Top 7 Finance Trends and Priorities for CFOs in 2024

Formerly concentrating on financial reporting, CFOs nowadays have a significant role in gathering, evaluating, and forecasting financial data. Furthermore, since technology is essential to corporate innovation, CFOs need to know how to use new technologies to improve company performance.

Being up to date on modern technology is crucial for CFOs since it affects so many different aspects of the business structurally. This is due to the increased importance of fields like working capital management, compliance, cybersecurity, and fraud protection. Companies operating in these areas that rely on legacy functions may find themselves exposed to dishonest players as well as more agile rivals.

Though the International Monetary Fund anticipates a "soft landing" for the world economy in 2024, many CFOs are nevertheless bracing themselves for risk and volatility in the upcoming months.

1. Embracing digitization and AI-powered automation 

Digital transformation is still leading the financial industry in 2024. Innovative technologies like blockchain, artificial intelligence, and predictive analytics are essential for CFOs to adopt to improve data-driven decision-making, optimize workflows, and increase operational efficiency. CFOs may reduce risks, maximize resource allocation, and open up new growth opportunities by utilizing digital tools. Let’s take a look at some of the stats:

• The majority of finance leaders—64%—think that their teams are not utilizing digital finance tools effectively.
• 23% of finance executives say their teams are adept in digital skills.
• Compared to 11% of finance talent without digital finance competencies, nearly 19% of talent in the field is actively seeking new employment.

Digitalization and AI-powered automation are not merely fads; rather, they represent a fundamental shift in the way CFOs function and contribute value to their companies. These developments signal the end of labor-intensive, manual operations and the beginning of automated, data-driven workflows. CFOs will search for more efficient methods to extract insights from the vast amount of data. The effect of your financial operations can be greatly increased by using these instruments. 

2. Unlock the ROI of Reinvention

A self-funding budget is necessary to support enterprise change, as top-performing CFOs understand. These CFOs have no qualms about incorporating cutting-edge technologies like GenAI into their business models, as well as introducing new sources of income and expanding into untapped regions. Using technology to its full potential can save or reduce expenses while increasing productivity and performance. Technology tools can also increase the return on investment for large investments, but they should be used with the utmost care to prioritize the assessment of the whole cost of risk across all domains: business, programs, technology, data, security, and controls.

A lot of businesses looked at this technology, but some CFOs were hesitant because of worries about data security and PwC states that nearly 88% of business executives struggle to capture value from their technology investments. Despite concerns, it is necessary to test generative AI in 2024 in order to determine its advantages for the business and finance department. To create predictive models and improve scenario analysis capabilities, more than half that is 52% are giving top priority to the application of technologies like generative artificial intelligence (GenAI) and advanced analytics. CFOs may find it more convenient to utilize these tools as major software providers incorporate them into their standard offerings.

3. Leading Transformation Efforts

In 2024, CFOs will place high importance on leading transformation projects, with a special emphasis on digital transformation inside their organizational frameworks. In today's business environment, digital transformation is not simply a catchphrase; it is a necessary component for staying competitive. 

According to a study by Gartner, 70% of finance transformation is less impactful or slow in progress.  In order to successfully manage this change, CFOs need to take the initiative. This entails spotting transformational opportunities and spending money on instruments and technology that improve financial performance.

Implementing artificial intelligence (AI) and robotic process automation (RPA) tools to automate repetitive operations like data entry, utilizing predictive analytics for financial forecasting, and improving fraud detection are some key tactics that may be employed. CFOs may make better judgments and run financial operations more effectively with the help of these technologies. Working together with other organization stakeholders is also very crucial. CFOs should work closely with functional executives and department heads to identify areas that stand to benefit most from digital transformation. The goal of this cooperative strategy is to optimize several organizational functions.

4. Evaluating and Improving the Finance Functions Strategy

Enhancing finance plans starts with a thorough analysis of the current function to pinpoint its advantages and shortcomings. Aligning the finance operations with the overarching organizational goals is a crucial step in this process, which may call for changes to resource allocation, financial targets, or investment strategies.

The function of talent management is equally significant. CFOs' primary focus in 2024 will be on luring, keeping, and training employees with expertise in strategic finance and data analysis.

However, it might be difficult to find people with the correct combination of technical and strategic talents; this is demonstrated by the fact that 51% of CFOs prioritize hiring people in areas that are essential for the expansion of their organizations.

To guarantee that the financial function is in line with the goals of the organization and complies with legal requirements, risk management, compliance, and open stakeholder communication are also essential. Improving the finance function's strategic coherence is the goal of this strategy.

5. Leading Change Management Efforts

Implementing changes to financial systems, processes, and procedures to minimize disruption and maximize benefits is known as leading change management in the finance industry. These adjustments could include anything from financial reporting procedures revisions to accounting software updates. To provide a seamless transition to new procedures and systems, CFO leadership in change management is essential for lowering opposition and fostering cooperation. To make sure that the finance department is prepared to meet market problems, financial executives must proactively identify and handle possible obstacles.  CFOs' laser-like concentration not only reflects current financial trends but also fortifies the entire financial operations within a dynamic corporate environment.

6. Improving Finance Metrics, Insights and Story-telling

A data-driven strategy is being adopted by CFOs more and more, with an emphasis on developing a broad range of metrics to track various financial characteristics like operational efficiency, profitability ratios, and liquidity. In this manner, CFOs can offer current and comprehensive insights into the financial health of the firm, which is crucial for decision-making at all organizational levels. In order to accomplish this, executives are also using data visualization and sophisticated analytics, which are tools that help in comprehending financial patterns, CFO priorities, possible dangers, and new prospects. 

Furthermore, CFOs' responsibilities are expanding to encompass financial storytelling. The process of storytelling entails converting convoluted financial data into narratives that are easily comprehended by a variety of audiences, such as employees, board members, and investors.

In general, the goals of CFOs are to improve communication both inside and outside the company and to encourage a more thorough understanding of the financial health of the entire organization. This modification reflects how CFOs' roles are evolving to meet the demands of contemporary firms.

7. Optimizing Costs 

As always, cost optimization is the primary concern for executives in the business sector. These days, CFOs are giving profitable growth and digital transformation top priority when assessing cost and investment decisions, and they are doing it by taking an enterprise-wide approach. Efficient cost management through the identification of areas where expenses can be cut without jeopardizing the organization's strategic goals is one of the main aims.

CFOs will also prioritize performing cost-benefit assessments on a regular basis, optimizing resource allocation, streamlining procedures, and cutting overhead costs. 77% of CFOs are using new cost-cutting strategies as a result of growing economic strain.

Additionally, CFOs will keep collaborating closely with other important members of their organizations, including department heads and executives. By working together, experts want to match budgetary priorities with the strategic and operational requirements of various departments, guaranteeing that cost-cutting initiatives contribute to the organization's overarching objectives.

Conclusion

The CFO is essential to an organization's performance and the accomplishment of its strategic objectives. CFOs will have a number of challenges to deal with such as complicated rules, swift advancements in technology, and economic instability. CFOs must concentrate their attention on critical areas that support long-term success in order to effectively address these problems. 

The aforementioned priorities, which include strategic planning, efficient risk management, adopting digital transformation, and enhancing stakeholder involvement, offer CFOs a well-defined structure to augment financial performance and bolster organizational expansion.

In order to guarantee that their companies are well-positioned for success in the years to come, CFOs nowadays need to be flexible and sensitive to shifting market conditions and developing trends.