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Banking Newsletter - March/April 2014

This edition covers local and global regulatory developments, using social media for customer engagement and the latest in real time payments.

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Banking Newsletter – March/April 2014

Inside the intelligent finance function 

Today, more than ever, finance functions are being asked to deliver increasing amounts of added value that not only enable business decision support activities but improve the organisation’s bottom line. In addition, the expectation is that this should be achieved at a lower cost.

For any chief financial officer (CFO), this places additional pressure to constantly improve their organisation’s finance functions.

 

Such improvements come from creating efficiencies that not only deliver ‘more from less’ but that support and enable higher-value business decision support activities.


This also includes transforming finance professionals into being more forward-thinking analysts and trusted advisors to all decision-makers.

 

However, as KPMG’s latest Global CFO research reveals, this is exactly what high-performing organisations are aspiring to.

 

Global moves driving local change

The survey’s findings, included in the Being the best: Inside the intelligent finance function publication, highlight what companies are focusing on (and need to consider) to achieve the implementation of intelligent finance operating models.

 

The survey presents some interesting findings on finance functions:

  • 64 per cent of senior finance executives in the Asia Pacific (ASPAC) financial services (FS) sector recognise the importance of improving the effectiveness and efficiency of the finance function (creating a lean finance function) and consider talented staff as the most important enabler to achieve this.
  • High performing FS organisations recognise the importance of excelling in talent management more than average performing FS companies. However, within ASPAC, planning, budgeting and forecasting processes continues to be seen as the most difficult areas to improve.
  • FS organisations have only centralised 38 percent of their transaction processing activity (compared to other sectors at 47 percent). FS organisations in ASPAC recognise the need for dramatic change in their key finance processes.

 

Embracing innovation

By driving structural improvements, intelligent finance functions embrace innovative finance operating models to help improve the 'added value' of their finance function, empower finance staff, transform data into intelligence and enable the leveraging of latest information technology developments.


And as the survey reveals, many high-performing organisations are working to establish this within their business.

 

However, to support such an intelligent finance function, the FS sector needs to focus on:

 

  • a more strategic (whole organisation) approach to talent management
  • adopting a lean finance approach (i.e. optimising operations by removing costs and inefficiencies)
  • developing and implementing an effective shared services model (moving, for example, transaction processing activities to centralised shared services facilities)
  • deploying innovative data analytics tools and techniques (that better services their stakeholders’ needs by providing insightful financial management information)
  • aligning their rinance and risk functions.

 

From this, FS organisations can focus on what they need to do to successfully transform their finance function. To achieve this they must lead with a clear ‘tone from the top’ and effectively manage talent, change challenges, and the project’s ‘brand’.Clear objectives and mandate must be established, a transparent governance framework developed, partner engagement promoted across the business, and realistic goals and timelines set.

 

Such a company-wide transformation will combine technological and finance skills to help finance functions become more efficient and cost-effective, enabling them to deliver valuable business intelligence.

 

“Lean finance can dramatically boost speed, flexibility and quality across the finance function and enable finance teams to deliver services of greater range and value. High performance finance functions are twice as likely to put great importance on adopting lean finance principles...” – CFO feedback.

Randy Wong

Director, Business Performance Services

+61 2 9335 8046

randywong@kpmg.com.au

Allan Grant-Smith

Associate Director, Business Performance Services

+61 2 9455 9146

agrantsmith@kpmg.com.au

Mark Tucker

Partner, Business Performance Services

+61 3 9838 4086

mtucker@kpmg.com.au

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"While talent management is difficult to master, this is the most important factor to the value-adding success and sustainable competitiveness of the finance function. Talent management is the top priority for investment for the next 2 years.” – CFO feedback.