What Happened to the CEO in Waiting?

The Chief Financial Officer is a powerful figure in any organisation, especially a bank. Not only are they one of the recognised ‘faces ‘of the organisation for shareholders and regulators but their fiduciary duties are crucial to ongoing operations. As a result, for decades the bank’s CFO was the CEO’s effective number two and often CEO designate. But this has changed in recent years. Since the 2008 financial crisis their role has turned inward, and they have lost influence.  What role should they play in the Bank of the Future, and can data be their saviour?

With the huge scrutiny and increase in regulation that the 2008 crisis precipitated, the CFO’s role was kidnapped by the demands of cost cutting and regulation. Strategic planning, vision and innovation were squashed by the weight of compliance.  Attributes that had previously bolstered the CFO’s position have become millstones dragging them down: detailed, after-the-fact reporting, established routines and process and avoidance of risk now occupy the majority of their time.

Yes, the CFO still briefs the City, and externally is seen at the CEOs right hand. But internally they have become synonymous with reporting and cost savings. These are vital aspects of the role. Banks still need to cut costs and make processes more efficient and the CFO’s strategic leadership here is crucial. But the key word is strategic. Decades of finance transformation projects have squeezed costs but have not delivered the step-change needed to break the grip of legacy processes and structure. Simplification, streamlining and de-duplication efforts all help, but real innovation is needed to make a difference. A radical reassessment of the role of data can deliver necessary transformation and catalyse a resurgence in the power and reputation of the CFO role at the heart of the Bank of the Future.

Data is fast becoming the most important asset a bank possesses. In a digital bank it could well be the only asset! Whilst it can be difficult to agree on a value for data as an asset that does not appear on the balance sheet, the CFO is perfectly positioned to embrace data to drive change across their department and the whole bank. Understanding, leveraging and operationalising the value of data as the foundation of the Bank of the Future is a role for which the CFO is uniquely qualified.

There has been a vacuum at the heart of data strategy in banks – few wanted to take responsibility for the data asset. Without leadership, fear and doubt can be significant barriers to its successful operationalisation. Different divisions, teams and individuals can be jealous of their own data, and fearful about letting other have access, or of themselves accessing data that they do not own. A bank-wide point of view and clear governance on how and where data is used, are crucial.

By stepping into this role and taking ownership of data across the bank the CFO can not only drive progress toward the bank of the future, but also reinvigorate their own role and standing in the organisation. CFOs know all about governance, data integrity and reporting. Few others have the bank-wide authority and oversight to integrate data into the everyday decision-making across the business. They can connect data to the business – highlighting what is available and establishing governance and reporting requirements that set firm foundations for transformation.

The CFO has the potential to use data to quickly improve processes and productivity in their own teams and set the standard across the bank. Data centric CFOs can radically and rapidly transform the work they do as I’ll demonstrate in the next blog.