One of the most important aspects of the job as a Chief Financial Officer, or CFO, is the regulation and integration of tech across a company.
With cutting-edge standards for financial technology (fintech), a business is capable of streamlining, automating, and even auditing its own books and systems. CFOs are responsible for coordinating the integration of this tech.
Because of the unique relationship CFOs have with fintech in the modern business world, it is essential for these executives to keep up to date on tech trends and standards.
The role of Chief Financial Officer has evolved from its original support and managerial accountant roots to a more strategic, tech-powered advisory position. The CFO not only understands the history and performance of a company but also plans and forecasts the future.
This would be impossible without the help of modern technology, groundbreaking innovations powered by artificial intelligence, and machine learning. AI does what humans cannot by applying analytical processes across massive sets of data. The results are software and technology with the potential to automate processes and generate helpful insights.
Because of this, CFOs must be at the forefront of innovation and strategizing for their organization in terms of fintech. With new tools like robotic process automation, predictive modeling, and forecasting software, and Distributed Ledger Technology, CFOs can apply greater efficiency and foresight to any accounting department.
The marriage of accounting and technology drives a new set of solutions. Since so much of modern business is dependent upon financial data, automating processes and auditing them with the power of AI brings convenience and security to the workplace.
The range of tools now on the market, however, is wider than you might imagine. CFOs use their unique expertise to select the best tech for their organizations.
Every business has different financial needs. The size and range of your accounting department will influence the specific software and toolsets that you apply and your fintech strategy.
However, there are three categories of modern fintech that CFOs across industries are commonly using today. These are:
In fintech, the greatest source of automation typically comes from robotic processes. RPA represents the use of tech to “capture and interpret existing applications for processing a transaction, manipulating data, triggering responses, and communicating with other digital systems,” according to the Institute for Robotic Process Automation and Artificial Intelligence.
RPA is essential in business process automation (BPA), which tends to focus on a more holistic view of business tasks. CFOs, however, have to use a combination of RPA and BPA in their approach as the head of a company’s financial division.
Automation tech like billing systems, chatbots, payroll assistants, and more all bring automation to various accounting tasks. With the help of these tools, CFOs manage larger business processes to streamline efficiency and reduce errors.
It’s easy to understand how helpful modeling tools can be for financial executives when you understand their capabilities. Predictive modeling software can forecast financial data into the future so that CFOs can better strategize and innovate. This helps them prepare their organization for fiscal quarters and years to come.
Now, predictive modeling tools have leveled up with advancements in AI and machine learning processes. These cognitive computing innovations allow systems to understand and learn from the numbers they crunch. In turn, they can analyze data for future scenarios and let CFOs know what actions have the greatest probability for revenue.
In addition, modeling software is one of the top trends among all AI and blockchain-based technologies because of its ability to fight cybercrime. Through modeling and predicting the patterns of data breaches, the software can better recognize and stop unauthorized access across a financial system.
Distributed Ledger Technology (DLT) keeps records of a transaction on a digital database in multiple places so that bookkeeping can be kept accurate and secure. This helps to defeat most issues of fraud and error, as the system can track and reconcile the unique data points regardless of whether they are static or dynamic.
Blockchain, popularized by Bitcoin, is one common DLT that has gained ground in the fintech sector. Because of its decentralized and highly secure system of transferring information across a peer-to-peer network, blockchain can be a great way to handle financial data — especially for an organization that conducts business internationally.
DLT makes secure financial records and streamlined auditing processes possible. As a result, these technologies are a common choice of CFOs, especially as the world increasingly relies on seamless, digital global trade.
CFOs and the fintech tools they apply shape how businesses manage their — and their customers’ — financial information. The right tech can help ensure the security and efficiency of the process. At its most powerful, fintech can even give CFOs predictive insights into all kinds of business actions.
All these amazing features are powered at some level by AI, machine learning, and DLT systems like blockchain. The impacts of these technologies on the accounting industry mean automation and error reduction on an unprecedented scale.
Whether you’re an executive or not, applying these systems in your own accounting endeavors can have positive consequences that ripple throughout your business.