banking and financial services transform office of finance

Budgeting, Planning & Forecasting

- 4 min read

How can banking and financial services transform the finance function and empower finance leaders?

Historically, finance professionals have been typecast as corporate “bean counters” – purely operating as controllers of expenditure and budgets. However, in a modern setting, the finance function has a far more valuable and integral place within the enterprise. Finance is at the core of understanding what has happened, what could happen, and the (financial) impact potential decisions will make.

To gain this value and insight, organizations need to arm their finance team with prerequisite skills and technologies. The utilization of data – at all levels of the business – and the ability to drive efficient and effective processes that cut through laborious, manual tasks will prove transformational for both finance professionals and the company. So, how can businesses accomplish this?

Transforming the role of finance leaders in banking and finance

The Resurgent Finance Leader (RFL) report from Board — surveying 600 finance leaders worldwide on key topics surrounding the transformation of the finance function — provides critical insight. The report explores the current state of digital transformation in finance and the progress finance leaders are making to ensure correct strategic imperatives are in place.

Looking specifically at the survey results from respondents in the banking and finance sector (108 to be precise), one key finding from the reports states that 71% believe a complete overhaul of how their organization’s Office of Finance uses technology to influence business decision-making and drive strategy is needed or a lot of improvement. Adding gravity to this statement is the point that 95% know they have a choice, either watch as the finance function is automated out of existence or seize the opportunity to change and take on a new and crucial role in the business. Clearly, the finance function is ready for a critical transformation.

While the signs are there, nearly half of respondents (46%) are not confident in their Office of Finance’s capability to capture valuable insights which drive business decisions and profitability. To overcome this, finance leaders must back their own transformational capabilities and adopt a more strategic and valuable role to guide the transformation process.

Thankfully, finance leadership and executives are ready to support the Office of Finance to achieve this new role and accelerate the digital enterprise. In fact, 98% believe that company culture should encourage the finance team to be creative, curious, and rebellious, allowing them to think quickly and constantly challenge the status quo.

The key to achieving this is to redefine the finance function entirely to deliver a new capacity to the business. Instead of operating purely as controllers of budgets and expenditures, the Office of Finance becomes integral to everything the business does – guiding decision-making processes from a financial impact standpoint. At the heart of this is data utilized through a digital platform. In fact, 97% of those surveyed agree on the fact that finance is the natural hub for data — the most strategic asset of the digital age data.

How can businesses transform their finance functions?

While both finance leaders and the finance function are primed for transformation, the question of how transformation is truly possible arises. In a recent webinar led by speakers from UK Finance, Board, and HSBC, the biggest challenge to the above was explored.

Rupert Kennedy-Alexander, Managing Director and Global Head of Strategic Planning, Analysis and Insight at HSBC, discusses the transformational journey he and his team are on. The key challenge that came from the discussion is the problem of integrating group strategic planning with regional, local, and operational planning. How can businesses ensure they are working to the same strategic goal across the enterprise if they are operating with disparate data and planning tools and driving all activities with spreadsheet-based planning models?

In short, the answer is inefficiently and ineffectively. Using spreadsheet-based tools such as Excel has severe limitations, and does not support collaborative, agile, real-time integrated planning and scenario modeling. Additionally, there is a real lack of control and governance with spreadsheets. The reality is that human error is a very real issue and spreadsheets can proliferate this problem. For example, entering incorrect data or copying formulas across cells without meaning to is easy to do. In turn, this can have material consequences.

Internal auditors are seeing this happen more and more with Excel-based planning. There must be more stringent control and governance over essential data tasks, and processes put in place to decrease and eradicate human error (such as automation of data entry and sorting). More and more, the adoption of technology becomes paramount for businesses.

Solutions like Board provide an integrated Decision-Making Platform that enables businesses to plan strategically at all levels. For the finance function, as finance leaders are increasingly expected to act as strategic advisors, the unified approach of Board enables:

  • the creation of plans, budgets, and forecasts with ease
  • reporting on performance and profitability
  • simulations and scenario analysis
  • internal control over closing and consolidation activities
  • the release and disclose of statutory financial reports

…and much, much more! In essence, the collaborative nature of the Board platform unifies reporting, analysis, simulation, controlling, planning, and workflow capabilities to drive digital transformation in the Office of Finance.

The evolution of constraint-based planning with HSBC

The role of the finance leader is evolving. Now is the time for finance leaders across banking and financial services to back their own transformational capabilities and take on a more strategic and valuable role. Watch our on-demand webinar to learn how HSBC creates a model that empowers its finance team to perform more effectively and why constraint-based planning is essential in today’s highly regulated market.

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The evolution of constraint-based planning at HSBC

Learn how Board supports the evolution and srategy of financial teams with constraint-based planning at banking giant HSBC.