Today’s banking and insurance CFOs face challenges ranging from inflation to supply chain constraints and regulatory requirements while competing and growing revenue in a dynamic global marketplace. According to a new IDC survey sponsored by Oracle, these challenges are driving investment in advanced fintech.
IDC’s recent Business Brief, Road Map to Driving Finance Transformation in the
“IDC’s findings showed that a large majority of financial institutions crave integrated fintech systems and access to close, near real-time data on all aspects of their financial operations,” said
The survey confirms that today’s CFO and finance office need more advanced and innovative technology, but the market also reflects this need. The global market for financial applications reaches
Several other factors influence the desire to invest in fintech. Organizations have weathered recent market volatility and global disruption due to the pandemic, which has also highlighted the need for more connected planning and processing. As a result, 72.9% of CFOs surveyed focused more on business resilience. Forty-four percent of respondents said lack of visibility into financial data is a challenge, and 70% of banking executives believe their lack of reconciled data is a major barrier to providing timely information. More than a third (36.7%) of respondents are also investing in digital transformation to meet regulatory rules, such as IFRS 17 and
Respondents also cite environmental, social and governance (ESG) issues as a driver for the finance function to play a more strategic role. The new sustainability standards aim to help organizations manage all of their ESG impact, including a transition to a Net Zero operating model. Additionally, there is increasing pressure from investors for organizations to consider ESG factors in their operations. Both have brought to the fore the impact of ESG on financial performance. Financial transformation can help improve the visibility of ESG impacts within an organization and accelerate reporting that supports new regulatory compliance requirements while informing ESG-related business decisions.
Finance teams that are agile and have access to modern data management tools and processes can accelerate time to analysis and take action to address some of these challenges.
Deep cracks in financial data and risk management
It is clear that the complex and siled management of data in the finance function is inefficient and drives up operating costs. More than half (56%) of respondents said they urgently needed to reduce the cost of collecting, correcting and reconciling current data. 44% of finance leaders said they saw significant room for improvement in financial data management, and 38.2% cited inconsistent data and hygiene as a barrier to improvement.
Financial institutions have revealed that they are seeking automation and machine learning to streamline key financial processes such as reconciliation and auditing. A large majority (81%) of finance executives said they would be willing to pay more for a cloud-native architecture that includes microservices and containers. This technology makes it easier to transfer data between cloud providers, deploy services independently and in different languages and frameworks, and avoid downtime. When modernizing finance to a cloud-native architecture, financial institutions can significantly reduce their total cost of operation and be more flexible to meet highly dynamic market demands.
But managing data and profitability cannot be done without the right talent in place. Organizations also highlighted the importance of talent acquisition. More than a quarter (27.5%) of finance executives cited the desire to attract and retain top talent as a driver of finance modernization. To do this, 27.5% of respondents are investing in financial modernization technology because it can help make an organization more attractive to potential employees.
“As financial institutions contemplate their post-pandemic outlook, they continue to seek out cloud-native applications that can have a transformative effect on their bottom line,” said
About the survey
Learn more about modernizing Oracle Finance here.
IDC, Business Brief Road Map to Driving Finance Transformation in the
IDC, Worldwide Financial Applications Forecast, 2022-2026: CFOs go beyond the numbers.
Oracle, Corporate Communications
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