Ways in which fintech will influence CFO role

As fintech continues to grow and develop, the role of the CFO is also changing. In order to keep up with the times, CFOs will need to become more familiar with fintech and its workings.

What is the current role of a CFO?

The role of a CFO is to ensure that the financial health of a company is sound. They are responsible for financial planning, budgeting, and forecasting. They also oversee accounting and treasury operations. In order to keep up with the ever-changing landscape of fintech, CFOs will need to become more familiar with it.

Fintech is a term that is used to describe the technology that is being used in the financial services industry. It includes technologies such as blockchain, artificial intelligence (AI), and machine learning. These technologies are changing the way that financial services are being delivered.

CFOs who are familiar with fintech will be able to take advantage of the opportunities that it presents. They will be able to implement new technologies into their companies and improve the overall financial health of their organisations. In addition, they will be able to better compete with other companies in the industry.

The role of the CFO is changing and those who are familiar with fintech will be better equipped to meet the challenges of the future. Fintech is a rapidly growing industry and its impact on the financial sector is only going to increase. CFOs who are not familiar with it will be at a disadvantage along with the companies that hire them.

How is the CFO role changing?

The role of the CFO is changing as a result of fintech. Financial planning, budgeting, forecasting and other similar tasks can be easily performed by AI. In fact, AI can even use deep machine learning to come to conclusions that many highly paid CFOs come to.

So why will companies hire CFOs when they can simply get AI to do all the work?

Because the human factor is always going to be important. While AI has advanced quite a lot, it has not yet reached a level where it can fully replace humans. To this end, AI can take over bookkeeping, reporting, forecasting and even compliance. It cannot yet carry out the task of high stakes decision making that CFOs are trained for.

This is where the opportunity for synergy between man and machine is present. This opportunity is one that many companies are pouncing upon. CFOs have their workload reduced by AI but at the same time, their decision-making skills have become even more important.

As Jeremy Irons said in the movie “Margin call”.

“Do you care to know why I’m in this chair with you all? I mean, why I earn the big bucks. I’m here for one reason and one reason alone. I’m here to guess what the music might do a week, a month, a year from now. That’s it. Nothing more.”

This is what CFOs are paid for. With the rise of AI, they are being assisted by AI as they make high stakes decisions.

Companies that implement AI-based solutions, will need their CFOs to use the AI to simulate all possible options on the table and then implement the most appropriate one. This is not something that will happen in the future. When the pandemic broke out, many companies particularly in the biotech and pharmaceutical sector utilized AI to simulate various scenarios.

They then used the outcome to aid their decision making and found their growth rate multiplied many times. One such outcome was the decision to create remote teams. The AI simulation was quick to suggest that instead of shutting down businesses or forcing essential staff to come to offices, businesses can create dynamic remote teams so that their employees can work from wherever they are.

The caveat here is that CFOs will need to upskill so that they know how to work with AI. Artificial intelligence nevertheless is our creation. It has flaws, that can go unnoticed and create undesirable outcomes if the CFOs who are working with it do not know how to deal with AI-based outputs.

Apart from decision making, here are a few ways in which AI will influence the role of the CFO:

Increased transparency and accountability

One of the key benefits of fintech is its ability to increase transparency and accountability. This is because fintech solutions provide real-time tracking of financial data, which can be used to monitor performance and compliance. As a result, CFOs will need to be more rigorous in their financial reporting and ensure that all data is accurate and up-to-date.

Greater focus on risk management

With fintech comes increased risk, which CFOs will need to manage effectively. This will require a greater focus on risk management, as well as on developing risk mitigation strategies. CFOs will also need to be vigilant in ensuring that all systems are secure and that customer data is protected.

Increased reliance on technology

As fintech continues to evolve, so too will the role of the CFO. This will entail a greater reliance on technology, with CFOs utilising software and tools to help them manage finances more effectively. It will also be important for CFOs to stay up-to-date with the latest technological advancements, in order to make sure that their organisation is taking advantage of all that fintech has to offer. It is quite possible that the roles of CTO and CFO may merge in future.

Conclusion

Fintech has already begun to affect the role of CFO. Not only is it an opportunity for better financial reporting and transparency, but also a chance for greater focus on risk management and increased reliance on technology in order to take advantage of all that fintech has to offer.