Data science and analytics is top priority for leaders in finance
In finance, data is paramount to success. Six out of ten finance leaders place leveraging data science and analytics for strategic insights and tactical decision making as top priorities for the coming year.
The ability to utilise data analytics and “big data” to achieve a competitive advantage and manage operations and strategic plans ranks among the top issues for board members and C-suite executives worldwide. Data analytics can be applied across three key areas. In terms of planning, it can be used for effective risk profiling, the testing of data via simulation, and statistical sampling. Data analytics can also enhance the execution of audits – providing quick and effective monitoring of continuous controls, keeping watch for indications of fraud, recognising patterns to anticipate future risks, and control simulation.
Unsurprisingly, then, according to Protiviti’s latest Finance Trends Survey, the security, privacy and analysis of data are the top priorities for finance leaders going into 2019. All three top priorities identified have some link with data, with enhanced data analytics highlighted as very important by 62% of CFOs. The paper surveyed close to 400 finance leaders and professionals, including CFOs, vice presidents of finance, and a broad range of finance directors and managers, data is the dominant theme in the finance landscape.
Data is seen as important because it can help to unlock commercial insights, boosting sales, as well as boosting management reporting and decision making, but also make for better internal operations of the finance function, with 53% of respondents seeing data analytics as key for realising process improvement. However, using data analytics effectively means that several pre-requisites need to be in place.
One key area that CFOs and finance leaders are struggling to manage is data quality. As with most other groups, the analysis and reporting that finance delivers to the organisation rest on the quality and completeness of the data available. To this end, data governance is critical. CFOs and finance leaders need to ask if there is a robust data governance organisation in place, as well as who owns the data from different parts of the organisation (for example, companies must know if they have a designated data steward).
Data quality also is improved through master data management – something that can require substantial effort and expense. Once it is in place, however, CFOs and other organizational leaders obtain a much clearer understanding of different functions and areas of profitability and risks. Ultimately, without quality data, results from their analytics efforts could be viewed as questionable. This is also true when considering the increasing use of artificial intelligence and machine learning grows in the months and years ahead, data quality will become even more paramount and foundational to transformation.
Data security
In an age of cyber security threats, and hefty fines now resulting from the implementation of the GDPR – should firms fail to safeguard their data – another major issue is keeping information safe. If financial data is leaked, through whatever means, organisations can also face large reputational damage, as well as financial woes, explaining why security and data in finance application is top priority of surveyed finance leaders. Three quarters of CFOs and VPs, and 68% of other finance roles both listed it as their most important factor.
The priority is particularly notable among financial services organisations, as well as organisations with a billion or more in annual revenue, as these face great volume, complexity and sensitivity in their data. Looking ahead, this will only become more important, as the volume of data grows, as does scrutiny from customers and regulators, and as more finance data warehouses move to the cloud, which introduces a broad range of new security risks.
Other priorities that rank high on the agenda are changing demands of internal customers, dealing with regulatory change, cloud transitions and tax requirements. Interestingly, one topic much hyped in finance realm is robotics process automation (RPA). However, all the talk is not materialising into concrete interest. One out of five CFOs and finance leaders view the use of RPA to be a high priority for the next 12 months, while more than two out of five believe it to be a low priority.
Tony Abel, a Managing Director at Protiviti, explained that many organisations are still getting up to speed on understanding how to best leverage RPA. However, he added, growing expense pressures and the need to become more efficient mean the use of RPA will grow over time, as one of its primary objectives is to optimise efficiencies internally.
Abel concluded, “One of the greatest advantages of RPA is that it can be deployed easily to perform repetitive tasks across multiple systems. For many finance organisations, a great place to start is the accounts payable area: vendor setup, invoice processing, payment verification and account reconciliation.”
