Looking Forwards Not Backwards: New Ways of Working for the CFO

The bold CFO that steps into the breach and takes ownership of the bank’s data asset can transform the way they work and add massive value. Granular, real-time data analysis can not only provide better visibility across the bank, but establish new approaches, products and ways of working that put the CFO firmly in the driving seat for strategic change. Mastery of data transforms their role from rearward looking to driving towards the Bank of the Future.

As we’ve established in previous blogs, banks already have rich data. They understand customers’ income, expenditure and borrowing patterns. They already use data in aggregate and in segments. But, as we’ve seen, this often takes place in laborious batch processes that require heavy manual interventions. They are retrospective and often more about enforcing rules than innovation. What if someone were to operationalise real-time data to provide granular insights that could flow across the organisation to create new value? The CFO is best placed to do so.

There are hundreds of potential applications; let’s look at liquidity management as an important responsibility for the CFO. The right data platform could enable analysis of income and expenditure down to a single customer level, across all products. That data could roll up to support highly accurate and responsive liquidity management providing a real-time view for better treasury control and more accurate calculation of retail funding requirements.

Using this data for accurate forecasting and predictive ‘what if’ analysis brings further benefits; for example, modelling the impact of a business failure on all the banks’ customers in a specific town.  More timely and faster interventions, potentially even automated funding stabilisers, could mean less capital tied up as surety against fluctuations.

Suddenly the CFO not only has better control but is equipped with new insights that present opportunities to grow the top-line, not just manage the bottom line. Rather than reporting on what has happened, the CFO can define what should happen. The data which drives liquidity management can be used to offer customers enhanced services, and new products such as tailored budgeting tools. Creating services that help individual customers become more resilient could generate revenue – but more importantly could also reduce defaults which should feed lower risk weightings and reduced capital requirements.

Orchestrating the right data delivers many new levers with which the CFO can influence success. But it is also clear that it makes no sense to invest in and build myriad point solutions that prevent this bank wide view and use of data. Data re-use across an enterprise data platform saves time, money and risk by minimising movement and duplication of data between silos. Less time is wasted juggling spreadsheets and reconciling data, freeing finance staff to work on more strategic programmes. As regulators are moving toward demanding real-time data these manual processes will become unsupportable, so creating the basis for automated reporting is increasingly critical.

But that is just the start. CFO’s need to champion the use of data across the whole bank add new value. The data-intensive world they occupy allows them to spearhead better use of data as an asset across the bank. The CFO of the bank of the future will lead efforts to integrate data across all operational and financial disciplines creating the environment not only to accurately and comprehensively value the bank’s data asset, but to leverage it to create new business value and regain their place as the CEO’s strategic partner.