The demand for skilled leaders in finance has only intensified further since the pandemic. Businesses are seeking more diverse opportunities and require talent with the knowledge and insight of digital transformation. Being capable of integrating remote workers has become a top priority for senior recruitment leaders.

The concept of today’s finance leader has shifted considerably with the rising focus on customers, the increase in digital, investor and regulatory measures. The pandemic has accelerated the need for top talent that can enhance and support businesses through difficult times. Candidates with diverse skills, particularly in digital and transformation are critical right now. For most businesses, future success will be dependent on a business ability to coordinate with remote workers.

The market is highly competitive for leading talent in the finance industry. Recruitment leaders have experienced a rise in urgency to find diverse talent in mid and senior-level roles within financial services. The pandemic has accelerated new trends, particularly around DEI and moving towards a more flexible working environment. While we experienced numerous challenges during 2020, the sector has gradually rebounded with strength and continues to be progressing further throughout 2021.

On the whole, financial services businesses have adapted quickly to remote work through the pandemic. Finance leaders have learned the best methods of managing a remote workforce and the importance of engagement and focus with their colleagues. The main challenge for the future will be integrating flexible working into a business for the long term. Now employees have experienced the benefits of working remotely, many wish to continue working like this and have higher expectations, in terms of hybrid and flexible working options. Employers that fail to offer flexible options will likely lose their employees to other businesses that prioritise these offerings to their workforce.

The rise of digital and transformation skills

There is an increasing demand for senior finance leaders with expertise in digital and transformation projects. Because of the pandemic, finance leaders are under further pressure to respond quickly and navigate their business towards more stability and resilience. Before the pandemic, many experienced a significant change in the finance sector due to digitisation. Traditional banks were pushed by emerging fintech to quickly transform their structure, services and their rate of innovation. Some have been effective in moving towards a more digitally-focused organisation, but others have struggled due to a lack of investment will potentially find it challenging to progress in the face of other more competitive and agile businesses.

More technology businesses are inevitably likely to enter the financial market. Fintech innovation will also continue to expand in the coming years. There is a growing activity with payments and open banking where traditional businesses invest heavily into these areas to maintain pace with emerging companies.

As we move into a post COVID world, the job market for senior leaders looks to be very strong. The demand for executive leaders was relatively high in 2020, but many businesses were cautious. The barrier in face-to-face contact and high levels of uncertainty about the future put many positions on pause. In 2021, the market began to clear and led to a significant rise in hiring. The delays experienced in 2020, combined with a strong economy, have resulted in a very prosperous job market.

The flexibility to work remotely has enabled candidates to consider more opportunities, resulting in a talent-driven market. The traditional idea of relocating to a business headquarters and travelling long distances has been replaced with a new era of home base work and travel when required.

When discussing the market with consultants, the industry has become very competitive and has shifted towards a predominantly candidate-driven market. Many businesses that traditionally focus on financial services have expanded into other financial technology, such as payment systems and cryptocurrency due to the surge of investment and advancement in these markets.

The challenges over the past year have placed even more focus on the position of the chief financial officer. The pandemic requires companies to have a dedicated and skilled leader at the CFO level capable of managing the challenges that emerged from the pandemic. It tested businesses in whether they had the necessary processes to accurately measure and have systems that generate insights into management and operations. 

The finance industry is actively looking to harness the insights from several data sources but existing limitations within their IT infrastructure. A new industry standard intends to make it easier for financial services businesses to manage data in the cloud, opening the potential to a surge of new service and product development.

Cloud services facilitate the technical efforts of sharing data by moving the responsibility for developing, securing and maintaining information to cloud-managed service providers. Up until now, the finance industry has had very few ways to verify that cloud providers can meet their strict requirements in terms of governance and security. The new CDMC standard, announced by the EDM Council, focuses specifically on these concerns.

