Finding the "New Normal"​ for FP&A in Financial Services

Finding the "New Normal"​ for FP&A in Financial Services

Brian Kalish 30/07/2020 2
Finding the "New Normal"​ for FP&A in Financial Services

Part of the ‘new normal’ for FP&A means remote work and virtual collaboration.

While roundtable participants are trying to find the right cadence and length for virtual meetings in their organizations, doing so is often a challenge. “Most of the time we would just drop by someone’s office for a quick five minute chat. Those chats have turned into 30-minute calls on my calendar,” said one participant. “We’re working to find ways to adjust that to free up calendars and to figure out new, creative ways to collaborate, share information, and coordinate as a team.”

Another participant agreed that meetings in his organization had risen considerably since the organization’s transition to remote work: “What we’ve done recently is switch to one-on-one meetings every other week and having weekly roundtables twice a week to keep everyone up to speed on what’s going on.” Broadly speaking, the development of effective virtual communication and collaboration practices will be critical for FP&A’s ability to pivot to the new normal.

Budgeting and Forecasting Challenges

While no one can predict the future, roundtable participants and their organizations are confronting a present reality that is even more challenging than they ever could have imagined. As one participant pointed out, “Even the most adverse scenarios we imagined were never really as bad as where we are right now.” The financial services sector and its customers are finding that their usual approaches to data, analysis, and forecasting need to be rethought at a fundamental level. “All of the drivers are out the window and we need to start looking at new ways of analyzing data so our forecasting can still be relevant and useable,” noted one participant. Pivoting to the new normal will require new approaches to data and new measures of success, along with the ability to continue providing insights that can help leaders decide what path to take going forward.


Financial services roundtable participants noted that budgeting is going to be an extremely difficult endeavor for 2021. “August is just around the corner and there are going to be demands to start putting the budget together for next year. But I can’t even say what the next month is going to look like. What sense does it make to spend the time and resources to come up with a budget for the year when next month is so uncertain?” asked one participant.

Many organizations in industries ranging from consumer products to healthcare have successfully eliminated budgeting in favor of driver-based or rolling forecasts. However, the idea of eliminating budgets in favor of driver-based rolling forecasting is often a hard sell, not only because it would mean the end of target-based bonuses but also because of resistance from leaders and executives. “I was shocked to hear that the Board were the ones challenging the change, because the technology is available now and you can embed as many assumptions as you want. Within minutes, you can change the scenarios and deliver a different report about the impacts to the income statement, balance sheet, cashflow statement, and more.” As always, FP&A leaders who want to move their organizations beyond budgeting will need to make a strong case to leaders about why and how this change will help drive the business forward.


Roundtable participants also noted that forecasting is a formidable challenge at the moment. “We’re in an environment where we’re constantly forecasting and re-forecasting while things change daily. We’re just trying to stay on top of things as best we can,” noted one participant. Even as they struggle to gain purchase on daily realities, the cadence of forecasting has accelerated in many organizations. “We used to forecast every month,” said one participant. “Now we do it once every three days, based on transaction trends. But we’re not really built out for a daily system intake when it comes to building our financials—the system is based on a monthly forecast.”

Scenario Planning

Participants agreed FP&A should help business leaders consider a wide range of scenarios. “The pandemic has highlighted an opportunity to have a range-based plan based on scenario analysis rather than a set plan.” While planning for multiple scenarios undeniably makes the planning process more complex, it does give management a better chance to look at what could possibly happen and develop action plans in response. When the unexpected occurs, organizations that have planned for a wide range of scenarios will be more prepared than those that do not. As one participant noted: “Planning is cheap, but reacting in a crisis is really expensive.”

The ‘New Normal’ for Data and Analysis

FP&A professionals at financial services organizations are working to find a new normal for data and analytics, which make planning, analysis, and forecasting possible. The speed at which organizations need to gather insights from data has increased significantly since the onset of COVID-19. For example, before the pandemic, participants from organizations that support banks and credit unions would typically review transactions on a monthly basis. Now, that data is being pulled weekly—or even daily. “We do business with a large credit union and they want to be able to predict credit card charge-offs. That involves leveraging an incredible amount of daily data,” said one participant.

To help meet the demand for more and faster data, some organizations are beginning to leverage external data to help predict patterns like credit card charge-offs and consumer spending habits. “Five years ago, it would have taken a long time to get the insights that companies are looking for now,” one participant said. The ability to get data and insights much more quickly by leveraging a broader stream of data has been extremely valuable for banks, credit unions, and other financial service providers.

Having access to faster data, however, does not guarantee that an organization has the right insights to make the best decisions—In a pandemic, it can be hard to even determine what those insights are. “We are definitely getting to the point where we’re getting faster insights— The question now is: What are the best insights to have? That’s where we’re spending a lot of time,” noted one participant.

Automation Clears Space For Value-Addes Work

New regulations and compliance requirements pose a threat to finance’s ability to partner with the business and perform other value-added activities. For example, any bank that played a role in processing Paycheck Protection Program (PPP) loans needs to create and send a report for each loan. “A bank would need to hire an army of people to do this heavy transactional labor,” one participant noted. The need to do so would not only be a challenge for organizations who can’t afford to hire more employees, but would also take time away from the ability to provide financial expertise, analysis, and insight that helps drive the business forward.

The good news is that banks are starting to invest in emerging tools such as Robotic Process Automation (RPA) to help process PPP loans and associated reporting. With RPA, bots can automatically pull relevant data about a loan, populate it into a report, and even e-mail it to the right recipients once it’s due. “The process is very complex, but the beauty of RPA is that it doesn’t matter how complex it is as long as it’s rule-based and can be mapped,” one participant said.

Automation can help streamline finance processes and save organizations money—especially if process steps designed with humans in mind (such as walking a piece of paper down the hall for physical signatures) can be circumvented entirely through automation and digitization. More fundamentally, automation “takes low IQ activities off the plates of high-IQ people”: By automating manual reports, for example, FP&A professionals have more time to focus on business partnering and other activities that help organizations think strategically during a chaotic time.


From collaboration challenges to new data needs and beyond, COVID-19 is forcing FP&A professionals at financial services organizations to pivot to new ways of working. The good news is that activities like scenario planning and tools like RPA continue to be effective in helping organizations work smarter, faster, and with greater confidence. These leading approaches not only save organizations money, but save FP&A professionals time that can be reinvested toward providing valuable insight and analysis for business leaders. 

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  • Anthony Bretten

    It's an exciting period for FP&A professionals. I embrace more technology and innovation.

  • Andy White

    I feel down when I am not in the office, it's not the same excitement and energy

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Brian Kalish

Finance Expert

Brian is Founder and Principal at Kalish Consulting. He is Former Executive Director – Global FP&A Practice at AFP. He has over 20 years of experience in Finance, FP&A, Treasury and Investor Relations. He previously held a number of treasury and finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third and Fannie Mae. He has spoken all over the world to audiences both large and small hosting FP&A Roundtable meetings in North America, Europe, Asia and soon South America. Brian attended Georgia Tech, in Atlanta, GA for his undergraduate studies in Business and the Pamplin College of Business at Virginia Tech for his graduate work. In 2014, Brian was awarded the Global Certified Corporate FP&A Professional designation.


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