How the finance function will transform in the next five years

The finance function in five years’ time will have a broader purpose, enabled by a recalibrated mix of people and technology much different to how it looks today.

In brief

• Technology solutions will be developed more quickly
• Work and tasks in the finance function will be redistributed
• The skills mix of the finance team will change, with a greater focus on data and technology skills

Here are five key changes we can expect to see in the finance function looking five years into the future.

1. Faster, more efficient tech solutions

Technology has a huge role to play in finance function transformation and the next five years will be classified by the acceleration of solutions much more quickly than before. Apps and programmes will be rapidly developed and tested, then dropped or taken forward. ERP solutions will continue to develop and the majority will be cloud based to improve organisational resilience. The recent EY Banking CFO Survey found that 80% of large banks and 23% of challenger banks have already implemented cloud and SAAS programmes.

2. Redistribution of work

While it’s nothing new that the finance function continues to evolve, we can expect this evolution to increase further. But in addition to that, we can expect the balance of time spent on different areas and activities to shift, too. Reporting is likely to grow in complexity as banks and other organisations increase their focus on non-financial reporting. However, with the sophistication in technology and automation of reporting processes, ‘human’ capacity will be focused on analysis, decision-making and strategy.

3. Recalibrated skills mix

In the transformed finance function, a rebalancing of skills and expertise will also be required. Of course, qualified accountants will still be needed to oversee and implement evolving accounting standards and other regulatory and legal requirements. However, a larger proportion of the finance function will comprise data scientists or business analysts: people who can use the data, understand the IT systems that generate it and answer questions from the business. Finance functions will also likely have their own software developers. In the EY Banking CFO Survey, 78% of respondents agreed they would increasingly need to recruit finance executives with technology and data related skills in future.

4. Emergence of the Chief Value Officer

Along with the transformation of the finance function, the CFO’s role is undergoing a similar transformation. In the coming years, we’re likely to see the emergence of the Chief Value Officer, responsible for driving the change needed across the entire organisation to increase value delivered to multiple stakeholders. This broader remit will require new skills and levels of understanding of both financial and non-financial data and insights.

5. Boardroom influence

The level of transformation that will classify the next five years will be underpinned by the determination and perseverance of CFOs who will need to overcome organisational and cultural barriers in order to make their new finance functions a reality. Collaboration and influencing in the boardroom will be more important than ever, particularly when it comes to attaining budget approval. However, the most pressing challenge is likely to be that of finding and retaining talent. Due to the war for talent around future-focused skills, CFOs may need to rely on upskilling the existing labour force. The successful CFO will overcome barriers through collaboration and influence across the c-suite, with a particular focus on CTO, CEO and CHRO.

We’ll be discussing the evolution of the finance function and more at our EY CFO Forum on 25 March. Find out more here.