Survey Insights | Oct 4, 2023

Image: Unsplash/Ch pski

In the face of economic and technological shifts, CFOs and finance leaders are recalibrating their strategies, balancing the imperative of cost control with the potential of technological advancements.

Insights from two pivotal surveys, one conducted by U.S. Bank and the other by Stripe, provide a comprehensive view of the current and future landscape of finance departments globally. Below are some key insights from the amalgamated findings:

1. Prioritization of Cost Control

• The U.S. Bank survey indicates a significant shift towards cost control within finance departments, with 38% of CFOs prioritizing internal finance-function cost control, even surpassing the emphasis on maintaining costs across the entire business.
  • Driving revenue growth was the fifth-highest priority (23%), up slightly from 2022 but down from the second-highest priority (35%) in 2021.
  • 56% of finance leaders currently struggle to balance cost cutting and building resiliency with investment in future growth, up from 46% in 2021.
• This insight points towards a defensive and conservative approach adopted by finance leaders, potentially driven by prevailing economic conditions, such as the end of the low-cost capital era and persistent inflation in some sectors.

2. Tech Integration and Automation

• The Stripe survey reveals a strong inclination among finance leaders towards technological advancements, with nearly 40% listing “digital technologies to automate financial operations” as one of the top initiatives they are most excited about in 2023.
• Despite the current manual handling of a significant portion of back-office operations, there is a palpable excitement about employing technologies and innovations to streamline processes and enhance efficiency, albeit with a balanced approach that does not completely eliminate human intervention.

3.  Increased Appetite for Digital Payments

• 68% of respondents intend to use instant payments (i.e. FedNow Service) two years from now. The survey found that 42% currently use real-time payments, up from 38% in 2022.

4. Data Consolidation and Management Challenges

• The Stripe survey highlights that 63% of finance teams use more than 10 different systems to access crucial business metrics, and 55% of finance leaders aim to consolidate software programs within the next one to two years, primarily to centralize data.
• This insight underscores the challenges faced by finance departments in managing data across multiple systems and the strategic importance of data centralization in facilitating faster, more accurate decision-making and driving business growth.

Walking A Tight Rope

These insights collectively underscore the evolving landscape of financial management, where CFOs and finance leaders are navigating through the complexities of economic challenges while also aspiring to harness the potential of technological advancements to streamline operations, enhance efficiency, and facilitate strategic, data-driven decision-making.

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