The CDMC delivers a set of measures to ensure cloud environments meet the security and governance required for regulated industries like finance. The standard was developed by a working group in collaboration with Morgan Stanley, Refinitiv and over 20 financial institution leaders and cloud providers. The standard goes beyond data sharing and explores the needs of financial services businesses as they shift their operations into the cloud. Data remains an important area where finance businesses can improve their response to customer requirements. A standard that supports their transition to the cloud will only enhance their capacity to digest and share data with a wide range of customers.
Traditionally, data feeds going in and out have typically been custom created and managed individually. Finance businesses are under growing pressure to innovate and deliver enhanced services due to the growing number of new fintech companies, but they are attempting this with certain limitations.

Cloud data platforms handle this challenge by managing the technical complications of sharing and securing data within a business. Cloud providers must display their following to the new standard via an independent group.

CDMC presents several opportunities by accelerating the rate finance businesses can transfer their operations to the cloud. A vital result of this is the potential to apply financial data from various silos, enabling companies to create new revenue streams through innovative products and work together across the new data economy. Multiple data sources translate into easier access and sharing of data between teams and the wider business. Aside from that, it enables the entire industry to be more connected and share data in innovative ways with customers and their partners.

Tackling fraud is a particular challenge, especially as every financially related business is trying to combat this problem by using their data. With the potential to utilise data from multiple sources and the ability to explore activity in banks and payment processors, there’s a lot more potential to identify and tackle fraud.

This model has worked for the security industry, where trusted providers explore activity across participating businesses to detect threats. With a structured system enabling financial data to share in the cloud, a new wave of service providers can handle the pressure of detecting fraud for financial businesses and likely do it more effectively than before. This system requires considerable collaboration, but the CDMC has created the foundations of trust for these services to be delivered.

Another area where data sharing in the cloud can play a significant role is in ESG. Businesses that manage pensions and sovereign wealth funds are under growing pressure to ensure investments meet ethical and environmental criteria that are constantly requested by investors and regulators.

Defining whether a fund has a positive environmental score or performs business ethically can be challenging to determine. Third-party providers are capable of consolidating this information and effectively creating an authoritative voice for the industry. The CDMC standard applies a similar baseline of trust to ensure shared data services are available.

These are examples of how data sharing in the cloud can enable finance businesses to transfer their focus from developing varied IT services towards an innovative system that focuses on progress and remaining competitive. There is a range of third party data providers available in the cloud that can improve predictive analytics and generate a more personalised customer service.

Combining this data can enable finance businesses to improve their predictive analytics and deliver a more bespoke service to their customers, but this requires a relatively seamless data process. Managed cloud services simplify this process, and the CDMC represents a vital step in delivering a more efficient cloud migration system for the finance industry.

Artificial Intelligence or AI has transformed the financial services industry worldwide. In just a few years, the industry has become more dependent on technology supporting data aggregation, security, products and services. The initial launch of AI technology primarily focused on deriving insights. Since then, the adoption of AI has progressed to other areas of the finance industry, including fraud detection, customer identity and other authentication techniques.

The finance industry is continuing to automate and improve various areas of business with robotics and AI. We are likely to continue seeing a shift towards accelerated machine learning in enhancing human impact across the business. AI and ML have already established a better understanding of customer behaviours and preferences, enabling the finance industry to create a more personalised approach at scale and improve the overall customer experience. Moving forward, this element of AI will become even more important in the finance industry. The ability to provide a more custom and personal customer experience is valuable in finance. AI sits at the core of delivering these features. It can be in the form of personal loan offerings based on a range of parameters. Customers no longer need to select off the shelf products. Instead, individuals have access to unique offerings designed especially for them. AI-powered lending plans is another emerging trend. Portfolio management and retirement planning with the support of AI can deliver intelligent investment plans tailored to each individual.

As the finance landscape continues evolving, we will likely see emerging regulations beyond protecting bank data and other personal information. Having the power to detect trends in large data sets, AI can determine unique information based on data, such as online purchases or website visitors. 

The finance industry has the opportunity to select from a wide range of use cases to determine how they can apply AI to their advantage. They also have the data available to leverage the insights and deliver value for their customers and clients. Incumbent businesses will need to adapt and explore their operations, shift away from legacy processes and harness the real benefits of AI. With AI still evolving, early adopters of this industry will likely gain a significant advantage and the necessary experience to succeed. Businesses that fail to adopt these measures until established will risk falling behind their competitors in the future.

