The future of finance is increasingly moving toward a self-service model. However, along with the innovations associated with self-service finance come sensitive security issues. How does the CFO find the right balance between innovation and risks? On Financial Excellence with Game Changers, a program presented by SAP on The Voice America Business Channel, three experts discussed the possibilities and where the lines should be drawn on this sensitive issue.
The program was moderated by Bonnie D. Graham, with a panel comprising David Axson, managing director at Accenture Strategy and lead, Global CFO Strategies Practice; Bo Lykkegaard, associate VP for the Software Tracker, Public Cloud Services Tracker, and European Enterprise Applications Research at IDC; and Birgit Starmanns, senior director for Product Marketing, SAP S/4HANA and SAP Fiori, at SAP. The following is an excerpt from the Feb. 2 episode.
Bonnie: Bo, you say fraud prevention is becoming more difficult, maybe nearly impossible, but that finance can prevent fraud in a fast Web-based self-service world. These are fighting words, Bo. This is saying, yes, we can do the impossible.
Bo: It’s a new world – self-service finance. There are going to be other stakeholders involved, needing access to systems, and even auditors coming online. So that’s a lot of people, a lot of self- service, a lot of access. How are you going to control all of that?
I think what is needed is a mindset change. You can’t prevent fraud with such an open system. But what you can do is use these new technologies to do controls and checks in real time and let the systems deal with themselves. I think that’s the future of fraud prevention and risk mitigation: to have the systems do those checks themselves. So it’s not being able to prevent, but to be able react very quickly and build resilience into these financial systems.
Birgit: I completely agree with Bo. Just to be clear, though, we’re not trying to automate to the point where systems make decisions for us. Systems can recommend a couple of options based on certain parameters, but it’s still going to be humans making decisions based on that information. Finance still has to make the final call.
If finance were to evaluate all of this data manually, they would never have time to do anything else because of the sheer volume. If we can automate that analysis process and then present the results to finance, that would save a lot of time and effort. Finance can then use this information to make better decisions. The more quickly we make that information available to finance and the rest of the organization, the more informed the decision can be.
David: I think the security element is fascinating. It’s changing the whole security-control mindset that finance needs to be aware of. Traditionally, we build a lot of checks and balances in the form of detective controls – a three-way match in the accounts payable process, bank account reconciliations, and so on. They’re all post-event controls. The speed of the transaction flow in the digital world doesn’t allow you the luxury of time, so you need to build preventative controls that are not intrusive to the transaction execution.
I’ll tell you a real story that blew me away not too long ago. I was in South Africa over the summer. My wife and I landed at Johannesburg Airport and we bought two tickets for the trains to take us into the city center.
Less than 45 seconds after I bought four $40 train tickets in the airport, my bank called me to verify that this was not a fraudulent transaction. They also informed me that they were setting up credit checks on my account and monitoring transaction flow because there was a history of credit information being stolen from that particular location in the airport. They were protecting me, delivering great customer service without impeding my transaction flow.
Not too long later, my mobile company sent me a text message that identified that I was now in South Africa, and that they were retroactively changing my billing plan so I don’t incur excessive charges. These are examples of digital technologies dramatically enhancing customer service while at the same time also improving risk management. This has financial value to an organization. I’m seeing CFOs looking at how they can build those types of capabilities in their ordinance of cash and procurement of paid processes. It’s going to be truly revolutionary.
Birgit: Looking at risk management, which goes back to the fraud management topic that Bo brought up, I think finance has made leaps and bounds in just a short two or three years. CFOs are definitely becoming more comfortable with the technology, working more closely with the business, and understanding that they need to change the way they work to continue to grow.
David: I think that’s a very powerful point, Birgit. Bo made a comment earlier about self-service. Self-service allows more immediacy and more on-demand data. What finance then has to add is the analytic capability to support that.
I have a very simple definition of how finance delivers value. It’s the ability to consistently answer these three questions: What’s happening? Why is it happening? And of course, what should we do about it? Historically, we’ve done a very good job of the first one. The other two, not so much. We don’t really understand what’s driving the volume, rate, and mix variance.
The mantra I communicate to my client team today is that our job as finance professionals starts when we deliver the report and ends when we deliver the analysis. This is because the reporting and analysis that finance delivers is only as good as the decisions that result from it. That’s another mindset change.
We typically think when we hit “send” to deliver the report, our job is done. This isn’t the case. Finance, being a business partner, means that our job starts, not ends, when you hit send.
Birgit: I’m seeing this turning into something more fluid, looking at more matrix types of organizations and wearing additional hats, where finance is expanding and not just doing the reporting.
Finance won’t just be doing the planning anymore, but will also be getting involved in some of the strategic directions. I think digital’s definitely going to change the way we operate.
Something that I was thinking about a little earlier in the show – your mobile carrier or credit card company knowing where you’re located. I think we need to walk that fine line of providing that customer service that David was talking about, and that self-service that Bo was mentioning while still making sure that we maintain privacy, especially if we’re dealing with consumers.
We need to maintain the ability to look at information, provide that customer service, and make the right decisions. However, at the same time, we want to make sure that we maintain that integrity, maintain that privacy for somebody that might not want to reveal where their location is right now. Financial information is always extremely sensitive. Finance is going to be at the forefront of determining what that’s going to look like in the future.
This excerpt from “Financial Excellence with Game Changers” on the Voice America talk radio network was adapted for the Digitalist Magazine. Topics in this series:
- How will your organization cope with the transformation of finance?
- How can CFOs drive growth in a volatile, global, digital marketplace while helping to ensure compliance and delivering more enterprise value?
For more insight on this topic, please read the latest Accenture research, Finance 2020-Death by Digital and Architecting the high velocity finance organization.
To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, review the finance content hub, which offers additional research and valuable insights.