How innovation stepped in the financial sector
The digital revolution also affects the role of finance. Chief Financial Officers today have a strategic role when it comes to govern the Digital Transition; with the support of new technologies, they will be able to direct the business towards the creation of value for all activities.
So, even for CFOs, data is the protagonist!
But why is data analysis so important for Finance? And what role do new technologies and Artificial Intelligence play in this game? And then, who is the Augmented CFO?
Who is the Augmented CFO?
The Augmented CFO is not a new professional figure, but the evolution of the role of the Chief Financial Officer in a direction towards innovative technologies, which have now become fundamental as well as business governance skills. The new “enhanced” CFO who knows and understands the importance of new technologies will be more inclined to Digital Transformation.
The “new” CFOs cannot fail to understand how Analytics, Artificial Intelligence and Cognitive Computing can create value through data processing, product innovation and the automation of processes if they want to transform their company in a sustainable way.
Data Lake is the foundation for value creation.
In order to fully reap the benefits of digitization, it is necessary to create a Data Lake if you want to organize any type of data. It is possible to generate actionable insights and support data-based decisions, gaining a significant competitive advantage by enriching and analyzing the information collected. Data and analytics, with the help of digital technologies, allow finance to predict and analyze the return on investment in a more effective and scientific way, saving money, time and therefore creating value.
However, we can’t talk about digital transformation without also talking about the cloud. If in the past, the information was stored separately locally, now the “cloud” not only has space in terms of potentially infinite storage, but also a computational capacity that allows you to connect, extrapolate, synthesize and identify future scenarios realistic thanks to Artificial Intelligence
The tools of the Augmented CFO
There are many sources for Big Data, but thanks to the Cloud and the Data Lake it is possible to develop Advanced Analytics products that will allow the CFO to obtain reliable analysis and forecasts, simulate business scenarios quickly and then make informed decisions for the government of the business innovation.
The way of working of the CFO has therefore changed: he/she can monitor business performance, predict its progress and be able to manage the budget in real time to maximize the creation of value and minimize the risks of change.
The role of the Blockchain
The typical functions of the CFO, already described, can be simplified and made more secure by the BlockChain technology. In fact, the truthfulness of the data is ensured; reporting will be more efficient and timely. The characteristics of simultaneity, non-modifiability and transparency imposed by this technology will bring great benefits to the world of finance.
Some examples in which this technology could have an impact in the field of finance could be the management of payments, simplifying money transfers between different currencies; the management of financial data and documents such as those related to bank guarantees, or identity management, simplifying the costs of identifying their customers.
Food for thought…
- We recommend the episode “Tomorrow’s CFO” and “The finance skills of the future” in The Better finance Podcast
- Here you will find the episode of McKinsey’s podcast, “Inside the strategy room”, dedicated to the role of the CFO in the digital age.
- Finally, if you want to learn more about Robotics, Artificial Intelligence, 3D Printing, Augmented / Virtual Reality, Big Data and Internet of Things, here is a miniseries to understand the main 4.0 technologies, entitled, Societing4.0 – What are the 4.0 technologies.