How banks can modernize finance to accelerate growth

CFOs in the banking industry are living through some of the most challenging times in their careers. The pressures they’re facing are all too familiar: volatile markets, squeezed profit margins, aging technology platforms, and complex and shifting regulations. Add to that the disruptions of the global pandemic, which has accelerated the consumer’s desire for digital banking channels, putting pressure on financial institutions to quickly move to a digital-first model.

Among our banking clients, we see CFOs confronting these challenges every day. Top of mind for them are rigid legacy technology platforms and outdated business processes that can’t keep up with advances in the industry. Most are seeking to modernize their Finance systems by moving to new Cloud platforms that automate manual efforts for sourcing and reconciling data—and that provide forward-looking insights to uncover new business opportunities. What’s more, the costs of staying on-premise have ballooned from half a percent of revenues to four or five times that for some companies, and boards and audit committees have taken notice.

Some banks remain hesitant about moving to the Cloud—worried about the risk and difficulty of integrating and securing their complex data networks in the Cloud. Others are quickly dispelling these doubts and embracing the advantages of Finance Modernization in the Cloud. They’re realizing that many of their legacy platforms won't be supported by technology vendors in the future.  By moving to the Cloud, they’ll benefit from built-in application updates to keep them current with changing regulations, while adopting ongoing innovations to drive business growth and reduce the cost of Finance.

For example, we’re working with one bank that had been running on a 30-year-old Finance system and is now moving to a new platform on Oracle Cloud. They’re in the process of modernizing every aspect of their Finance operations—from their accounting structure to risk to regulatory compliance—and laying the groundwork for becoming a truly global bank.

Unlocking data to power a more agile bank

These days, CFOs are paying more attention to how they can unlock the power of their data to improve forecasting, planning, and budgeting. Leveraging the newest Cloud platforms, CFOs can quickly deploy financial and operational data throughout the enterprise, moving it downstream into the business or upstream into the hands of the CEO and the rest of the C-suite. Meanwhile, technologies like artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) are transforming how Finance organizations use data, allowing Finance to accelerate the pace of change and move from managing transactional processes to providing actionable insights.

Cloud technologies are giving forward-looking CFOs and their Finance teams the power to become more agile and operate faster. Unified on a single platform, teams can move funds around the organization more strategically and invest capital in the right place at the right time. They can know on a daily basis what their cash position is, the status of their balance sheet, and the health of their bottom line. They're closing their monthly books in three or four days instead of 10 or 12.

The upskilling imperative

Finance organizations are also modernizing their underlying business processes as new Cloud platforms help organizations standardize, simplify, and streamline core routines. By automating control processes, for example, organizations can avert audit missteps that are often a by-product of complex, manually intensive operations.

The move to Cloud architecture can transform the traditional skillset of Finance professionals. Upskilling these resources has been long overdue—especially at larger financial institutions where, for too long, teams have been bogged down by manual routines that could be automated with exponential technologies such as chat bots, voice integration, and RPA.

These changes will require a completely new set of competencies. Instead of doing manual journal entries and repetitive transaction processing, more employees are learning to become financial analysts and planners tasked with interpreting data, identifying trends, and sharing insights with the business.

Making the journey to a strategic Finance organization

How do you convince bank CFOs to make the journey to Modernize Finance? Standardizing your core processes is a good start, giving you the ability to add a portfolio of Cloud solutions. You can now prioritize opportunities for Finance to contribute to the bank’s bottom line and incrementally deploy solution components, which extend data access, continuously enhance reporting, and streamline processes.

Deloitte helps banks accelerate Finance Modernization onto Cloud with capabilities like pre-configured solutions and tools, like Deloitte Ascend™ that can dramatically lower the risk of moving to an industry standard platform. Our agile methodologies, Momentum™, have compressed timelines to the point where implementations that used to take 3-4 years are now taking 1-2 years to complete, with quick wins in less than one year.

For forward-looking CFOs, everything is changing. Ten years ago, they spent most of their time producing financial statements and working to stay in compliance. Today, that’s just a baseline, the entry point into the role. Now CFOs must step into a bigger job—a true business partner tasked with a broader mission: evolving operations to lead strategic growth.

Learn more about how the Oracle Finance Modernization for Banking solution and Deloitte are helping bank CFOs evolve finance operations to lead strategic growth.