In terms of fintech, AI offers several disruptive opportunities. While these may present a threat to the incumbent banks, there are also many opportunities for traditional banks to partner with fintech. Banks have the added advantage of having an existing large customer base, while fintech has access to new technology and AI features. With the right plan in place, there is a chance to deliver a win-win situation for banks, fintech and the customer. Over the next few years, we will likely see a rise in automated technology interacting with the end-user. With the pandemic showing the importance of remote services, bots and other similar technology will become even more familiar in the finance world. A recent survey by EY discovered that 64% of financial businesses plan to significantly increase the use of AI technology within the next two years. Analysts believe AI will become a vital part of the finance industry, generating new revenue channels and automating processes to enhance the customer experience. No area of the finance sector is likely to remain disconnected from AI in the future. 

The UK financial services industry is experiencing a significant shortage of talent, intensified by the rising demand as a result of the pandemic. 

According to a study by the Association of Professional Staffing Companies (APSCo), job vacancies within the industry increased by nearly 38% between Q1 and Q2 of this year. The findings follow on from the report from the Professional & Business Services Council and the Financial Services Skills Commission discovered that on average, 32% of UK businesses were facing shortages within financial, professional and business services.

According to the APSCo findings delivered by BI specialists Vacancysoft, hiring levels within the financial services industry had already exceeded last year’s by the end of July by nearly 7%. Ann Swain, the CEO of APSCo, explains that the data indicates that despite the many challenges, the recovery from the pandemic is well underway, reflected within the financial services industry, where reports suggest a considerable demand for these skilled services.

Swain highlights that this trend is likely to continue throughout this year but, employers will continue to face talent shortages, which have been intensified further by the rise in hiring levels. As a result, recruitment agencies will play a significant role in supporting employers to find the talent needed to ensure an efficient recovery from the pandemic.

Research suggests that IT professionals continue to be the most in-demand skillset, with over 15,000 new jobs advertised this year, a figure that already exceeds the job count for last year. APSCo discovered that leading business JP Morgan has over 2,200 vacancies this year, equating to an 18.3% increase on the previous year. Global investment and financial services business Citi announced over 1,550 vacancies, recording a 39% increase last year.

The skills shortages and changes in employee demands would collectively create a record change in talent strategies within the finance industry. We are experiencing massive volatility and changes in the industry. Businesses have had to adapt and change much quicker to respond to changes and demands for new talent. Despite these shortages, many are not focusing on prioritising their recruitment strategies. The finance industry must recognise the changing landscape and ensure their plans and offerings to employees match market shifts and industry competitiveness. 

Businesses are either overwhelmed by too much data, limited access to their data or being held back by the technology they use to measure their information. The influence of digital technology in finance has been ongoing for years. The capacity to automate manual tasks by applying innovative technologies has enabled the finance industry to transition from applying conventional measures to a more insightful analysis of a business. 

While more businesses are applying analytics in some shape or form, recent reports suggest that only 14% of finance-related businesses display success in assessing large amounts of data created by systems to generate valuable insights. Finance teams that have utilised tools to enhance their forecasting, improving model scenarios can explore new insights that enhance decision-making. 

Improving Analytics 

Based on responses from senior finance executives worldwide, over 80% of analytics is missing the mark. One of the main reasons for this is that many businesses are not extracting the value and insights from their data. 

The survey discovered that its data is holding many businesses back. Findings suggest that only a little over 10% of organisations consider themselves as ‘data proficient’, capable of actively managing their data and equipped with the necessary tools and resources required to deliver the insights and competitive advantage they need. 

Ignoring the value of operational data

While many businesses have focused on enhancing their analytics, most are missing the real value of insights. To have a complete overview of the business, data from other systems and processes need integration and alignment with financial data to deliver insights and support decisions that enable a competitive advantage. 

Ignoring the Information Systems Strategy 

The development of new technologies has enabled many struggling finance-related businesses to maintain pace. While these new technologies may be useful, successful organisations need a more holistic approach towards their strategy, yet many are not focusing on this. Studies indicate that over half of finance-related businesses are not capable of consistently adding new data sources to improve their understanding of their business, and under half can utilise their non-financial data. However, when businesses discuss their most important tools for analytics, most points towards AI and ML and at the bottom of the list are usually the necessary building blocks required for delivering an efficient analytics system. 

