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ONLY 14% OF GLOBAL CFOs CONFIDENT THAT FINANCE FUNCTION HAS SKILLS NEEDED FOR GROWTH POST PANDEMIC

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Research from BlackLine suggests Finance and Accounting is struggling to keep up with the pace of digital transformation across the wider business

 

A global survey of C-suite executives and finance professionals commissioned by BlackLine, Inc. (Nasdaq: BL), a leading provider of financial controls and automation software, has revealed that just 14% of CFOs are confident that their finance function has the skills required to help their organization grow and adapt over the next five years.  Furthermore, more than a third (35%) of C-suite respondents believe Finance and Accounting (F&A) is failing to keep up with other areas of the business when it comes to digital transformation.

The survey of 1,150 business leaders and finance professionals (conducted by independent research agency Censuswide across the US, UK, Germany, France, Singapore and Australia) suggests that talent acquisition and retention are high on the C-suite’s agenda as companies seek to implement more aggressive growth strategies post-pandemic.  However, it also identifies a major skills gap that threatens F&A’s ability to provide the consultancy, analysis, planning and due diligence required to support these broader business goals.

 

New Generation of Talent Critical for Growth

With close to a third (32%) of C-suite respondents saying they are planning to focus more on international markets for growth and acquisitions and a similar number (31%) planning to be more aggressive when it comes to acquisitive growth over the next 12 months, skills will be critical.  Many C-suite executives plan to invest heavily in talent with nearly a quarter of these respondents (24%) focusing on developing existing talent from within, and a similar number (23%) on new talent acquisition at a leadership level to drive post-pandemic recovery and growth.

 

The Finance Challenge

The research showed that skills and talent are particular concerns for CFOs.  When asked what their most pressing business concerns are for the next five years, many CFOs (32%) said maintaining a robust balance sheet is their number one priority, but almost the same number said the same of acquiring new talent (30%).  This concern is likely being driven by a skills shortage within F&A, something that was acknowledged by most survey respondents, with only a fifth (20%) expressing confidence that F&A currently has the right skillset.

 

The Post-Pandemic Skills Gap:  Need for Talent With Concurrent Tech and Business Skills

When asked about the skills their organization currently has within the finance function, both C-suite executives and finance professionals highlighted a number of vital gaps.  More than a third (38%) of respondents said that not everyone in their finance team has the broad business leadership knowledge or skills required today.  A similar number (35%) said that not everyone in their finance team has the skills to help with more strategic work (like analysis and planning).

31% of global CFO respondents said they do not currently have enough people with software and technology experience within the finance function.  Furthermore, when asked what the biggest challenge is for recruiting future F&A talent, more than a third (36%) of overall respondents noted that it is difficult to find candidates with both technology and F&A skills.

“It’s positive to see that so many companies are now focusing on growth and that business leaders plan to pursue ambitious strategies to make this happen.  The global economy is in a period of recovery and it is vital that the finance function, which lies at the heart of business, is appropriately skilled to address the many challenges ahead,” said BlackLine CEO Marc Huffman.  “Business leaders must ensure that we retain and develop the people we have and are also in a position to attract the best the market has to offer; but as the survey shows, this can be challenging.”

 

The Way Forward

Responses suggest there are a number of areas businesses could invest in to help solve this modern-day skills gap, including updating outdated technology or processes.  The importance of addressing these issues is clear, with a quarter of respondents (25%) saying legacy technology and processes at their organization make it difficult to attract the best candidates.  In fact, legacy technology and processes were seen as more of a challenge for recruitment than being able to offer a competitive salary (19%).  Other challenges and opportunities identified include:

  • The need to reduce transactional, mundane work.  When asked about the biggest negative impact on finance employee retention the top three issues were: a lack of opportunities to develop new skills because transactional work takes up so much time (28%); no time to focus on future career development (26%); and becoming bored with the mundane, repetitive nature of the job (26%).
  • Addressing outdated perceptions of F&A roles that make it challenging to recruit good candidates.  When asked what stops people from starting a career in F&A, a lack of understanding about F&A’s integral role within the wider business was identified as the main reason by both C-suite execs and finance professionals.
  • Revising traditional educational pathways that young F&A candidates tend to follow.  29% of C-suite and F&A professionals believe academic courses need to focus more on technology skills.

