From the CFO stack: A rewind in 2024 with a step in 2025

From the CFO stack, the gone year (2024) witnessed a seismic shift in the roles played; right from an analyst going beyond numbers,chasing value, being an innovator, checking the expansion of the organization, putting up with the high debt cost, and whatnot.

A look back at 2024, shows the evolution of the CFO’s role better defined by bringing in a multitude of factors to drive optimization and efficiency.

The year saw breakthroughs in technologies with AI redefining the corporate landscape and triggering many of the finance functions. The aim is to integrate the processes for a seamless experience and analysis of the data beyond the traditional methods of looking at numbers in spreadsheets. CFOs assumed the role of technologists helping C-suite leaders make informed strategic decisions and address the different product mixes as demanded by the rising customer base.

Well, let’s look back at what grabbed the timelines and the shifts in the power dynamics for the finance leaders and how promising 2025 looks like.

1. Value creation

CFOs navigated and integrated successfully through advanced technologies like AI and ML. Ranging from cloud computing to artificial intelligence, they evaluated the capital requirements for these innovative technologies and weighed the potential payoffs against the trade-offs. This helped in shaping the way organizations have adapted and thrived in the ever-changing landscape.

Looking back, the role of the CFO has undergone a transformation, shaped by the demands of a volatile, uncertain, and complex environment. Due to this, the CFOs have had the chance to develop the ability to reframe situations, seeing opportunities from new perspectives. They built value for stakeholders, focused on expanding the wings of the businesses, and invested in the technologies to stay ahead of the competitive curve and be the first to get the firsts of long-term success.

2. AI and Digital Transformation

Gen AI and ML are the new face of digital transformation that can put the company at a competitive edge. AI integration in the financial reporting tools was the talk of the town; harnessing Gen AI’s capacity to analyze huge amounts of data, streamlining financial close processes by automating repetitive tasks, and unlocking new capabilities for reporting automation to free up the finance team’s time for higher value tasks.

In the latest survey, based on the CFO’s responses, Gen AI was used for, planning, forecasting, and analysis of automated routine/transactional processes, increased efficiency and cost reduction improved decision-making and insights accounting, reporting, and reconciliations. Also, a noticeable gap was seen between CFOs’ transformation goals and the disruption they are encountering. A significant majority (74%) focused on immediate priorities, aiming for “best-in-class” performance as their benchmark and only 11% of CFOs demonstrate a high level of ambition for transformation.

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3. Security and risk management framework

The emerging technologies involving AI and ML require more vigilance and cognizance of the risks associated with decision-making based on the information available. The increasing cybersecurity responsibilities kept CFOs on their toes. This growing concern necessitated the need to engage directly with Chief Information Security Officers to understand and monitor the associated risks.

Many CFOs shifted focus from just managing numbers to cybersecurity strategies. This whole management framework has to be integrated seamlessly with risk management efforts for the overall business operations.

4. Staffing and talent challenges

83% of CFOs cited hiring challenges as the major concern for 2024. A decade ago, bringing skilled financial professionals on board was easy, all that was needed a competitive salary, job security, and clear career advancement to fill positions. The evolving job market has changed the expectations of finance professionals, who are now looking for more than just incentives to boost morale and spirit.  With automation and technology reshaping the finance function, employees are increasingly seeking opportunities that will allow them to move beyond repetitive tasks and contribute strategically to the business.

The autonomy approach is becoming more popular for the employees giving them the autonomy to approach their work. This change in management style requires new and innovative approaches to measure productivity, especially in a hybrid work environment. Data analysis and collection is to be undertaken to assess performance and processes in a streamlined manner.

5. Accelerating mergers acquisitions

Throughout 2024, CFOs have seen growth from M&A activity, especially during economic uncertainty. The companies that have strong cash reserve or access to capital are well positioned to acquire undervalued businesses, thus expanding their new share. Despite the growing opportunities, the pace of M&A has been slower than expected, as the valuation mismatches the delayed deals. Buyers like equity firms and corporate strategists have adjusted to the changing demands of the market and sellers, on the other hand, are slowly recalibrating their expectations to slow the M&A activity.

By leveraging predictive models, CFOs have been able to assess potential growth opportunities, identify cost synergies, justify acquisitions, and minimize risk. This shift towards the analytical approach has been essential in making sure that M&A decisions are not only financially sound but strategically aligned with long-term business goals.

What does 2025 hold for the finance leaders?

There have been swift changes over the last five years, including historically low interest rates, a higher rate environment, and a resurgence of recession concerns. Chief financial officers (CFOs) need to be able to cope with discomfort, particularly as their responsibility grows. Even while sudden changes in legislation and geopolitics might cause instability, having a comprehensive understanding of your company’s financial situation can help you meet any obstacle head-on. How? with an emphasis on using teamwork and business model innovation to drive commercial results.

Finance leaders must possess various abilities to handle complicated issues, financial rules, and political unpredictability, including financial knowledge, strategic decision-making, and risk and stakeholder management. Risk, interest rate implications, and capital requirements are still at the top of the list of CFO challenges.

With continuous innovation and financial transformation, CFOs are currently overburdened. To safeguard financial health and improve financial resilience, modern technology can identify hazards, model situations, and assist in developing mitigation solutions. Working together with other members of the C-suite is similarly important. Your business can succeed if teams are aligned and data-driven decisions are enabled.