Focusing on the bigger picture The results of the latest studies are consistent with other experiences across the market. Many medium to large businesses are struggling to reach the efficiency and agility required in their processes. This is usually down to dependence on traditional spreadsheets or fragmented systems that are not adequate for the business. 

Innovative businesses continue to improve their analytical insights by unifying their processes to deliver a single version of the truth for their financial results, budgets and forecasts. 

Converting trends in data into actionable insights 

Business leaders are taking the next step by combining transactional data, processes and systems consistently into their analytics. Accessing this type of confirmation from operational systems and combining it with financial data provides these businesses with real-time views into vital trends that support decision-making that impacts future results. Efficient and unified reporting and planning systems require the necessary analytical infrastructure and the right talent. In today’s rapidly changing global economy, having information systems that generate insightful and actionable analytics is no longer a ‘nice to have’ option but a critical element for the future.

The last year came with several uncertainties, exposing vulnerabilities in society and transforming how we do business. With the disruption to face-to-face services, the finance industry was forced to explore alternative, innovative ways to reach out and connect with customers.
Shifting from face-to-face services to alternative plans isn’t easy. Apart from the potential risk of losing existing customers, there are the added worries of complying with certain procedures and ensuring the service offered works for your users. With this in mind, several key challenges are facing the financial technology industry:

The shift in finance – the traditional finance industry has shifted dramatically as a consequence of the pandemic. In 2020, over 3,300 physical banks closed their doors in the United States. At the same time, we have witnessed a surge in challenger banks. At the beginning of 2020, only 4% of millennials and Gen Zs were prepared to use a challenger bank account as a primary one. By the end of 2020, this figure increased to 15%.

For financial providers, this means they will need to adapt and be prepared for a more diverse audience. Gone are the days of providing a one-size-fits-all solution. Instead, industry demand suggests that customers require bespoke services. One area to focus on is utilising technology solutions like big data and automation to ensure the services meet customer demands.

As the conventional banking industry changes, emerging industries like cryptocurrency are transforming too. Earlier this year witnessed a significant rise in bitcoin prices and other altcoins. The crypto industry is closely affiliated with blockchain technology and it is in this area where we may witness more changes. From smart contracts to trades, blockchain can offer security to traditional financial services and alternative markets. Reports suggest that by 2030, blockchain will impact global GDP in big ways.

At the same time regulators worldwide are focusing on new legislative solutions to make the financial industry more secure and create legislation for anti-money laundering in regards to blockchain assets. For financial solutions providers, this is the time to explore how services and technologies like this impact their industry and how to work with them in the future.

The Lending industry

At the beginning of the pandemic, many people experienced a financially unstable situation due to loss of employment, furlough or health-related issues. With a continued rise in online services and restrictions easing across the world, there has been an impact on the lending market. For customers, this could involve a shift from desire-focused lending to more needs-focused lending. This shift is associated with a decline in credit card searches and an increase in purchase finance and commercial lending, indicating borrowers are becoming more cautious and selective in their choosing loans and providers.

For traditional and alternative providers, a similar lesson resonates. It is important to consider the changing needs within the consumer market. Whether this translates into creating a smarter, more customer option or transferring to a digital platform, each service will vary. Whichever service you choose, it is essential to find one that works for your clients.

Today, the finance industry is in a transformation stage. Many traditional processes have been proven not to be as efficient or as reliable as previously thought, and the concept of how finance and lending have been changed significantly. The industry is still reshaping for the future and while it still isn’t completely clear what shape the industry will take, it is likely to be focused largely on data, new technology and prioritising the needs of customers.

The role of a CFO has transformed in recent years, going well beyond its conventional function to more of a pivotal role in engaging, communicating and influencing overall value for a business.

Finance professionals today need to be capable of telling their own story, representing themselves as vital decision-makers on specific issues ranging from ESG to how to best leverage Big Data. The role of the finance professional has significantly changed, thanks partly to the automation of many standard tasks and the focus on how the finance role can influence overall business strategy. Finance is far more than just looking at numbers and has a profound impact on key decisions. Gaining support from the business is critical and so is capable of delivering effective stories defining the problem and solutions for improvements are an important element.

