Digitisation is a major driving force for change in finance departments, transforming financial processing and altering the role of finance professionals. Companies are digitising their financial and administrative processes. Almost half of those surveyed in the Onguard FinTech Barometer are developing innovative financial software or seeking to partner with innovative FinTech businesses. Finance professionals are increasingly recognising the need to acquire or improve their existing computer and analytical skills to keep up with the radical changes triggered by digital technology. In this blog, Marieke Saeij, CTO at Onguard, looks at three reasons why all finance professionals need to get to grips with big data.
1. Data is the oil of the 21st century
The emergence of big data is an important development that finance departments cannot afford to ignore. Peter Sondergaard, Head of Research at Gartner, has described data as ‘the oil of the 21st century’ and analytics as ‘the combustion engine of business’. In the 20th century, oil accelerated technological breakthroughs and fuelled economic growth. Data is expected to do the same in this century. We now have data on everything, data that can be combined to yield valuable insights – especiallyfor finance departments. However, while as many as 45% of finance professionals see big data as the most influential trend in the industry, many finance departments have yet to harness its potential. The task of integrating big data is generally assigned to the IT department, while the finance department looks on from the sidelines. This is something that needs to change, sooner rather than later.
2. Data forms the basis for sound decision making
When we hear the term ‘big data’, we tend to assume that only big companies have the resources to properly take advantage of its benefits. Yet nothing could be further from the truth. Small businesses can also use big data to their advantage – especially when it comes to decision making. For example, big data can enable finance departments to more accurately assess business risks. Real-time reports provide a faster and clearer insight into the company’s financial position. Finance professionals can also use big data to determine whether to provide credit or insurance or accept a new client. Big data provides much more information about the person applying for credit than the current postcode-based system. It can help finance professionals assess customer creditworthiness and make smart business decisions based on facts.
3. The role of the finance professional is becoming more challenging
And, lastly, the role of the finance professional is changing. With the advent of digitisation and big data, routine tasks are completed by computers. This results in a shift in focus from operational to strategic. Finance professionals will find that their role is becoming more challenging and they would be wise to equip themselves accordingly. This is confirmed by our FinTech Barometer survey as 30% of finance professionals feel it is important to develop analytical skills so they can translate analyses into actionable business insights. Finance will occupy a different position within the organisation, between data analysts and management. Finance professionals will be required to translate the input from the analysts into information the management can base sound decisions on.
The world of big data has yet to really be efficiently utilised by finance professionals. To navigate the rapidly changing landscape, they need to be in the driving seat. It is essential for both finance departments and finance professionals to embrace big data and harness its power to their advantage.