Agility, digital and ESG are key to banks’ success, said professional services firm Accenture in a new report, adding that banking chief financial officers (CFOs) can leverage each to guide the business forward.

Banks today face a mixed bag of challenges, but they are using these circumstances to up their digital game, finding new opportunities for customers to interact with them, according to the report titled “Breakout speed: How banking CFOs are building the new future”.

The report finds CFOs playing a lead role in driving transformation:

•    49% of banking CFOs say identifying and unlocking value, such as through developing new business models, has been a major focus for the last two years.

•    48% are prioritizing product and service development—more than their peers in other industries.

Accenture’s global ‘CFO Now’ study finds best-in-class CFOs across all industries—including banking—are equipped to provide real top- and bottom-line growth. Our banking report shows banking CFOs are also working to expand the bank’s reach, taking a closer look at environmental, social and governance (ESG) and sustainability reporting, digitalizing within the function, and shifting to remote and more agile forms of working.

Bank CFOs are poised to support ESG standardization

As banks work to help investors manage risks associated with sustainability, they are increasingly focused on ESG concerns. A standardized, global approach to ESG reporting would support efforts to navigate the various concerns. It falls to the CFO to help capture, validate and report large amounts of unstructured and variegated data, and lead the charge toward standardization.

A standardized ESG approach could boost business model profitability. CFOs are naturally positioned to drive a business’s ESG agenda focused around risk, regulation and returns, and already are taking steps in this direction: 72% of banking CFOs say the finance function is ultimately responsible for ESG in their enterprise.

The study suggests CFOs could do more to maximize digital technology’s potential, particularly in some critical areas:

•    With cloud comes enhanced scalability. But 38 percent of CFOs say they tap cloud mainly for cost efficiencies, while only 26 percent prioritize growth and 20 percent new insights from their use of cloud.
•    Advanced analytics presents another underused opportunity for banking CFOs. Only 34 percent of banking CFOs are tapping advanced analytics to achieve new growth. They are less likely than their cross-sector counterparts to consider predictive modelling.
•    Banking CFOs have made clear progress around automation. One in three say improved operational efficiency, thanks to intelligent automation, is a key outcome of their current work. Our report suggests analytics and machine learning will be increasingly essential.
•    Cryptocurrencies get a lot of publicity. Banking CFOs may wish to consider, and prepare for, their potential to drive disruption. Today, 72 percent—higher than the cross-industry average of 63 percent—say their business systems are unprepared for a shift to cryptocurrencies.

Fostering an agile, ever-ready workforce

One of the more dramatic effects of the pandemic has been the sudden change in working environments. Here, too, banking CFOs are well-positioned to make a difference, the report said.

Workforce agility: A solid majority (77 percent) of banking CFOs say their function will champion a new way of operating across the enterprise.

Hybrid models: Workers have been thrust into remote work—but now may not want to return. For CFOs, a hybrid model may be the answer.

While banking CFOs want to prioritize an agile workplace, only 19% are actively engaged in enabling new ways of working.

Today’s banking CFOs wear three hats

Accenture’s global research finds CFOs building on three key business roles. They continue to hold their traditional role of economic guardian, but this is increasingly combined with their new roles as architects of business value and catalysts of a firm’s digital strategy.

The banking research emphasizes three steps banking CFOs should prioritize:

•    Take a predictive stance toward ESG: How can banking CFOs prepare their enterprises for the sustainability challenges on the horizon?
•    Automate to enhance compliance: Can CFOs ensure technology is driving better, more efficient compliance?
•    Embed new skills for breakthrough speed: Are banking CFOs enabling data-driven decision making, strengthening collaboration and building new skill sets—all essential to delivering breakthrough speed?

If they can reply with a ‘yes’ to these questions, banking CFOs are likely already helping their enterprises transform the business model and identify new sources of value. In this way, they can help their bank outmanoeuvre tomorrow’s uncertainty today.

"Among all C-suite executives, the CFO is the logical choice to drive the agenda across risk, regulation and returns. This means implementing measurement, analytics and reporting capabilities focused on the impact of ESG-related topics,” said Chris Johnston, Managing Director, Strategy, Accenture. - TradeArabia News Service