CFOs Catching Up with the Pace of Technology

Hungarian chief financial officers (CFOs) are becoming more comfortable with new technology, but face more complex regulatory compliance and ongoing cost-cutting pressures. They expect the rise of automation and digitization to fundamentally reshape their role, according to PwC's 6th edition of its Financial Leadership Survey.

One of the key findings of the survey is that CFOs are experiencing rising expectations as their role continues to expand and they are looking at how they can deliver value to stakeholders within the business. The skills most lacking in their teams are those related to change and project management and IT. However, the good news is that more and more managers are open to technological innovation, which can bring about significant changes in the way companies operate. There is a clear increase in confidence: while 54% of respondents in 2023 believe that AI will have a major impact on business processes in the next three years, 66% of respondents believe it will do so this year. Also encouraging is that the proportion of CFOs confident in using technological innovations has increased from 44% to 69% in two years.

37% of CFOs expect the number of accounting positions to decrease, a 5% increase from 2022. This is mainly driven by automation (91%) and cost reduction (60%). 62% of respondents mentioned that they have implemented a program in the past year specifically aimed at reducing costs, which included automation. As for the future transformation of finance teams, they continue to expect significant expansion in certain areas of expertise, with 45% of Hungarian CFOs looking to add BI experts to their teams (up from 41% in 2023) and 25%-25% looking to add controlling or risk management specialists. This has been supported by recent acquisitions and technology investments at group level, and indicates a growing demand for data-driven decision making.

This year, all but one risk category was rated lower by finance managers compared to the past 3 years. The only area lacking this confidence is over-regulation, which continues to be cited as a risk by 64% (up from 58% in 2023), making it one of the top three most cited risks for the first time in the survey's history – alongside an uncertain economic environment (73%) and slow organizational responsiveness (63%). The rating for the risk of having the right professionals in place fell from 81% to 61% in two years. It is worth noting that although 74% of CFOs expect significant challenges from changes in IT systems, only 48% currently see their inadequacy as a risk.

Non-financial reporting (sustainability reporting, ESG reporting) is seen by 56% of respondents as a significant new task and challenge for finance in the coming year. Expectations and regulations are becoming more complex and central to corporate governance (46% in 2022 indicates an increased focus on non-financial reporting). "At the same time, only 31% of finance executives are satisfied with the extent to which other senior executives see the opportunities in finance and the value it creates, so considerable effort must continue to be invested in engaging with them," Roland Balogh, PwC's director of capital markets and accounting advisory, who led the survey, pointed out.

27% of respondents already use AI in their day-to-day operations, a significant increase from 9% in 2023. In addition, more than a third (36%) plan to invest significantly in upgrading or replacing ERP systems (up from 29% in 2023), and are also paying close attention to automation. "In terms of planning and forecasting, a new phenomenon is the proliferation of specialized software, although the majority still use Excel. What is clear is that companies need customizable, flexible solutions that can produce innovative, efficient and cost-effective results," he stressed.

CFOs continue to expect that in the future, roles will increasingly shift away from data processing and reporting to decision support roles. AI could also play a key role in this area, with 65% of respondents believing that AI will significantly increase the efficiency of their subordinates (but only 56% expect an increase in their own work efficiency, while 79% of CEOs and 48% of CEOs believe the technology could reduce staffing needs.