How is the Role of a CFO Changing in FinTech?

Advances in technology are drastically changing the world we live in. Today, the thought of purchasing something online and having it show up at home in a couple of days is hardly pondered — it’s normal. We have come to expect that spending money online is reliable and makes our lives easier. 

However, some of the biggest technology changes in our lives have to do with a lot more money than a simple online clothing purchase. In fact, the world of finance has been one of the most impacted industries of them all. Demand for online solutions has almost singlehandedly created the financial tech or the fintech industry. These advances change the way we manage funding, the way companies keep money secure, and the way operations work within a company. 

Today, the role of a chief financial officer (CFO) is far different than what it traditionally was. Even 5-10 years ago, the goals and objectives of the position were different. This means that many new company leaders are learning some traditional skills but many new skills to help them meet the challenges of a rapidly changing industry.  

Industry Standards

Becoming a company’s CFO is a pretty big deal. It is a position with substantial responsibilities and requires several years of experience. Depending upon the size of the company, the CFO could be responsible for managing hundreds of lower-level employees and making financial decisions that impact large markets or they could be acting as CFO and providing big picture financial advice for multiple small businesses

Typically, a CFO is responsible for numerous operations including:

  • Controllership — processing, presenting, and reporting historical financial information that can be used by company stakeholders to make important financial decisions.
  • Funds Management — overseeing financial conditions of a company including debt-equity ratios and investment strategies for company funds.
  • Financial Forecasting — mapping out the company’s financial future and examining economic outlooks to adapt to predicted market changes in a timely manner.
  • Regulatory Reporting — evaluating financial rules and regulations to keep the company within legal boundaries for financial investing and management.

With all of this responsibility, CFOs are typically considered one of the most valuable positions in the C-suite. As such, they are typically well compensated even at smaller companies. With a growing need to be involved in the technological advancements of financial companies, it is anticipated that CFO salaries and benefits will only continue to increase. 

Big Waves

Many companies — even those outside of the finance industry — are driving change in fintech. For instance, most businesses now offer digital payments, online transfers, mobile banking, and other services that require some level of digital financial input. The global market for financial technology is expected to be valued at over $300 billion by 2030

Even now, new technologies are constantly pushing the boundaries and requiring almost constant adaptation to keep up. For instance, things like fintech mobile app development are adding greater twists to an already adjusting financial world. Consumers want ease and accessibility, but developers also have to consider financial security, design, and overall performance. It is a lot to think about. 

Financial systems — and CFOs — are also now able to analyze more data than ever previously thought possible. Fintech software can help track human demographics such as age, spending habits, and financial risk tolerance to better assess how consumers or stakeholders might react to certain adjustments. All of this can add up to a huge amount of data to process and more informed management decisions than ever before. 

New Roles

All of these changes add a lot more to the already full plate of the CFO. Now, beyond just determining the financial outlook and managing money for the company, the CFO can play a big role as a change driver. Some industry leaders already see themselves in this role — driving their company forward into a world of technology. Many are working to encourage business leaders to adopt new tech early to stay ahead of the competition. 

Some CFOs are also seeing themselves in a bigger tech leadership role. For instance, some may be directly in charge of determining who has the security clearance to work from home or whether or not it is financially beneficial for the company to switch to a remote work model altogether. Determining who is responsible for remote work and associated expenses can be a little convoluted, but if it impacts company finances, you can bet the CFO is at least somewhat involved. 

Overall, many of the core duties of a CFO remain the same. They are still responsible for the financial security and future of the company. However, their role is expanding sharply with the many fintech advances that we are seeing today. Many are taking on roles as technological leaders and change drivers that help to propel the company forward and ensure that profits remain as high as ever. It is a weird world we live in, but one we’re striving to adapt to the best we can.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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