5 minute read 23 Mar 2021
Digital solutions in finance

Digital transformation in finance – Insights from EY survey

Authors
Sandip Khetan

EY India Financial Accounting Advisory Services Leader

Keynote speaker. Seasoned accountant. Experienced GAAP consultant.

Jalpa Sonchhatra

EY India, Financial Accounting Advisory Services (FAAS), Partner

Trusted advisor | Digital finance consultant | Strategist | Financial reporting expert | Diversity and inclusion (D&I) enthusiast | Coach | Reader

5 minute read 23 Mar 2021

EY Digital survey reveals that finance leaders are focussing on transforming their functions and have started their journeys towards Finance 4.0. Technology and digital transformation are at the core of this futuristic design of finance.

Digital transformation (DT) in finance is a concept which has now become part of a successful business strategy rather than just technology. Digital transformation has made a positive impact on business operations. It has led to opportunities of faster, cost-effective operations, meeting regulatory deadlines, improved employee and customer experience and remaining competitive. Consequently, it has now become a business strategy as opposed to a technology strategy. 

While 92% finance leaders across 89 corporates have started their journey to introduce digital interventions in the finance function, only 11% believe they are at an advanced stage according to EY Report Digital disruption in finance” - insights from survey conducted by global professional services organization, EY. 

Digital Transformation in finance is now a realistic goal due to the widespread availability of business data; teams’ ability to process large sets of data using now-accessible algorithms and analytic methods; and improvements in connectivity tools and platforms, such as sensors and cloud computing.

The finance function being the gatekeepers of critical data are required to generate forecasts and support strategic plans and decisions—among them, data relating to sales, order fulfilment, supply chains, customer demand, regulatory requirement and business performance as well as managing real-time statistics.

The survey insights revealed that while 56% participants demonstrate confidence on completeness and accuracy of data generated by finance function, only 22% are able to achieve this without significant manual intervention and only 33% are able to do this on a timely basis. It means finance teams undertake a lot of manual effort to compensate sub-par automation and generate timely information with reasonable completeness and accuracy. In times when emerging technologies can play a significant role in reducing manual mundane tasks, companies should be thinking about relieving finance teams from the deadline pressures through the optimal intervention of technology.

Across industries and sectors, technologies such as advanced data analytics, robotics, blockchain and Artificial Intelligence (AI) are creating new opportunities and driving finance transformation. Organizations need to be bold and innovative while thinking about leveraging technology for finance. When organizations trust their finance data and are able to generate multi-faceted KPIs including non-financial data, they have the potential to transform their operations and unlock value more widely.
Sandip K. Khetan
EY India Financial Accounting Advisory Services Leader
Annual currency borrowing for top 10 NBFCs

The survey results show that 83% respondents suggested that day-to-day transaction processing, monthly management reporting or financial statement closing process are among their 3 topmost priorities to automate and optimise.

Notional exposure of top 10 NBFCs

78% respondents wish to prioritize the enhancement of existing capabilities of their ERPs, Data Analytics using visualization tools and Robotic Process Automation as deployment of emerging technologies.

Notional exposure of top 10 NBFCs

A right implementation partner would mean swift implementation of the solution and effortless change management to help the teams to cope with digital change. While 72% respondents have well acknowledged the challenge for successful finance transformation is  to select the right implementation partner, 49% respondents suggested that understanding of their business and finance processes is the topmost credential they look for while evaluating a digital transformation partner.

Notional exposure of top 10 NBFCs

Despite 71% respondents acknowledging that in-house talent is capable to lead and manage transformation projects, 72% respondents suggest they are yet to invest more time and effort to develop L&D plan and execute the same to upskill their people to be ready for increased digitalization and emerging technologies.

Automation in the finance function would lead to new role profiles for the future which will be open for the present finance team to grab by acquiring new techno-accountant skills. Companies need to have frameworks to define current and future roles to identify skill and competency gaps. Companies’ involving their employees in this process and giving them enough opportunities to make themselves ready for the future will struggle less with change management for adoption of new technologies by its employees.
Jalpa Sonchhatra
EY India, Financial Accounting Advisory Services (FAAS), Partner

Summary

With time, the conventional finance function profile has evolved significantly from merely a compliance role to a larger and more strategic role in building the organization growth story for the future. The emerging role of finance is an outcome of its strategic placement in an organization.

About this article

Authors
Sandip Khetan

EY India Financial Accounting Advisory Services Leader

Keynote speaker. Seasoned accountant. Experienced GAAP consultant.

Jalpa Sonchhatra

EY India, Financial Accounting Advisory Services (FAAS), Partner

Trusted advisor | Digital finance consultant | Strategist | Financial reporting expert | Diversity and inclusion (D&I) enthusiast | Coach | Reader