Even before the global health pandemic struck last year, the finance sector had begun a transformation to become more resilient in the face of rapid economical and societal change. The events of the past two years have accelerated this transformation, and organisations have emerged into a changed global environment many are dubbing ‘the new normal’.
This new normal has arrived with a list of demands that companies cannot ignore if they want to survive and grow in an increasingly competitive market. Here we’ll highlight how some organisations in the finance sector have altered their strategies to adapt to the new normal.
Investing in digital transformation & automation
The marriage of data analysis and automation is the digital strategy many finance institutions are recognising as key to success in the new normal. As companies shift towards more flexible business strategies, an understanding of resource usage and identifying costly practices is crucial to making better financial decisions. Powerful automated data analysis tools can help companies run these audits, either internally or through a third-party specialist, quickly sifting through massive data sets to help provide accurate information projecting the bigger picture.
Most importantly perhaps, is that these automated data analysis programmes draw upon real-time data. An integral consideration of the new normal is that consumer and market demands change rapidly. Agile organisations which can respond quickly to these changes and deliver continuous value are winning in the new normal. Automation is the technological foundation upon which ambitious companies can become agile.
Case study: Oracle’s vision for financial automation
The Finance Continuum is a model being developed by tech giant Oracle that allows companies to evaluate their current position and work towards more efficient technological capability. Organisations can analyse a range of data points (such as social media info and world economic indicators) and develop actionable insights to inform their decisions. In the context of the global health pandemic and the new normal, such digital transformations could help predict disruptions and provide leaders with the insights needed to adapt to future crisis.
Christina Kite, Vice President of Global Business Strategy and Analytics at Oracle said ‘’The use of AI, machine learning and other technologies help enable what we call touchless transactions. When less time is being spent in the accounting area, more time can be spent on forecasting and being that scout for the business.”
Automation has already demonstrated its worth in the finance sector and will continue to take centre stage in the new normal. A McKinsey 2018 CFO survey highlighted that a large swathe of financial tasks are automatable and should empower employees with more time to focus on high-value work and less predictive tasks. With powerful digital tools, they’ll be able to focus on activities that rely on interpersonal relationships, such as strategic financial planning and business development.
In the new normal, businesses should construct agile teams of problem-solvers who can work across the organisation. This allows the company to share and allocate resources according to shifting market demands, which as we know in the new normal shifts rapidly and often unpredictably. Therefore, those problem-solving, analytical and strategic skill sets are the most critical to get instilled in your employees. This may mean reskilling in some areas and in other cases will help companies reimagine their recruitment strategies to focus on talent with these skills in mind. With automation driving these changes, it will allow companies to re-imagine their business models in the new normal, and aspire for a more resilient, flexible operation.
Reevaluating financial models
In the new normal, many organisations are facing the prospect of rethinking their financial operations. As the last two years has shown, the unpredictability and changing demands of the market require a more flexible set up that don’t see such crisis as the health pandemic as a potential knockout blow. Focusing more on longer-term investments and opportunities for growth will take precedence over short-term cost reductions. Finding this balance between short and long-term opportunities is becoming a strategy to mitigate potential future risks and develop mid-range financial goals that explore a range of finance seeking opportunities. As a Forbes article recently declared, ‘’Cash is king’’. That unknown horizon the new normal places us upon means it would be wise for businesses to conserve as much cash as they can whilst also exploring new loan opportunities or lines of credit, shoring up liquidity.
Whilst the new normal is a rapid departure from the old economic environment many financial organisations thrived in, it presents exciting opportunities for those willing to reposition their strategies. Accessing real-time data through powerful technological tools can provide them with the foundation they need to evolve their business models, become more agile, and respond to events as they happen rather than when it’s too late.