Mr. Huffman continued: “Finding people with the right technology and F&A skills seems to be at the heart of the issue.  To attract the best and the brightest finance talent moving forward, we must reevaluate tools, training and development, in addition to the perceived role that F&A plays within the business.  Delivery of business growth as opposed to purely survival will be dependent upon building a finance function that is as technology literate as it is financially literate.  People need to be freed from the mundane and given the space to focus on strategic business insight and value.”

 

Business

IS SCARCITY OF TALENT THREATENING THE UK’S FINTECH CROWN?

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To be attributed to Rafa Plantier, Head of UK and Ireland at Tink

 

From the Square Mile to Canary Wharf, London has been the historic centre of global finance, with long-established trading exchanges and trusted financial institutions. In the digital era, it has also ensured that it’s moved with the times to become a thriving hub for fintech.

But the UK financial services sector is now at an inflection point. In the past year, London’s position as a global fintech leader has been under threat. Earlier this year, Amsterdam overtook The City as the largest European share trading hub. The European Banking Authority moved from London to Paris. And Dublin, Paris and Frankfurt are all competing to win a greater share of the European financial marketplace.

The culprits of the shift are the twin challenges of the pandemic and Brexit, combined with the speed of technological transformation in financial services – disrupting the traditional flow of people, capital and ideas. So the pressing question for the industry is: how do we maintain and, more importantly, accelerate momentum to retain London’s fintech crown?

The answer revolves around one key thing — people.

 

Diverse talent drives innovation

Attracting the best talent is crucial if the UK financial services sector is going to continue to thrive and retain its global position as the preeminent financial centre.

In February 2021, the Kalifa Review laid out a strategy and delivery model for the UK to lead the fintech revolution, covering five key areas. These included skills and talent, investment and international attractiveness and competitiveness. But what became clear was that access to the right level of highly skilled talent was one of the biggest challenges for UK fintech, with barriers spanning both domestic skills shortages and the need to access foreign talent seamlessly.

As a native Brazilian in the UK, working for a Swedish-owned fintech, I understand these challenges as well as anyone. I love London, but we must recognise that fintech firms need unique talent and skills, and such a talent base can’t be met by a single city – not even one as resourceful as London. Not only do fintechs require technology and data specialists, but also experienced managers with good knowledge of high-growth companies and financial services.

As someone lucky enough to have worked with startup and scale-up fintechs across the world,  I understand the unique grounding that comes from being a part of a high-growth global company. That’s why I believe it’s vital that we attract people from across the world with commercial experience at ambitious, rapid-growth businesses — so they can bring this experience to bear on the UK financial services sector.

At the same time, many companies face renewed pressure to create new services and products to meet expectations for growth. That is why it’s critical that the UK has access to people with the right technical skills in areas such as software engineering, DevOps, Cybersecurity and data science.

Put simply, having the smartest minds delivering the best products is good for everyone. It drives efficiency, productivity,  growth and, ultimately, prosperity.

 

The UK is open for fintech

The UK should be proud of being a fintech pioneer and the driving force behind legislation that helped usher in the era of open banking. There is now an exciting opportunity to take this even further. Having access to a diverse pool of talent and skills will empower the financial services industry to create innovative products to tackle complex social challenges, such as better B2B payments, financial inclusion and climate change.

The good news is that the UK government clearly recognises the role the industry has to play in driving growth and innovation. The 2021 Autumn Budget reaffirmed commitments to reskill the nation. With £3.8bn budgeted for skills and a formal criteria for the long-awaited Scale Up Visa, the Chancellor announced a set of proposals that will support the breadth of our sector — from startups right through to unicorns and incumbent banks. This will be essential for fintechs like ours to continue to trailblaze and for the UK to differentiate itself on the global stage.

