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Risky Business: Trend of expanding strategic role of Financial Leaders increases scope for mistakes

Risky Business: Trend of expanding strategic role of Financial Leaders increases scope for mistakes
  • In a recent survey, 97% of UK Financial Leaders say their role has changed over the last three years
  • Seventy-one percent of respondents believe finance teams under too much pressure to be business protector and growth driver
  • Over half of respondents (56%) feel board expectations are unrealistic, with 53% admitting reduced resources increase the risk of serious mistakes
  • Fifty-nine percent of respondents say their role includes more risk and compliance responsibilities and increased focus on revenue-generating activity

An independent study commissioned by Dun & Bradstreet has shone a light on the complexities of the modern Financial Leader role – highlighting a community under intense pressure to balance traditional accounting tasks with more strategic revenue-generating activities.

Of the 200 UK Financial Leaders surveyed, almost three-quarters (71%) believe finance teams are under too much pressure to be business protector and growth driver and 56% believe their board has unrealistic expectations.

Exploring the evolving nature of their role, almost all (97%) financial leaders surveyed say their responsibilities have changed over the last three years. Most pointed to a growing emphasis on strategic responsibility, with 59% revealing their job now includes more risk and compliance responsibilities.

Dun & Bradstreet’s Tim Vine, head of Trade Credit for UK & Ireland, explains, “The role of the financial decision maker has transformed over the last few years and, while many (74%) financial leaders feel this has been a positive shift overall, it’s still a major challenge. Suddenly, teams who have reduced in size now have to manage a complex dual role – business gatekeeper and revenue creator.”

Yet despite their expanding role, 60% of respondents say their team has decreased in size over the last three years. As a result, 53% admit reduced resources increase the risk of serious mistakes being made. Almost two-thirds of respondents (59%) suggest their organisation sometimes rushes through the compliance process to support revenue-generating activity and 55% reveal they feel uncomfortable with the extent to which their business sometimes gambles on risk management.

To meet the expectations of their businesses and fulfil their roles effectively, the majority of respondents (45%) believe data is “extremely important” to make smart decisions and forecasts. The biggest data benefit cited by 43%: helping collate customer intelligence. However, 57% of financial leaders admit their business lacks the ability to access accurate and current data. The biggest barriers respondents see are: a lack of skills (23%), lack of investment in technology (21%) and inaccurate data (20%). As a result, almost two-thirds (65%) admit it’s difficult to find and capitalise on strategic opportunities.

“The UK’s financial leaders know how powerful data analysis and smart use of technology can be in helping them meet business expectations in their new joint role as business guardian and revenue driver,” continues Vine. “Despite the challenges they clearly face, these two roles are not opposites. Protection and growth can go hand-in-hand, but only when they are underpinned and supported by the resource, tools and data to allow for smarter decisions that will grow the business. If financial leaders are to fulfil this duel objective, they must gain support for the data and analytical capabilities needed to empower their insight.”

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