Risk Management

CFOs are pursuing both growth and risk management in 2023

Top finance performers use advanced analytics to stand out.
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CFOs are balancing growth with caution in 2023, the McKinsey Global Survey on the role of the CFO finds. Managing financial risk was the area the greatest percentage of respondents (38%) said they spent most time on in the past year. But it was closely followed by identifying opportunities for growth (29%), building finance capabilities (27%), and managing costs and productivity (27%).

In the year ahead, the highest percentage of CFOs (55%) said that business building was the strategy they most expected their companies to pursue.

Though the cost of capital is high, the survey reveals “an increasing risk appetite, with many CFOs actively steering their boards toward bold M&A and business-building endeavors,” McKinsey partner Christian Grube commented.

That’s in line with last month’s PwC Pulse Survey, which revealed that executives are less fearful of a recession and are pursuing new technologies and revenue streams.

Tech transformation continues: CFOs are adopting technology at a rapid pace, the McKinsey survey found. “Two-thirds of respondents say that more than a quarter of finance-related processes have been digitized or automated," according to McKinsey.

Respondents who said they worked for top-performing companies were far more likely to have adopted certain technologies than those who didn’t. 60% of top performing organizations used advanced analytics in finance, versus 37% of other organizations. 36% of top performers used robotic process automation (RPA) to automate repetitive tasks, compared with 26% of other businesses.

“To differentiate their finance organizations, CFOs should take the next step and embed advanced analytics to make use of their organizations’ data—the vast majority of which typically goes unused,” McKinsey partner Ankur Agrawal said in the report.

But AI has yet to become mainstream in the finance function: Only 25% of [CFOs/execs] from top-performing companies and 19% of respondents from other organizations said they used it.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.