Member Insights by Paula O’Reilly, Accenture
When people think of bank CFOs, they might be thinking of left-brained numbers gurus who are laser-focused on core finance activities. But today’s CFOs, in banks and across industries, are doing so much more. Many CFOs are increasingly becoming architects of business value. As strategic partners to the business, they aren’t just managing financial operations—they’re driving growth.
The data from a recent Accenture survey, How Banking CFOs are building the new futuretells a compelling story about what’s happening in banks.1 A full 77% of banking CFOs say that senior leaders’ expectations of the finance function are fundamentally changing. And about half (49%) of banking CFOs reveal that identifying and unlocking value has been a key focus for them in the past two years.2 Would the data have told the same story a decade ago, even five years ago? I don’t think so.
Calling all finance heroes
While the evolution of the CFO has been faster in big banks, it shows the art of the possible for those in middle market banks. By taking a page from the big bank playbook, middle market CFOs can become what I think of as transformation heroes—not just within Finance, but across the enterprise. I see three ways for CFOs to ramp up their influence. To fully embrace this expanded role, some will likely need to push outside of their comfort zones to areas where they haven’t necessarily engaged before. But the reward far outweighs the risk:
1. The CFO as cloud champion
Middle market banks recognize cloud as a critical enabler of both their business and technology strategies. And this is absolutely true. Despite all the buzz around cloud, most middle market banks have yet to realize its full potential. CFOs must bear some responsibility for this. Across banking, a good portion (38%) still view cloud primarily as a cost-efficiency play. Only 20% of banking CFOs are likely to use technology to provide new insight—and just 26% are likely to do so to support growth.3
This, in my view, is a missed opportunity. CFOs have always been (and will always be) champions of cost plays. This discipline is fundamental to their role, no matter how it evolves. But I think those who understand cloud as both a cost play and a revenue driver are the real transformation heroes. With an enterprise-wide view, CFOs are in the best position to work across business and technology to determine how to reinvest savings from cloud solutions to grow revenue. That’s the work of a true finance hero.
2. The CFO as analytics advocate
Across banking, strategic CFOs are starting to channel their stereotypical love of numbers into a love of advanced analytics. About one-third (34%) of banking CFOs are currently using advanced analytics to drive growth, which tops the cross-industry average of 28%. Even so—in what is a big surprise to me—our analysis shows that banking CFOs are less likely than their peers in other industries to use digital technologies to drive deeper predictive insights.4
While the momentum around advanced analytics is a good thing, slow adoption of predictive modeling is a potential liability for middle market bank CFOs. It should be addressed swiftly because CFOs need full data visibility and transparency. But historical views simply will not suffice. The past is no longer prologue, if it ever was. The pandemic changed so many dynamics that CFOs who try to chart the path forward from the rear-view mirror could find themselves going in the wrong direction.
3. The CFO as people officer
Across banking, there’s a silent revolution happening in the finance workforce. The converging forces of digital transformation and pandemic-related remote working models are quickly changing how work gets done, often to a greater degree than in any other functional area. As more core finance tasks get automated, finance professionals can do more value-added, strategic work that depends on uniquely human skills. To play off that familiar idiom—these aren’t your father’s finance skills.
This means that banking CFOs need different talent. Seventy-four percent say they are introducing non-traditional skills into finance. These are skills in analytics, business agility, value architecture and storytelling.5 Who would have imagined that CFOs would target communications as the top skill they are recruiting for? Yet this is what they told us. As middle market bank CFOs reskill and recruit talent, they must remember that their people are the heart and soul of what makes middle market banks so unique.
Middle market banks’ secret weapon
As a finance major myself, I’ve always had special respect for bank CFOs. I truly believe that as middle market banks prepare for what’s next, CFOs can be the heroes—the secret weapons, even—of their organizations. They can simultaneously manage the core and extend the possibilities for growth and competitive differentiation.
Finally, I also think that the structure and culture of these banks, compared to the national players, gives CFOs more room to embrace this hero role and make it their own. I can’t wait to see what they do.
Connect with me on LinkedIn to stay up to date on the latest trends in middle market banking.
About the research
The data in this blog is from banking industry respondents to the Accenture CFO Global Survey. Accenture surveyed more than 1,300 CFOs and senior finance executives—including those in the banking industry—from around the globe and conducted more than 40 qualitative interviews between April and June 2020 as part of our ongoing research into the changing roles and responsibilities of CFOs.
1-5 Accenture CFO Global Survey, banking industry data