The role of the CFO is seeing increased responsibilities. They are now strategic partners, expected to navigate market uncertainty, fuel organizational growth, and provide insightful guidance across the entire business.
This expanded role requires a unique blend of skills: financial acumen, of course, but also problem solving, strategic thinking, risk management expertise, and a strong grasp of technology. In this new environment,the ability to adapt quickly and embrace innovation is paramount.
For CFOs who can rise to the challenge, the current landscape presents a wealth of opportunities. Those who can quickly bridge the gap between driving strategic growth and leveraging technology will be best positioned for success. To achieve this, CFOs need to understand where to focus their efforts while understanding which tech will best support those efforts.
In this blog post, we’ll explore the top 3 CFO trends of 2024 and beyond, and outline essential tech that is best suited to help achieve these goals.
1. Leading Digital Transformation
According to a recent survey by Gartner, a whopping 79% of CFOs stated that leading digital transformation efforts is their top area of focus in 2024 and beyond.
However, modernizing the finance department presents a significant challenge for most CFOs. Efficiently integrating new technologies can be disruptive and time-consuming. Implementing these changes often requires collaboration between finance executives, external consultants, and internal IT teams.
While these partnerships are crucial for implementation, juggling daily operations alongside rolling out new technology strains resources. As the number and complexity of these projects increase, finding sufficient resources within the finance department to adequately manage them becomes increasingly difficult.
So how can you capitalize on this trend of leading digital transformation without draining resources?
Application Programming Interface (API) for Streamlined Tech Implementation
At the core of digital transformation is technology, so it should be no surprise that the answer to this problem lies in technology – the right technology.
Through working with finance professionals from organizations of all sizes, while also partnering with the world’s leading banks, we’ve found that one key emerging technology simplifies implementation – APIs.
APIs connect finance departments with bank data, as well as external applications and services. They provide pre-built functionalities that simplify the connection process, reducing the need for extensive custom coding. This translates to faster implementation times and eliminates the need for support from external consultants and internal IT teams. By utilizing APIs, businesses can achieve smoother integration of new financial tools, lowering costs and streamlining the overall process.
2. Improving the Finance Function’s Strategy and Design
Given that CFOs are now expected to operate as a strategic partner to the CEO, it’s no surprise that improving strategy is within the top 3 areas of focus for CFOs going forward. The reason for this focus is because, for too long, CFOs have struggled with data accuracy and visibility. This hinders their ability to make informed decisions.
In fact, new research from Blackline found that nearly 40% of CFOs around the world do not completely trust the accuracy of their organization’s financial data. Furthermore, confidence in cash flow visibility also remains incredibly low, making it difficult for organizations to respond to unexpected market changes
A core reason for this issue is due to manual processes in data consolidation. Most organizations partner with multiple banks. This results in various team members having to manually log in to each bank portal to manually pull data which come in various file formats. Aggregate that data, then upload it to an ERP, treasury platform, and similar systems to generate reports and forecasts.
Oftentimes, by the time this process is complete the data is outdated. Additionally, this manual process increases the risk of data entry errors which can result in costly mistakes. Automation is the key to solving this problem.
Automated Data Aggregation for Improved Accuracy and Visibility
We previously highlighted how APIs drastically simplify implementation. Another key benefit is that they automate data aggregation. This frees up your team to spend less time on wrangling data and more time on strategic analysis.
APIs offer a modern and agile approach to bank connectivity. They provide a user-friendly interface for exchanging data seamlessly with various financial institutions.
- Real-Time Data Updates: API connections offer real-time or near real-time data updates and ensures accuracy. You and your team gain access to the latest information for immediate decision-making. No more waiting for batch processing or overnight data feeds.
- Rich Data with Detailed Transaction Metadata: API-based connections unlock a wealth of detailed transaction metadata. This comprehensive information enables better categorization, reporting, and in-depth analysis of your financial activity.
For example, Trovata’s treasury management platform leverages API connectivity to streamline treasury management. Our platform centralizes multi-bank data providing real-time visibility into cash flow. The best part? The data is automatically normalized and delivered in a standardized format.
