CFO increasingly acting at the heart of the business

CFOs, besides being co-pilots alongside the CEO, are increasingly the spider in the web for the entire company. Increasingly, they help decide on direction and strategy. They are also bridge-builders towards the departments. The rise of CFOs is only reinforced as they start combining their tried-and-tested approach to financial management with artificial intelligence (AI).

The function of the CFO has broadened considerably over the past decades. This has everything to do with the business environment, which has become more complex on numerous fronts. From globalisation, digitalisation to increasing regulation. From ESG and compliance to increasing fraud threats. With their financial expertise and analytical skills, it is the CFO who navigates the company through this complexity. Internally, they provide colleagues from all kinds of departments with financial steering information to measure and improve their own performance.

Developments in the finance department are usually gradual. That is different with the introduction of (AI). Not that everyone is suddenly using it in mass, but development is moving fast. In particular, the effects can be profound along the way.

AI is currently the magic word floating around everywhere. Every company wants and needs it. But what about in practice? What is actually happening with AI in the finance department? Recent research (e.g. Deloitte) shows that a start has been made, but that many companies are still searching. The potential of Al is endorsed by almost everyone, and certainly also by CFOs. A large majority see the importance and also want to invest in AI. Although there are also inhibitions. A striking number of CFOs call their own company still digitally immature. And cyber fraud is also regularly mentioned as a risk and point of attention.  

Those reservations will soon disappear. Almost sixty per cent of CFOs foresee a strong advance of AI in their own decision-making processes in the coming years. Marcel Pheijffer, professor Nyenrode Business University and Leiden University on the attitude of CFOs. "On the one hand they are favourable, on the other they remain cautious. The CFO is not the type to immediately run after new trends. Risk management is too much embedded in their DNA for that.  Of course, AI offers great opportunities, but how are you going to apply it in your company? For many, it is still a black box. Only when you have a better grasp of it can you put your trust in it."

This reluctance on the part of the CFO is understandable, according to Pheijffer. "AI also requires reflection. What data do you put into the AI tool and what is the quality of that data? The input determines the quality of the output. The integrity of the data must be properly assessed. A thorough evaluation should be the first step. AI analysis must also be reliable. Are the algorithms on which calculations are based correct? All that has to be in order before you start it. I see a connection in this between careful handling of Excel spreadsheets, in which all these issues are also relevant, and AI applications."

"Furthermore, professionals need to ask themselves whether AI delivers what you need. Do the results match your own expectations and insights? CFOs need to recognise themselves in the outcomes of the AI process. If that recognition is not there then you shouldn't take it for granted. You have to trust it. You will always have to use your own experience and expertise, your professional judgement, before working with results of AI analyses."