CFO it’s important to understand your customer onboarding, what areas of your products or services drive complaints, and what drives satisfaction. As the ease of switching for customers increases, and banks shift towards acquisition through advocacy, it’s vital to look at performance holistically.”

Secondly, CFOs have to stay ahead of the digital curve, and be more digitally savvy for their own team, she says. “It’s important to ensure your finance team is focused on implementing new technology and more efficient processes all the time.

In the 15 months Hogan has been in the role, a key initiative has been the launch of Smart Search – a feature to help Aussies search across multiple banks and accounts at once.

BREAKOUT:

The Accenture report reveals the three priorities for CFOs as being:

Taking a predictive stance toward ESG – Consider how they can modify their activity to prepare for upcoming sustainability challenges.

Automate to enhance compliance – Consider how technology can do more to lift the burden. To date, banking finance teams have automated an average of 62 per cent of compliance activity.

Embed new skills for breakthrough speed – Data-driven decision making, better collaboration and new skill sets will be needed. These capabilities will also need to be supplemented by people with skills in cryptocurrencies and quantum computing.