“I gravitated to Trovata because of the APIs. I think this is just the way to go compared to SWIFT and H2H. It’s also really easy to implement. I mean, it took a week or two. The daily feed makes data readily available. Logging in provides instant updates, eliminating the need for manual data pulls. “
Bruce Edlund – Assistant Treasurer at Cloud Software Group
While APIs help to simplify tech implementation and improve data accuracy, CFOs still need additional tools to achieve the next trend on the list – improving metrics and insights.
3. Improving Finance Metrics, Insights, and Storytelling
CFOs need to be master storytellers. When faced with financial queries from the CEO and key stakeholders, they must be equipped with a clear picture of the organization’s current financial health and the outcome of potential future scenarios. Furthermore, they must be able to find accurate answers quickly and efficiently. These are all essential variables to tell an accurate story of the organization’s journey.
However, as we previously highlighted, manual data aggregation limits reporting and forecasting capabilities. In fact, according to a 2023 report from Deloitte, 62% of CFOs note immature capabilities as barriers to translating data into insights for their businesses.
Successfully improving metrics and gaining better insights demands automated reporting and forecasting backed by AI and machine learning.
AI and Machine Learning to Improve Reporting and Forecasting
A recent KPMG report suggests a significant increase in AI adoption by finance departments, with nearly 60% of C-suite leaders leveraging this technology. AI’s impact goes beyond automation; it empowers CFOs with:
- Streamlined transaction processing and reporting: Repetitive tasks like data entry, invoice processing, and reconciliations can be automated using AI, freeing up valuable staff time for more strategic analysis.
- Enhanced forecasting through machine learning: Machine learning algorithms can analyze vast amounts of historical data to identify patterns and trends, leading to more accurate forecasting and risk assessments.
- Predictive analytics for risk modeling: AI can be used to analyze financial data and identify potential risks, such as fraud or credit defaults. This allows CFOs to take proactive measures to mitigate these risks.
While AI and ML sound amazing in theory, you may be wondering how to apply them in the real world to gain measurable impact?
Trovata empowers you to transform cash flow by leveraging AI and ML to seamlessly organize your data, automate cash reporting and forecasting, and create efficiencies for your team.
Automated Transaction Tagging: Say goodbye to manual data categorization in spreadsheets. Trovata leverages AI to automatically tag transactions, saving you time and ensuring consistency in classifying your financial activity. Your team will no longer spend hours sorting through spreadsheets – the system does all of the heavy lifting.
Data-Driven Reporting with AI/ML: Trovata leverages these technologies to generate insightful reports and automate repetitive tasks. Our real-time API bank connectivity, combined with the power of AI, automatically updates cash reports as your daily balances update. This means simply logging into the platform provides you with instant updates.
Automated Cash Forecasting: Historical data is automatically analyzed to create a baseline for more accurate cash forecasting. This frees your team up from manual processes and empowers them to focus on gleaning strategic insights to drive decision making.
Cash flow optimization is just one example of how AI and ML can be implemented to help you gain deeper insights and tell stories that matter. AI and ML are being used across a number of different areas within finance functions to improve data insights and streamline reporting. ERPs, investment solutions, payment platforms, and more are leveraging AI to help finance teams become more strategic players in their organizations.
Mastering CFO Trends in 2024 and Beyond: How to Get Started
The first step to leveraging these trends to fuel success is evaluating your current operations. Identify manual workflows across your team, audit your existing tech stack, and identify where you should invest in new technology.
From there, you’ll need to evaluate which platforms are best suited for your needs and can be implemented without draining your budget and resources.
Trovata: The Ideal Solution to Improve Cash Flow
If you’re in need of a solution to improve cash visibility and optimize cash flow, we’ve got you covered. Trovata offers the best in what modern treasury tech solutions have to offer.
You’ll gain 100% accurate banking data in real-time with the ability to automatically categorize and report this data in any way imaginable.
Enhanced cash visibility, sophisticated tagging and categorization features, is combined with AI integrations, a natural language search function, detailed forecasting and scenario planning tools, and even the ability to send payments and invest cash directly on the platform. Not only that, but Trovata can be implemented in a matter of weeks, not months.
If you’d like to learn more about how Trovata can help you optimize cash flow, book a demo today!
