By W.B. King
As the holiday haze lifts, industry insiders in the financial services space are offering thoughts on what could be in store for 2024 and beyond. To this end, Pigment recently released the report: Office of CFO 2024: Expectation vs. Reality for the Modern Finance Professional.
“While many finance leaders are not yet ready to delegate all responsibilities to software products and platforms, these solutions can bring fresh perspectives and enable organizational collaboration,” the report noted. “The true value of these advancements lies in their ability to shift chief financial officer (CFO) time allocation from nuts-and-bolts tasks to more strategic items.”
With offices in Paris, London, Toronto and New York City, Pigment offers an enterprise-grade business planning platform, including its recently released Pigment AI.
During August and September of 2023, the report surveyed in-house finance professionals who work at an organization of 500 or more employees in the United States.
“Thirty-four percent of finance leaders state they are now responsible for decision-making across the larger business,” the report stated. “But only 7% of finance leaders are completely confident in their ability to make strategic decisions, plan accurately, mitigate risk posed by external threats, and steer their business through unpredictable events.”
The report also found that 89% of finance leaders are “making monthly decisions they know are based on inaccurate or incomplete data” and 53% “lack access to the right tools needed to conduct long-term growth planning.”
The AI Conundrum
While the report found that 92% of those polled see value in artificial intelligence (AI), 57% are concerned that adoption will eliminate their own jobs. Yet, 67% maintain a hopeful attitude that AI will soon revolutionize the finance industry. Part of this shift is being realized in the changing role of financial executives. For example, 64% said they “feel pressure to evolve their role beyond perceived number crunching and advise on business decisions ahead of time.”
Among hurdles faced by those surveyed, 89% feel that on a monthly basis they are making decisions based on inaccurate or incomplete data. Fifty-five percent said they “lack the visibility into the basic business strategy and data needed to provide strong organizational-wide strategic guidance.”
Another area of dismay is that 54% of finance leaders “waste time on tasks” that don’t “positively impact” future strategies. Forty-two percent feel they are not developing new capabilities and skills and 25% are “putting off increasing revenue, which is directly harming their company’s bottom line.”
Democratize Financial Information
The report noted that today's concept of “doing more with less” is about employees using AI to create a more connected and collaborative culture.
“Seventy-six percent of finance leaders say access to the right tech is critical for the finance team to achieve their key goals and 68% of finance leaders expect their company to increase their investment in tech tools for financial planning over the next twelve months,” the report offered.
Despite the want for this cross-collaboration, 54% of those surveyed said that they do not have the “requisite tools needed” to conduct long-term growth planning.
“AI, in particular generative AI, lowers the barrier to entry and makes planning more accessible. It has the potential to democratize financial information so that anyone can interrogate the data in the ways that are most helpful to them,” the report stated. “However, AI is not a catchall solution to existing problems, but it does add tangible benefits to existing ways of operating, offering real value to an entire organization.”
The report offered the following business gains from organizations utilizing AI:
Forty-four percent claim that AI allows leaders from non-finance departments to easily use tools without any specialist training.
Thirty-six percent say AI can bring more people from outside of finance into the planning process.
Twenty-nine percent believe it is the time savings AI generates.
“A common theme seems to be emerging: a belief that one of AI’s key benefits will be democratizing access to tools and data,” the report noted. “Feature-rich AI platforms combined with unified data lower the barrier to entry for finance and non-finance teams, making data accessible, applicable and understandable to all.”