- 77% of global finance leaders (Singapore 78%) surveyed say it is likely or very likely that more than half of current tasks could be automated over the next three years
- 77% of global finance leaders (Singapore 88%) think it is likely or very likely that blockchain-based systems will underpin finance
- 63% (global and Singapore) have concerns about the risks of using artificial intelligence in finance and reporting
Disruption caused by the COVID-19 pandemic and the resulting geopolitical and macroeconomic uncertainties are providing an opportunity for leading finance executives to rethink the role of their function and how corporate reporting can be structured and delivered. This is according to the sixth annual EY Financial Accounting Advisory Services (FAAS) survey, How can corporate reporting connect your business to its true value?
The survey of more than 1,000 CFOs and financial controllers across 26 countries (including 40 in Singapore) shows that finance leaders anticipate their function to look very different in the future, with a major shift to a smarter operating model. Seventy-seven percent of global respondents (Singapore 78%) think it is likely or very likely that more than half of the finance and reporting tasks currently performed by people will be executed by artificial intelligence (AI) over the next three years. Similarly, 77% of the surveyed (Singapore 88%) think it is likely or very likely that blockchain-based systems will underpin finance.
To make the most of smart technologies in corporate reporting, however, respondents identify building trust as a key prerequisite. As such, more than two-thirds (global 68%, Singapore 78%) of responding finance leaders say that governance, controls and ethical frameworks still need to be developed and refined for AI.
Without those frameworks, finance leaders (global and Singapore 63%) are concerned about the risk implications of using AI in finance and reporting, from security threats to regulatory risk. At the same time, many respondents do not have complete trust in the output of these systems, with close to half (global 47%, Singapore 45%) saying that the quality of the finance data produced by AI cannot be trusted in the same way as data from traditional finance systems.
Ronald Wong, Singapore Financial Accounting Advisory Services Leader and Partner, Ernst & Young LLP says:
“The COVID-19 pandemic has accelerated digital transformation in many organizations. New solutions to drive agility in finance processes have also emerged. While some organizations enjoyed success in smaller-scale digital adoption in response to initial disruptions from the pandemic, the challenge is for finance leaders to map out a robust technology ecosystem as they concurrently transform finance processes and upskill their workforce to fully leverage the smart technologies and achieve sustainable long-term change.
Putting finance at the heart of sustainable long-term value reporting
As investors and other stakeholders are looking to organizations to adopt a longer-term perspective and focus on long-term value creation, the survey shows that the majority of responding CFOs and financial controllers (global 72%, Singapore 85%) are embracing this shift. More than two-thirds (global 69%, Singapore 68%) of respondents say that CFOs and senior finance leaders are increasingly seen by key stakeholders as the stewards of long-term value in their organization.
Two-thirds (global 66%, Singapore 70%) of finance leaders also say that demand for forward-looking financial analyses and forecasts has increased over the last 12-months. Respondents to the survey report that stakeholders are also looking for new insights on nonfinancial factors of corporate reporting, such as environmental, social and governance (ESG) data (global and Singapore 55%).This increasing focus on high-quality nonfinancial information is reinforced by close to two-thirds (global 65%, Singapore 63%) of respondents, who believe there is significant value for their organization that is not measured or communicated using traditional financial KPIs, such as brand value and human capital.
Wong says: “Finance leaders should rethink the role that reporting is expected to play in helping to tell the story of the value that the enterprise creates. If finance fails to play a central role in meeting these changing expectations, reporting could become increasingly irrelevant. There is an opportunity for finance leaders to establish their functions as a source that can provide what is expected by the business, with the speed and flexibility required.”
The full report can be viewed here: ey.com/TransformingReporting
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About the survey
How can corporate reporting connect your business to its true value? Surveyed more than 1,000 CFOs and financial controllers of large organizations to understand the challenges they face in corporate reporting. The research was conducted by Longitude on behalf of EY Global Financial Accounting Advisory Services (FAAS). Half the respondents (50%) were from the CFO community, with more than one-third (35%) of respondents representing financial controllers. The remaining 15% of respondents were finance directors or leaders in the treasury function. A majority (62%) of respondents’ organizations have revenues in excess of US$5b a year, and 10% in excess of US$20b a year. Respondents were split across the Americas; Asia-Pacific; and Europe, the Middle East, India and Africa (EMEIA). Thirteen main sectors were represented, with 56% of respondents’ companies being publicly held or listed and 44% privately owned. The survey was supplemented by in-depth interviews with CFOs and heads of reporting organizations, as well as EY subject-matter professionals.
