The future of finance

Nov 01, 2018
Whether it’s phone apps, home automation, or cashless commerce, digital disruption is the new normal for consumers today. What does this have to do with the future of finance? Everything. 

WORDS BY DANIEL GAFFNEY AND KEVIN SCAHILL

The technologies needed to reimagine finance are here and are becoming a fixed part of many finance functions, supporting finance to both achieve better efficiencies (e.g. robotics) and provide better insight into key business decisions (e.g. cognitive). We’ve  looked carefully at what finance leaders are doing and at the technology that’s available, and then we asked these questions: 
  • What would be possible if we combined different technologies to reimagine the future? 
  • How would the work of finance get done and who would do it? 
  • How could finance contribute even more to the success of the company? 
  • With these questions in mind, here’s some of what we believe might just transpire.

1. The finance factory – transactions will be touchless as automation and blockchain will reach deeper into finance operations.

Some find it interesting to speculate about finance disappearing under the crush of digital disruption, but we don’t see that happening. Yes, finance teams will likely be leaner, but that will mostly be a function of headcount in Operational Finance (order to cash, procure to pay, transactional accounting, etc.). Meanwhile, expectations for support from business finance (business partnering, reporting, planning, budgeting, forecasting, etc.) and specialised finance (tax, treasury, etc.) will continue to grow. This means that there will be a premium on talent that understands technology and business – professions that are already in short supply.

2. The role of finance – with operations largely automated, finance will double down on business insights and services. 

The skills required by finance professionals will change as new combinations of technology and human workforces permeate the workplace. Routine forecasts will be handled by algorithms that are constantly evaluated by small resource pools, including data scientists, story-tellers, and cognitive psychologists.

3. Finance cycles – finance will go real-time. 

Many finance cycles today are driven by technology and data-processing limitations. Things occur on a regular schedule because that’s the only way they can happen today. When information becomes available instantly to those who need it, traditional cycles become unnecessary. That frees people to focus on discovering new insights and acting on them.

4. Self-service will become the norm.

With growing expectations for responsiveness and quality from finance, getting self-service right is paramount. When your customers have to take care of themselves, the last thing finance needs is for them to be frustrated or unhappy. Over time, smart agents will learn what kinds of business information an individual needs and deliver that information proactively.

5. Operating models – new service-delivery models will emerge as robots and algorithms join a more diverse finance workforce.

Companies will assess the benefits of automation against onshore and offshore operations. At the same time, the need to build dynamic, cross-functional teams will strain finance organisations that aren’t preparing now for what’s ahead. 

6. Enterprise resource planning – finance applications and microservices will challenge traditional ERP. 

As cloud becomes the norm for ERP, finance applications and microservices will proliferate. You’ll be able to drastically reduce the complexity and cost of technology, without sacrificing functionality.

7. Data – Application Programming Interfaces (APIs) will drive data standardisation, but it won’t be enough. 

Data problems hide beneath the surface for many CFOs, some of whom don’t fully appreciate the heavy lifting required to fulfil their requests. Automation and cognitive will make it easier to get the work done, but it’s still going to be hard and tedious.

8. Workforce and workplace – employees will be doing new things in new ways, some of which will make CFOs uncomfortable.

Implementing new technologies is relatively easy compared to changing your talent model. They’re obviously connected, but cultural and organisational shifts related to your workforce may take much more time and care to get right. Your finance organisation should be looking at every new hire through the 2025 lens. Everyone in the team should be able to contribute to elevating the value of Finance in terms of communication, impact, and influence. 

We don’t know for certain what the future will hold – some of our predictions may prove accurate, others not so much. But we need to be thinking about what’s likely to happen and to prepare for it. The years ahead hold great promise for finance organisations that want to create more value for the companies they support. Now is the time to step back and make sure your roadmap to that future is clear. The prize? Well, CFOs know their companies will benefit if finance can more efficiently deliver better financial information in a more timely fashion.
 
Daniel Gaffney is a Partner and Kevin Scahill is a Senior Manager of Consulting in Deloitte