Are CFOs getting too distracted from their core role by all the tech that businesses are adopting?

Digital technologies are intended to improve efficiency and productivity in the treasury function, yet newly released East & Partners research suggests the opposite is taking place.

Increasing complexity and a ‘watering down’ of the core responsibility of the CFO and corporate treasurer to that of a somewhat expanded CIO role have placed significant strain on Australian businesses.

This relatively recent occurrence, although largely not well documented, is critically important to quantify and address given the associated ‘bandwidth’ issues that manifest in core treasury functions such as liquidity management, cash visibility and cashflow forecasting.

That is particularly emphasised by rising stress levels resulting from the current challenging operating environment amid the devastating coronavirus pandemic and wide scale business closures.

IT support and supporting the digital requirements of the company more broadly emerge as the most frustrating distraction from day-to-day cash management and account service activities, nominated by almost three out of four corporates (70.3 percent).

This confirms the changing underlying role of the CFO to remain at the forefront of digital innovation and fintech developments sweeping through financial services including Open Banking, Application Programming Interfaces (APIs) and the New Payments Platform (NPP).

Which functions distract CFOs the most from their core cash management role? 

Internal compliance and reporting are unsurprisingly also cited as a major diversion by two thirds of middle market enterprises (60.5 percent) in tandem with regulatory requirements (52.5 percent).

So how can banks provide dedicated support to reduce their administrative burden and automate lengthy documentation procedures?

Hiring and firing are identified as a constant barrier to growth however the opportunity for transaction banks to offer guidance or advice are limited in this respect. Ideally a firmer understanding of the sizeable impost IT support, red tape and staffing have on CFOs time and resources can help significantly improve bank’s understanding of customer’s business and industry, a factor frequently nominated as the most important area of increasing need within the corporate segment.

“These results are especially compelling in the context of record high levels of customer switching intentions exhibited by corporates in the next six months. Businesses are demanding industry specific advice and support, down to the granular level of their own business operations specifically, as a direct result of the growing burden to manage non-core role requirements” stated East & Partners Head of Markets Analysis, Martin Smith, commenting on the results.

“This is a prime opportunity for banks to recalibrate antagonistic customer relationships in the wake of the Royal Commission and current coronavirus crisis. Innovation for the sake of it will not cut it however, as corporates are clearly expressing concerns over their current responsibilities being stretched too thin,” he added.

East & Partners expanded Customer Sentiment reporting addendum provides a deeper understanding of advocacy drivers, trust perceptions and defined return on investment (ROI) implications from satisfied customers preparedness to advocate.