The Impact of Digital Transformation in the Finance Sector
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The Impact of Digital Transformation in the Finance Sector

By CIOReview | Monday, May 17, 2021

 The digital transformation of a finance department will create a world where the lines between the finance discipline and other functions like leadership, supply chain and HR are increasingly blurred.

FREMONT, CA: People are currently in the process of a digital revolution. From remote telemedicine to blockchain apps that restrain blood diamond smugglers and artificial intelligence (AI) that confirms the quality of high-grade tuna, technology is beginning to transform nearly every aspect of human life. Globally, digital transformation is influencing every vertical and market.

While several industries transformed faster than others, every change followed an inflexion point in which the technologies necessary to significant power transformation reached a level of maturity and availability that allowed for transition. Businesses that can adopt these technologies and efficiently use them to drive operational and digital changes will gain a significant competitive advantage.

The technologies required to recreate finance are already available, and they will only improve. Finance companies can learn a great deal from other business functions. Modern factories show what automation is capable of. Smart contracts enable them to monitor assets in novel ways. It is not necessary to reinvent the wheel, but they can concentrate on adapting and adopting.

Increased automation

Automation is the technological trend shaping up to define the century, from manufacturing to supply chain and logistics operations. Robotic process automation (RPA) can redesign the function of the finance professional while dramatically raising the potential for value creation throughout businesses in the finance sector.

This technology is most visible in the form of a concept known as "co-bots." Instead of eliminating humans from the equation, the objective of a co-bot deployment is to enhance that worker's capacities through repetitive task automation, superior analysis, and workflow management.

Powerful analytics

The development and evolving nature of analytics is a technological trend that has remained deeply connected with the increase in automation deployments across the sector. The capability of finance departments to redirect their efforts away from back-office reporting and toward forecasting and predictive analysis has a significant impact on industries such as insurance and investment.

The ability of data analytics to harness and draw insights from a wide range of data (that humans cannot manually evaluate) is a massive success for the industry.

The era of the digital CFO

As digital transformation affects every aspect of a company's operations, the demand for digitally forward-thinking executives increases beyond the CTO, CSO, and other traditionally tech-focused positions.

Being a tech-savvy leader is no longer enough for the modern CFO. the most successful executives in this field must be the driving force of cultural and digital transformation across not only their finance departments but also the entire organization.