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CEOs of financial institutions expect more from their finance function, is the CFO ready to deliver?

EPM helps financial services CFOs meet new expectations

Enterprise performance management can help CFOs meet higher demands upon finance department as a key business partner.


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“By combining financial data and operational and customer data through EPM  software, CFOs can take a leading role in business trategy planning and  execution.”

The finance function within financial institutions has seen dramatic change in the last decade. Not only are bank and insurance chief financial officers (CFOs) faced with new accounting standards, capital rules and reporting requirements, they must also support the organization and its business strategy. 

Enterprise Performance Management (EPM) can boost the value delivered by the CFO role and finance department effectiveness.

Mixed perceptions of CFO value

Indeed, chief executive officers (CEOs) have high expectations of their CFOs, as indicated by a recent global survey of more than 370 CEOs commissioned by KPMG International. The study showed that 67 percent of financial services respondents said they expect the CFO role to increase in significance over the next five years.  

However, the survey also found that just 53 percent of financial services CEOs thought their CFO was viewed as a valuable business partner by the business. Just 19 percent thought that their CFO was currently playing a critical role in supporting the CEO and the board. 

EPM combines finance, operations and customer data

Not surprisingly, CFOs at the top global banks and insurers are starting to focus on developing and improving their EPM capabilities. They realize that, by combining financial data with operational and customer data through the latest integrated EPM technology, CFOs can take a lead role in helping to dynamically manage business strategy planning and execution.

EPM delivers benefits across the organization:

  • at the finance level, it enables finance functions to optimize their finance operations and dynamically generate more value-adding reports
  • it can improve the speed, relevance and access to the type of performance reporting and analysis that creates real business insights 
  • it can help create better alignment between the organization’s diverse back-office functions to drive better end-to-end decision making based on a single set of balanced KPIs.

In addition, EPM can allow the finance function to become a more strategic business partner. This can be achieved by driving valuable, forward-looking analysis and planning through the EPM’s integrated business and financial planning features. 

This forward-looking EPM feature is especially important for financial institutions, as new accounting standards like IFRS9 for financial instruments and IFRS4 Phase 2 for insurance contracts (both life and non-life) forces them to disclose fair market values and net present value (NPV) calculations on their financial assets and liabilities. 

CFOs seeing EPM as mandatory

Perhaps most importantly, a strong EPM capability can enable management to make better business decisions. It can help improve speed and access to information. Leveraging new EPM technology (such as those on offer at the KPMG Data Observatory), can deliver improved visualization and analytics capabilities, leading to competitive insights. And it can ensure that everyone gets consistent data from the same source, improving decision-making confidence. 

The value of EPM was validated further by the KPMG survey, which asked CEOs of large financial institutions what their CFO could do to deliver more value. The three top initiatives included:

  • applying financial data analysis to help the organization achieve profitable growth
  • using financial data analysis to create and implement new operating models
  • finding ways to turn the regulatory environment into a competitive advantage. Since improved EPM can achieve each of these three goals, EPM is quickly becoming a mandatory capability for finance functions in the financial services industry. 

EPM is more than a reporting tool

Although EPM is often described as reporting software bolted onto existing systems, its real value comes only when the finance function starts to turn that data into real, reliable and actionable insights. That requires a holistic approach to EPM that spans the enterprise and the whole operating lifecycle.

To start, organizations may want to consider flipping the historical ‘plan-do-check-act’ approach on its head when creating a robust and appropriate EPM program. Instead, the finance functions could start with the ‘act’ (i.e. what insights does the business need to act), and then ‘check’ what information is required and whether, before moving onto the ‘do’ of building the solution. Once EPM programs are in full swing, finance functions can return to the traditional, continuous ‘plan-do-check-act’ lifecycle process and culture. 

By focusing on creating a holistic EPM model and approach, CFOs can drive real value from their finance function, enabling them to meet the evolving, sophisticated demands of their organization.



1The View from the Top, KPMG International

© 2019 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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