CFOs drive growth strategies as banks alter finance modelsNEW YORK, KYIV, 7 APRIL 2008. The chief financial officers (CFOs) of global banks are wielding increasing influence - and feeling the responsibility that comes with it - as senior management and directors expect CFOs to sharpen their focus on strategic issues rather than concentrate solely on monitoring and reporting financial information, a new survey finds. Ernst & Young and CFO Research Services’ The Finance Operating Model Matters reveals that in order to rise to the standard now expected of them, CFOs must first improve their financial operations, which have become disjointed and inefficient in the wake of rapid growth in the industry. Only then can CFOs become true strategic partners, helping to evaluate new products, provide leading indicators on business performance and drive merger and acquisition opportunities. “Finance has always played a crucial role at the world’s leading banks, but the job is evolving,” says Sam Knox, Vice President and Director of Research at CFO Research Services. “CFOs need to spend less time keeping score and more time leading.” As the lingering credit crunch compels firms to boost their balance sheets and safeguard against future market shocks, the need to invest in finance has never been more urgent. The survey – which involved executives at 14 of the world’s largest banks – found that CFOs who bring their business acumen to bear on strategy can have a lasting impact on their firm and the industry. Banks are aiding this evolution of the CFO by centralizing responsibility for a wide variety of finance roles to allow a CFO’s holistic perspective to flow to all parts of the organization. Other leading practices that CFOs and their firms could pursue, according to the survey, include:
“CFOs are elevating their game to meet the demands of today’s market conditions,” says T.J. Letarte, Head of Ernst & Young’s Americas’ Finance and Performance Management practice for financial services. “In addition to the important work they’ve always done monitoring and reporting, they’re also helping to provide their firms with a comprehensive, actionable view of risk. By doing so, they’re creating more competitive institutions that can face future challenges more resiliently.” “In Ukraine CFOs are getting more actively involved in efforts to raise banks’ profitability. The role of the CFO is shifting from fixing financial results to managing strategic and operational matters,” says Kostiantyn Neviadomskyi, Head of Technology and Security Risk Services in Ukraine. “The potential to raise the efficiency of a finance department lies in centralizing and establishing shared services for various bank operations. This poses the task of making accounting consistent and maximizing the use of IT solutions to automate daily operations. To a certain extent, the finance function is evolving similar production towards maximum automation and unification of operation and production.” Natalia Partach
About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential. In Ukraine Ernst & Young established its practice in 1991. Ernst & Young Ukraine now employs more than 500 professionals providing a full range of services to a number of multinational corporations and Ukrainian enterprises. For more information, please visit www.ey.com/ukraine. About CFO Research Services CFO Research is the sponsored research unit of CFO Publishing Corp., which publishes CFO magazine in the United States, Europe, China and Asia. CFO Publishing is an Economist Group business. |
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