Finance teams are often being approached from other sides of the business, such as corporate sustainability to support collaborative teams capable of meeting the ESG demands. In today’s world, we are finally recognising how precious nature is and that our commodities are finite. Focusing on development must be partnered with understanding and measuring what these actions have on protecting our wider and future interest. Finance professionals are well-positioned to manage and provide teams with the information needed on important issues such as ESG.

In today’s data-driven world, many businesses struggle to manage their data and how to use it to make strategic decisions. Increasingly, finance professionals are being asked to collaborate with data scientists and others focusing on extracting insights from big data. There is an emerging trend of finance professionals collaborating with other teams and harnessing their skills in various ways. Finance people can play a pivotal part in the Information Age. They have experience with data and bring with this their advisory knowledge and strategic position to manage these responsibilities.

We are well into the era of big data and in every business and every finance team, people have the opportunity to work with data. Finance professionals have the power to inform, guide and lead their business. Many CFOs will have the responsibility for possibly the majority of data transformations in a business.

In previous years private equity may have held back the financial industry in terms of the uptake of new technology and automation. As more data becomes available, the requirements for reporting and transparency have increased and businesses are continuing to diversify their investment plans, and realising that having strong expertise in analytics is a necessity.

Technology has become such a significant part of every industry, including the finance sector. In regards to the growing role of data and technology, industry specialists have emphasised the shifting position of the chief financial officer (CFO) within private equity firms. Technology and innovation have become critical across the industry in general. The CFO is becoming pivotal, a highly valuable asset within a business is data. This role has more responsibility concerning how to utilise data and apply the benefits to a business.

Portfolio Analytics and technology and key functions CFOs highlighted as required to shift from standard to strategic planning. The EY 2020 survey discovered that 70% intend to increase time spent on portfolio analytics and a further 69% plan to spend more time on technology.
CFOs are leveraging technology to manage routine tasks in their business. In the future, we’re likely to see CFOs continue working strategically, focusing on analysing data across the entire business.

Deal and portfolio executives are becoming increasingly popular so CFOs are taking on more responsibility and moving beyond finance into several new areas, such as data protection, resilience, digital strategy and ESG.

In a report named Delivering Value from Data, data-driven decision making has become a critical element of business as data-focused leaders have displayed the effective use of data to leverage new opportunities, disrupt markets and generate a competitive advantage.
The increase in fund sizes and expansion of portfolios in regards to funding size and location has spurred a need to utilise technology to manage these changes. Companies that can leverage data, utilise predictions and decisions, will be positioned to create a more competitive advantage.

The desire to increase the benefits of technology is also being experienced with institutional investors. As wealth and pension funds get bigger, more complex and competitive, their capacity to use technology is paramount. The availability and quality of data are becoming crucial, assisting funds in making better investment choices in today’s rapidly transforming global market.

Anything that makes funds more efficient at selecting the best investments is a major competitive advantage, and this is where data comes into play. Being agile and responsive is key and being capable of adapting and managing the pace of data demand.

This increase in data, analytics and technology is influencing hiring strategies and developing a finance workforce that includes relevant data analytics and technology skills. The conventional workforce of private equity is accustomed to standard systems like Excel but today employees need training on new tools as the technology landscape continues to transform.

The skill sets needed for the talent pool are much more technology-focused, with higher data analytics experience. CFOs are now focusing on how, in this competitive market, you’re not just competing against other private equity firms, but actually against other industries, like technology. So with this in mind, it’s critical to remain focused on attracting and retaining the best talent. Private equity CFOs recognise the need for them to accelerate the pool of talent within the business, especially as data analytics takes on a more important role in an organisation.

David Alich, director of analytics and technology at PwC recently gave his view on the future in a panel discussion. Alich believes the investment will continue to increase in data and analytics technology solutions. He anticipates that every fund will have its analytics and data experts or data science teams who focus on high-value projects and implementing analytical solutions into portfolio businesses.

