Chief Executive Insights

The four new roles of finance in a disruptive world

The arrival of COVID-19 and its impact on global economy and business is certainly the most disruptive event the world of modern finance has seen. Today, more than ever, companies are faced with deep challenges relating to access to financing, lack of cash, and the complexity of the transition from face-to-face to digital.

In this context, the role of finance within companies is undergoing its greatest update. In the current disruptive times, finance teams are playing a fundamental role in overcoming these challenges, and success will strongly depend on several factors.

What are this new roles that finance departments have to occupy, and what will success hinge on?

A New Financial Approach

According to a Deloitte study, the success of finance departments will rely on resilience, their capacity to help the company react quickly, as well as delivering reliable information to add significant value to business operations. More so, they will become a strategic partner that helps senior management make the right decisions, with solid foundations and real-time information.

“Companies must question current business models and choose a defensive financial attitude, such as reducing operating expenses through process optimization, or having a special notion about leverage and liquidity,” the study says.

The disruption caused by the pandemic has called every business strategy into question, leading firms to rethink the way of doing and managing business. This has resulted in companies critically modifying part of their operations models and processes, quickly adopting new technologies and reviewing their talent schemes.

According to Statista, the use of mobile wallet apps like Apple Pay or Google Pay in North America is bound to double in the 2020-2025 period. In the meantime, “China was seen as the world’s leading country on proximity mobile payments –contactless payments which involve a smartphone – due to the popularity of Alipay and Tenpay.”

An Insider Intelligence report also states that, “Big tech companies, like Apple and Amazon, could grab up to 40% of the $1.35 trillion in U.S. financial services revenue from incumbent banks.”

The Disruptive Event

In the past, companies have experienced other relevant disruptive events either from internal causes or from the market. These have not only been related to times of crisis, and have also represented a milestone in the way companies operate, manage, and control their business.

Every organization begins its life as a startup –where growth is slow but steady– and is bound to face a disruptive event of any nature, in which finance will play a critical role.

As the company refines its products or services and increases its market share, “it often undergoes a period of rapid growth in its first five years of operation,” according to Deloitte. At this point, the challenge is to continue producing enough cash- flow to keep up with growth and deploy the finance and management systems needed for a firm on the rise.

Ultimately, in the company’s road to maturity, the growth curve will level off and at this stage, “there is an increased likelihood of a disruptive event to refuel growth.” The disruptive event could be anything: the merger or acquisition of another enterprise to boost production output, the introduction of private equity, or an initial public offering to secure the necessary capital to bolster growth.

According to Deloitte, these disruptive events create the start of a new growth curve and also trigger transformational activities within the finance department. “Finance teams are challenged to proactively assess their readiness to respond to the business needs arising from these events, and analyze the impact to the finance team and the business in order to protect and grow value.”

The Changing Role of Finance

In canonical terms, companies trust their finance teams to provide a solid monetary foundation through careful cash management, as well as reporting timely and accurately on the organization’s financial situation.

However, disruptive times like the pandemic have prompted high management to look at finance teams in a broader light, and widen their range of functions to navigate the tough times and create greater value –this is specially so as companies grow and become more complex.

Today’s finance leaders have a wide range of responsibilities, some of them relating to more operative and administrative activities such as the processing of accounting transactions, internal controls, risk management, resource management, and the presentation of effective information on the financial situation.

Also, from a strategic perspective, financial departments are now aiming to create a smart culture based on risks, as well as developing strategies for capital allocation and monitoring of key financial indicators.

The Four Roles

In the “Catalyst” role, financial professionals drive behaviors within the team and throughout the organization to achieve both the financial and strategic objectives, while creating a culture based on risks. “This is done by the design and implementation of effective performance management systems, dashboards, processes, and key performance indicators.”

From the “Strategist” role, financial teams help shape the strategic direction of the organization, aligning it to talent, processes, and the financial system. This includes a focus on capital allocation strategies for financial growth, and on mergers and acquisitions through the analysis of relevant scenarios and the current dynamics of the organization.

This role, according to Deloitte, has to deal with changes in the business environment to cope internally with potential changes arising from the ever-changing outside.

The “Administrator” role focuses on the protection and preservation of assets that are critical to the organization. Although financial talent keeps accurately reporting the monetary situation of the company and its operations, the pandemic has exacerbated the focus on the quality and seamless access to data to gain the most critical insights.

The role of “Operators” helps maintain the balance between skills, talent, costs, and service levels, to ensure that the financial function effectively fulfills its core responsibilities. With the pandemic, “There is a focus on efficiency and effectiveness of processes, central transactions, and systems, to ensure a solid and quality foundation.”

So, it is clear that, besides emerging business models –e-commerce, increased value, lower costs– financial departments have had to adapt to the new reality. However, among the new financial roles, companies should see whether they can dedicate less time to the “Operator” and “Administrator” roles by acquiring tools and incorporating new technologies, improving processes and controls, and attracting and maintaining talent.


Written by Jacob Wolinsky.

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Jacob Wolinsky
Jacob Wolinsky is the the founder and CEO of ValueWalk LLC. What started as a hobby 10 years ago, has turned into a well-known financial media empire with millions of monthly visitors focusing in particular on simplifying the opaque world of the hedge fund world. Before doing ValueWalk full time, I worked as an equity analyst first at a micro-cap focused private equity firm, as well as an analyst at a small/mid-cap value-focused research shop. After that, I worked in business development for hedge funds. I live with my wife and four kids in Passaic New Jersey.

Full Disclosure: I only invest in broad-based ETFs and mutual funds. I no longer purchase equities to avoid even the appearance of a conflict of interest.


Jacob Wolinsky is an opinion columnist for the CEOWORLD magazine. You can follow him on LinkedIn.