How to organise Financial Departments in a digital environment

By Kyriba

Digital technology is radically transforming the corporate finance landscape. CFOs see this daily: financial mathematics can no longer capture its complexity. One has to master cloud computing, machine learning and block chain; fintech companies have become leading counterparties on the same level as banks; in recruitment, competition now primarily comes from start-ups; sought-after skills in recruitment are no longer the same (data scientists)… but that’s only the tip of the iceberg. The transformation is truly occurring on a subatomic scale and we need to shift our perception to understand the full scope.

Objective – Finance as a Service

In a landscape previously dominated by financial institutions, universal banking was the preferred choice of CFOs. Then digital technology emerged and challenged the existing processes. Regulations encouraged Open Banking and, to optimise profitability, banks unhesitatingly handed over entire aspects of their business to start-ups. In the end, the industry fragmented and became highly specialised at the same time as it was adopting digital technologies. By shifting our view to the software industry, we can better understand what is taking place.

Within companies, “on premise” software first evolved toward monolithic, multi-functional systems commonly known as ERP. Next, publishers of SaaS (Software as a Service) took the stage, supplementing this landscape with a broad array of relatively inexpensive solutions in niche markets. Finally, the API revolution integrated complex, custom-designed end-to-end services through a patchwork of micro-services delivered by a huge network of start-ups. This is precisely the fundamental transformation that is disrupting the world corporate finance and the work of CFOs.

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