CFOs can often take a cautious approach to accept new technologies but data and analytics professionals can support them with really understanding the benefits of implementing these solutions into their business.

According to a study by Gartner, after a significantly disruptive year, CFOs seem to be prepared to invest in projects that enable the implementation of new analytics and automation technologies. There are two key reasons for this transformation:

-Looking specifically at finance, where analytics information on certain metrics is valuable, there is a demand for more innovative analytics to enhance performance.
-RPA technology is an automotive solution that eliminates manual tasks that can’t be integrated. Repetitive tasks can be a problem for finance, where a mix of various systems can be difficult to integrate.

While reports suggest that analytics and services like RPA are regarded as top priorities, there is also a level of the hesitancy of CFOs to invest in these new technologies. In the same survey by Gartner, nearly 80% of CFOs stated that they had some doubt they would reach their goals in advanced analytics and over 50% showed concern with reaching goals by implementing RPA.

These figures are a little concerning for the IT industry. The feelings in the finance department can influence other sections of a business. CFOs also hold a lot of control over which IT projects to implement and what tools to use in a business.

What are the key steps IT leaders can take to ensure that CFOs are supportive of analytics and other innovative digital projects?

Clear project success

Creating short term projects that have clear, achievable goals and returns on investment will demonstrate success and build confidence for the long-term implementation of new services.

Understand strengths and weaknesses of users

In terms of finance, the team require more analytics but it is relatively easy to get overwhelmed with all the information and lose sight of the bigger picture. For example, users can explore financial results, but yet still lack a clear understanding of key elements that influence the bottom line.

The customer service team may utilise analytics to explore which customers are satisfied. This is useful in determining customer attrition and predicting which groups are likely to be long-term customers. Similarly, manufacturing teams can use analytics to understand equipment downtime before it may happen, which maintains productivity and reduce expensive periods of downtime.

There are two examples of how analytics can influence financial health and highlight areas that may be overlooked. If IT teams can utilise these solutions with finance, CFOs would understand the real value and be more likely to accept these projects.

RPA isn’t the only technique available to reduce repetitive work

RPA isn’t the only way of eliminating repetitive work but represent one of the clearest ways for finance to understand the benefits of applying automation to its workload. Automation and eliminating repetitive work can happen in multiple areas of a business by applying automation technologies that differ from RPA.

This is somewhere where IT teams can present clear defined business cases, with an explanation of the technology and the resulting ROI from applying these solutions.

Why is this important?

The ultimate goal is to ensure the CFO is connected with how big data, analytics and automation can be applied in the company to generate better results and revenue. While there is always a level of risk and uncertainty with new projects, having the CFO and other business units in support and invested in the success of the project is a big step in enabling a successful implementation.

Embedded wealth management enables customers to increase their wealth and provide fintech with a new channel to communicate and engage with their customers.

When Uber announced it was introducing a bank back in 2019, the technology and finance industry became very excited. Uber Money provided users access to their earnings in real-time and access to their card. It represented a great opportunity for the strictly regulated finance world. Uber was a blueprint and many other technology companies are exploring the move into financial services. Embedded finance has become a very popular area for both fintech and new investors.

The concept is that technology companies can provide financial services with their standard offering, whether this is payments, lending or insurance. Another embedded financial service is based around wealth management. Challenger banks are showing significant interest in wealth management, providing users with options to invest their money more freely. Challenger banks are taking the lead in providing customers with a simple service and favourable options for saving.

There is a growing need for businesses to engage with their customers in a way that provides value beyond the conventional services, while at the same time offering benefits for the challenger banks. In the previous year, businesses looking to integrate investment features were faced with several barriers to overcome. These challenges reduced the options of wealth management to larger financial institutions. Today’s embedded solutions have made wealth management more widely available.

Wealth management has benefits for both fintech and their customers. Users can increase their wealth through simple investments and this enables fintech with new ways to engage and communicate with their customers. Embedded investments provide a stable way of growing income while providing a genuine reason to communicate with clients.

The outlook for the industry is looking positive. Businesses are experiencing stronger growth and interest in all traditional fintech areas and analysts predict that more customers will actively look for user-friendly services to make their investments.