Mid-Year Check Up: The Top 5 Challenges Facing CFOs

At the start of 2017, analysts around the world vocalized their expectations about the opportunities and complexities that would impact the C-suite in general and CFOs in particular. With a new president in the U.S., Brexit in the European Union, cyber attacks in almost every major market and industry, and continuing acceleration in financial technology innovation, CFOs have had plenty of complex, micro- and macroeconomic impacts to address.

Analysts, writers, and C-level executives alike predicted that a few central issues would dominate the thoughts and decisions of business leaders throughout the year. In no particular order, they include:

  • Managing risk, particularly related to economy, regulation, cyber threats, disruptive innovation, privacy, and demographics
  • Managing costs and profitability against the backdrop of economic change and specific industry pressures
  • Managing evolving technology in the financial organization, particularly as it impacts fraud detection, regulation, and compliance
  • Navigating the constantly changing regulatory environment
  • Leading talent acquisition, management, and retention within financial teams to equip the organization for growth
  • Producing and acting on information generated by raw business data
  • Building the capacity to act on opportunities and challenges with agility, confidence, and fresh perspective
  • Preparing for new accounting standards (FASB, IASB, ASC 606 protocol)
  • Collaborating across functional areas to link critical business priorities including sales, distribution, marketing, finance, and customer service
  • Employing appropriate software tools to gather, store, and apply financial and other business data to inform strategy and productivity

In February, our HORNE Public & Middle Market team weighed in with their predictions of the top 5 CFO challenges. Theirs reflected the voices of our clients, who confirmed that they were focused on the political climate, their changing role, shareholder value, big data, cyberthreat, and a turbulent regulatory and tax environment.

Revisiting the Top 5 CFO Challenges for 2017

As we reach the mid-point of the year, we are revisiting this question to see which of these expectations have come to fruition or changed. Those organizations that have thus far been able to ride the wave of uncertainty, predict and prepare for hard trends, and harness data likely have hit the mid-year feeling somewhat secure. For the most part, we see continued focus on a few core considerations.

  1. The role of the CFO continues to evolve. The modern CFO is performing a broader, more cross-functional role. Even as they continue to oversee the numbers and contribute to the strategic direction of the business, they are becoming more involved in strategic planning and growth, and spending more time making data connections in the numbers.
  1. Cyber security is taking ever-greater precedence. CFOs are overseeing the digitalization of the business and employing technology to build competitive advantage. That opportunity brings a level of exposure they must be able to test and protect.
  1. Regulatory uncertainty continues. Even with new regulations and compliance deadlines, this may be the most stable of all the challenges. While the actual changes themselves may be new, the ability to take strategic action in the face of changing leadership, interest rates, tax regulations, global currencies, and other related factors remain central to the role.
  1. Siloed data. CFOs have plentiful customer data but most—particularly those in small organizations—still lack the resources to transform it into useful business knowledge. For banks, requirements like CECL compliance deadlines offer opportunities to put the frameworks in place to harness information into useful analytics and insights, but many remain under-resourced.
  1. Disruptive innovation in the financial industry is changing the competitive landscape and market demands. Nascent players like fintech companies have taken hold quickly, elevating the role of technology from tool to platform and ratcheting up the need for agility. The market environment has become more complex and volatile, especially for traditional companies (like community banks) and the CFO is at the helm of a boat that may be charting an entirely new path.

We would love to hear from you. Do these challenges reflect your own? What is your leadership doing to keep a windshield view as 2018 looms on the horizon? Subscribe to the blog so you can stay informed and join the conversation. 


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Topics: Bank Trends, CFO

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