In an increasingly competitive global landscape, and to sustain momentum, we must keep talent avenues open to attract the best of the best in the industry. As one of the fastest-growing areas of the UK economy, the benefits of nurturing UK fintech to drive productivity, growth and lead the UK’s post-pandemic recovery, cannot be overstated. 2021 has seen a surge of activity in the industry and I am eager to see what London’s fintech sector can achieve in 2022.

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THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT

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THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT

Jennifer Sims, Senior Consultant at Xledger

 

The world of finance software is evolving quickly, but with many new software contenders entering the market it can be a mindfield for organisations. Many finance teams are already using multiple accounting apps and software packages for bookkeeping, payroll and invoicing to service individual needs. Whilst it may work fine for now, this segregated approach isn’t sustainable for long-term growth. The world is swiftly moving to agile, automated ways of working. As a result, there is a growing need to choose suppliers that can fulfil multiple functionalities within the one platform.

Financial software is evolving at such a pace that it can be difficult to keep up. Changing up a finance solution is a big step and ease of migration can be a substantial factor in determining which solution provider to go with. But how do you choose a solution that will grow with your business and still offer something innovative in five or ten years down the line? The fear is always that non-techie organisations will end up falling behind, but in such a highly concentrated industry, how do you decide which solution would work best for you?

 

Cloud-first: the term that makes all the difference 

You could find a ‘cloud-based’ service with an application that comes with automated audit trails to make it easier to meet compliance and record-keeping obligations, for example. But for a solution to offer all of the many future benefits promised by the cloud, it needs to have been built specifically for a cloud environemt from the outset – ie. not an on-premise built system that has been later adapted. Cloud-first services (true cloud) were always intended to leverage economies of scale, cope with live updates, be accessible from anywhere with an internet connection, and to scale rapidly, to name just a few of the many benefits.

When we talk about innovation in financial technology, we’re not just talking about software that makes it easier for the financial controller to create reports. If eliminating reliance on Excel spreadsheets is the only tangible benefit you have to really shout about, you are missing out on the real deal. With ‘true’ cloud finance software the sky is the limit.

Finance and accounting technology needs to directly meet the needs of the finance function and support the wider business needs.  When looking at accounting software platforms you’d be hard pressed to find one that doesn’t now promise ‘cloud-based’ enterprise resource planning (ERP) capabilities. The cloud is nothing new, but it’s the way that a solution harnesses this environment that makes a real difference. And here is where there is a need to read between the lines.

 

Automate more with true cloud 

Historically, repetitive and manual tasks are typical of the finance role – from invoice postings to expense claims handling – these can overwhelm the finance team. Research by Xledger[1] has found that an enormous 91% of CFOs and finance decision makers are carrying out at least one of these repetitive tasks as part of their job. What’s more, senior finance leads are averaging a whopping 25 hours per week carrying out repetitive and manual tasks, compared with 15 hours for other finance decision makers.

A modern, true cloud finance system can enable your business to automate repetitive tasks and provide one source of truth so that teams can make informed business decisions that will help to scale a business. Bank reconciliation, dashboard creation and reporting are just some of the tasks that can be handled automatically.These capabilities are aiding overtasked finance teams and saving hundreds or thousands of hours a year.

Whilst different companies are at different stages in their digital transformation what is clear is keeping up with the latest technology is fundamental to the future success of an organisation.

Xledger is a true cloud finance solution. The basics include invoicing, robust general ledger accounting, detailed slice and dice reporting, purchase orders, billing, VAT reporting, and cash and bank payments. It also adds process and structure to the enterprise with procurement and inventory, budgeting and forecasting, and project accounting. Users are always on the latest version of the software and with regulation more stringent than ever today, Xledger is ISO 27001 accredited.

Choosing the right provider for your financial ERP solution comes down to whether it has the fundamentals right. When hosting all of your vital data in the providers’ own servers, it should evidence a highly tested security process that comes with backup services as standard.

As our demand for technology capabilities grows and as ERP models progress, innovation will become the structure for growth – and there is no end to the possibilities.

 

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