Australian CFOs ignoring cloud at their peril: Protiviti report

28 October 2020 - Australian banks and asset managers must invest more time and resources in cloud-based solutions to keep up with demands for more innovative, scalable, and secure financial services – and with the rest of the world.

That is the view of the 2020 Protiviti Finance Trends Report, which interviewed 1,057 CFOs and senior financial personnel from across the financial, technology, manufacturing, and retail sectors in Australia and globally.

When asked which their number one finance priority to be addressed over the next 12 months was, just 8% of Australian CFOs and finance leaders said cloud-based applications – compared with 15% globally.

Globally, CFOs rated cloud technology as their number one priority overall. Australia’s leading priority was changing demands and expectations of internal customers.

Protiviti Managing Director David Kissane said cloud-based applications that promote more flexible and secure financial services should be at the top of all CFOs’ shopping lists – particularly in the wake of the tougher regulatory conditions that followed last year’s Hayne Royal Commission and a string of banking scandals.

“Cloud services can enable financial institutions to transform their operations and enable them to better respond to changing market conditions whilst evolving their products to meet changing customer demand.

“However, it is imperative that the advantages of cloud services for financial institutions are not undermined by an inadequate focus on appropriate architecture, security, privacy and risk management. After the year we have just had, the need for best practice for consuming cloud services has never been clearer.”

Protiviti’s report is one of the most in-depth studies of its kind both globally and in Australia. The Australian statistics were garnered from: 42% of the businesses surveyed turning over between $100 million and $500 million, 34% turning over $500 million to $1 billion, and 17% turning over in excess of $1 billion. Of the respondent companies, 68% are privately held and 32% publicly held, while 50% have a national footprint and 22% a global footprint.

“The reasons for CFOs in Australia focusing on internal customers are twofold, and also stem from the greater compliance focus and the challenging economic conditions that have forced us to do more with less,” Protiviti Managing Director Adam Christou said.

Protiviti’s report also showed that security and privacy of data was at the top of respondents’ ‘wish-lists’ in areas in which they want to improve their knowledge and capability over the coming year. This was ranked number one both in Australia and globally.

Mr. Christou said that there is a growing appreciation of the commercial value of data assets, which will be heavily impaired where there is ineffective governance, controls, and integrity.

“This also speaks to the prevailing view that data is no longer just the domain of IT functions but of broader business ownership and stewardship.”

Mr. Christou said respondents both globally and in Australia kept outsourcing noncore activities as the lowest priority. “This is mainly attributed to the fact that outsourcing noncore activities may lead to risks including the loss of controls, data security concerns as well as increased regulatory focus. In contrast, other markets around the world appear to view this as a higher priority.”

Mr. Christou said there had been significant challenges faced by Australian finance functions in the new work from home environment and additional disclosures associated with the impacts of COVID-19. “27% of the CFOs and finance leaders from Australia felt that their ability to continue preparing reliable financial reporting and statements under timelines that couldn’t change has been significantly impacted compared to 17% of CFOs around the globe said their ability has been affected.

“There is a growing acceptance of work from home arrangements post COVID-19. With over three quarters of finance leaders supportive of the move. Interestingly, as the pandemic has gone on and the novelty of work from home has subsided, employees have indicated that they are not likely to work from home on a frequent basis with a preference to promote collaboration, inclusiveness and connection within the work environment.”

According to Protiviti’s survey, 41% of Australian respondents believe they are moderately prepared for shifting to a remote working model. Globally, just 28% of respondents said the same, suggesting that they are very well prepared for this transition.

About the survey

Participating in Protiviti’s 2020 Global Finance Trends Survey was more than 1,000 (n=1,057) finance leaders worldwide, including CFOs, vice presidents of finance, and a broad range of finance directors and managers. The survey was conducted online in July and August 2020. Respondents represent a broad cross-section of public and privately held companies. Survey participants were also asked to provide demographic information about the nature, size and location of their businesses, and their titles or positions.