Today, Chief Financial Officers are being tasked with responsibilities that are future oriented, such as mitigating economic downturns risks or prevention against sudden trade policy changes to maximize the value of the shareholder. At the same time, CFOs still have old responsibilities such as audit and compliance. This means that today's CFOs need to find the perfect balance between completing past responsibilities and helping with the company's future, especially considering the growing risks.
Volatility - The CFOs New NormalRisk mitigation and management is becoming an urgent need due to the following reasons:
- Macroeconomic conditions
- Steep tariffs
- Uncertain political climate
- Volatile markets
- Innovative technologies and analytics
Visibility is Key to Successfully Managing RiskWhen there is visibility into all transactions of the company, it becomes easier for finance teams to take on risks created by today’s constantly evolving business circumstances Firms that have complete visibility usually tend to be more effective in risk management. They also have more confidence in both their existing employees as well as their processes which help them in managing overall and specific risks. Organizations that are digitally mature enterprises have a higher chance of risk mitigation as compared to firms that do not. Their advanced technology helps them mitigate all risks.
Learning from the Leaders: People, Process and TechnologyCFO in firms today state that they are staying proactive by utilizing the perfect balance created in their companies of technology, talent, and processes. The leaders being spoken about here are defined here as different companies that have been rated as “industry leaders” in both risk management as well as operational efficiency. These leaders stand out because of the balance they have gained. They have a higher chance of having appropriate strategies for managing risks, the right technology, and the right skill sets in their employees. The confidence of the balance is present in every risk category.
- CFOs today need to adopt new technologies for effective risk management for their firms
- At the same time, they need to take care of their previous and already existing functions
- By adopting high-tech and undergoing digital transformation, CFOs can mitigate the constant risks to their firms