How COVID-19 influences the CFOs’ role and speeds up its transformation

While the Finance transformation journey started some time ago, the current health crisis brings CFOs to re-assess their key priorities.

At EY Financial Services, we surveyed CFOs from important financial institutions in Belgium to find out where they are in their transformation agenda.

Why COVID-19 is an opportunity for the Finance transformation

Considering the uncertain and moving context, CFOs have changed the short-term priorities on their agenda to cope with the urgency of the situation and deliver on the organization’s needs.

• In the context of the current health crisis, where management and business more frequently need real-time information on their performance, one of the short-term priorities for the Finance function is to contribute to more agile business planning, forecasting and analysis. The quickly developed scenario-based business projection tools and capabilities now need to be stabilized and professionalized.
  
  
• In the next 12 months, CFOs will focus on business growth. Indeed, this ranks as the number 1 priority for 1 out of 2 respondents. This confirms CFOs play an increasingly important role in developing and delivering on the organization’s growth agenda.
  
  
• As income and impairment metrics are moving adversely, cost is the main lever that CFOs can pull. The current context might have made cost containment even more of a priority than pre-COVID19: cost reduction is the second top priority on CFOs’ short- and long-term horizon. At the same time, 1 out of 3 respondents mention cost constraints in the top 3 inhibitors to achieving their priorities.

• From a people point of view, scarcity is a challenge, as well as the fact that there must be an evolution of Finance people’s skillset in order to be able to respond to the changing role of the Finance function. Predictive and prescriptive analytics will be key to be able to deliver agile business planning, dynamic forward-looking analysis and real-time insights in response to stakeholders needs. The current uncertain context, and changes ahead, make that agility will be required from Finance people. Therefore, change management as well as resilience and openness to change are considered key skills for Finance people going forward. Recent events have also highlighted the importance of additional skills such as team leadership, IT curiosity and ethical decision making. As Finance continues to transform and challenge old norms in a post-COVID-19 environment, these skills will continue to become of growing importance. 

Conclusion

The COVID-19 crisis has been the opportunity for the Finance department to take on a more visible role, providing financial and non-financial information to the management in an agile way.

During the last months, day-to-day activities have been focused on responding to the requirements of the regulators, the management and the business. Going forward, the Finance function will need to further develop its agility to better and faster meet the different stakeholders’ needs. This requires that CFOs adapt their organization, acquire new skills, optimize technology, …

The CFO position has always been an exciting one. Now more than ever, with the multiplying challenges and opportunities, CFOs have a transformed and transformative role to play. They have learned lessons from the COVID-19 crisis and are capitalizing on them to make their institutions stronger. They have a hand in writing the future of financial services. A crucial one.