Adaptability, Alignment and AI Will Define CFO Role in Future

The macro landscape continues to undergo significant transformations.

And these ebbs and flows and evolutions don’t happen in a vacuum — they increasingly impact the responsibilities of enterprise leaders, particularly the finance teams tasked with serving as the financial steward — and, increasingly, as a strategic corporate architect — of their organizations. 

“The job has become a little more strategic partner to the CEO,” Lisa Mogensenchief financial officer at RiskOptics tells PYMNTS for the series, “A Day in the Life of a CFO.”

“In this environment, rapid decision making is a must, it’s the new normal. And with that, there’s generally a level of financial have backup that is required, which is where the CFO comes in to provide support for data-driven decisions,” Mogensen explained, highlighting the increasing emphasis on cash management, customer-centric strategies, and the ever-evolving tech stack.

Historically focused on reporting, CFOs now find themselves deeply involved in collecting, analyzing and predicting financial data.

The importance of digital fluency has surged, added Mogensen, with CFOs extending their influence beyond finance into marketing, sales and product implementations. The heightened focus on customer needs has led to a more profound understanding of accounts receivable portfolios, enabling quicker identification of trends and risks.                        

The Shifting Landscape of Financial Leadership

The CFO’s responsibilities now include navigating the complexities of a virtual world, ensuring seamless operations, and maintaining a heightened focus on profitability and cash management.

“I think the COVID era transformations are here to stay,” said Mogensen, noting that while the absence of geographical restrictions on talent has its benefits, the CFO’s role has expanded to encompass communication and fostering the human element, compensating for the absence of traditional office environments.

“Three things have become even more important: cash, return on investment, and runway if you’re not yet profitable,” she added. “And the challenges are having the right talent, cutting the right costs, improving our forecasting indefinitely, and monitoring profitability.”

That’s why Mogensen’s advice for other CFOs is to “watch your investments closely, and that includes investments in people, technology and the business more generally. Now is definitely not the time for speculation…keep your eye on the ball and watch what’s happening.”

The Impact of Digital Tools and Technological Innovations

In a world where the only constant is change, CFOs need to embrace adaptability and strategic foresight, frequently with the help of new technologies and other digital innovations.

“Technology is invaluable if implemented and configured correctly, freeing up time for more strategic, diagnostic and solution-oriented work,” Mogensen said.

Still, that doesn’t change the fact that tightening belts is essential — and CFOs need to scrutinize each component of their tech stack, assessing each layer’s necessity and impact on their company’s objectives, she said.

Artificial intelligence (AI), in particular, is a “time saver,” Mogensen added, while cautioning that responsible governance around the technology is critical to leveraging its capabilities, particularly within the finance office.

“You need to read and edit [what AI produces], but it is a great first start and saves a lot of time, particularly in things like contract management reviews,” she said, explaining that AI can actually help with working capital management by “determining an individual customer’s payment pattern, average collection period, and help you build up your forecast” which would be a huge lift — and nigh impossible, manually — for businesses with thousands of customers.

“But as CFO, we are stewards of the governance, metrics, data and reporting around AI. Finance is more of a gatekeeper than they ever were in the past, and it’s critical to make sure that the data’s pulled from the right source, the information is accurate, the information is clean, the right users have the right access to the right information,” Mogensen explained. “Effective automation leads to efficiency, which hopefully leads to increasing accuracy and profitability.”

Embracing a future where technology evolves rapidly and its deployment is necessary to navigate the complexities of modern finance, Mogensen highlighted that “it’s really about two things: accuracy and efficiency.”

Looking to the future, she predicted a continued partnership between CFOs and CEOs, with technology, particularly AI, playing an increasingly prominent role in automating repetitive tasks and allowing more time for senior leaders to partner and strategize.