U.S. Bank CFO Insights Report: Finance Leaders Shift to Defense Mode
02 Octobre 2023 - 12:00PM
Business Wire
- Cost control the top priority
- Revenue growth deprioritized since 2021
- Finance leaders, especially those in California, still see
inflation as a top risk
U.S. corporate finance leaders have firmly pivoted their focus
from revenue growth to cost control as they navigate through an
uncertain economic environment and rapidly changing business
landscape, according to the 2023 U.S. Bank CFO Insights Report.
The survey of more than 1,400 senior finance professionals
nationwide revealed that the top two priorities are cost controls
within the finance function – up from the eighth highest priority
in 2021 – and cost controls across the entire business, a shift
from 2022. Meanwhile, driving revenue growth has been deprioritized
compared to 2021 when it was a top priority for finance
leaders.
“CFOs have positioned themselves decisively in defense mode.
With the end of the low-cost capital era and inflation still
uncomfortably high in some parts of the economy, finance leaders
are taking control by driving efficiencies in their organizations,”
said Stephen Philipson, head of Global Markets and Specialized
Finance at U.S. Bank.
“As we work with CFO clients on how to position their balance
sheets for a potentially more challenging economic environment, the
focus is on prudent capital-allocation decisions. We talk about how
to weigh cost-control efforts against focused investments that
could drive future growth. As our survey results show, this balance
is challenging CFOs,” Philipson added.
KEY SURVEY FINDINGS:
Top risks
- Rising interest rates, while still not a top risk, jumped from
the least concerning risk last year to middle of the pack this year
(23%). Similarly, regulatory changes (25%) moved up in the risk
rankings this year.
- Finance leaders ranked talent shortage (43%), pace of
technology change/digital disruption (40%) and high inflation (38%)
as the top risks facing their businesses. California finance
leaders said high inflation is their top business risk, much higher
than finance leaders across the country.
- Only 33% of finance leaders are more than somewhat confident in
their company’s ability to manage inflation risks; Only 6% are
highly confident.
Cuts vs. growth
- Cost cutting and driving efficiencies within the finance
function is the top priority (38%), compared with 30% in 2022 and a
mere 23% in 2021; cost cutting and driving efficiencies across the
business is the second highest priority (33%).
- Driving revenue growth was the fifth-highest priority (23%), up
slightly from 2022 but down from the second-highest priority (35%)
in 2021.
- 56% of finance leaders currently struggle to balance cost
cutting and building resiliency with investment in future growth,
up from 46% in 2021.
Areas for efficiencies
- Despite the increasing need to control costs, CFOs are not
turning to layoffs, as the competition for talent remains tight.
Only 19% plan to reduce headcount, compared with 40% in 2021.
- Instead, CFOs ranked investing in technology in order to cut
costs first, followed by restructuring their workforce and
outsourcing business functions and processes. Data analytics (53%),
artificial intelligence (52%) and cloud computing (48%) are the top
priorities for technology investments.
- Within the healthcare sector, about six in 10 believe AI could
completely redefine how the finance function is operated. In other
sectors, it was only about half of finance leaders.
Increased appetite for digital payments
- 68% of respondents intend to use instant payments (RTP®
Network, FedNow Service) two years from now. The survey found that
42% currently use real-time payments, up from 38% in 2022.
- Respondents from consumer and retail (56%) and hospitality and
leisure (54%) were more likely to say they used instant payments
today than industries such as oil and gas (34%) and aerospace and
defense (30%).
- Improved working capital (46%) resulting from faster payments
processing, and improved customer and supplier experiences (43%)
are the two primary drivers for adoption of instant payments.
View the full 2023 CFO Insights Report.
About the research
The results of this research are based on a survey conducted by
FT Longitude on behalf of U.S. Bank. The 1,420 senior finance
leaders surveyed work at U.S. businesses across multiple sectors.
Half of the survey participants are group, regional or divisional
CFOs. The remainder are senior managers within the finance
function. Every surveyed finance leader works for a business that
generates at least $100 million in annual revenue, and 39% for a
business that generates more than $1 billion.
About U.S. Bank
U.S. Bancorp, with approximately 77,000 employees and $681
billion in assets as of June 30, 2023, is the parent company of
U.S. Bank National Association. The Minneapolis-based company
serves millions of customers locally, nationally and globally
through a diversified mix of businesses: Consumer and Business
Banking; Payment Services; Corporate & Commercial Banking; and
Wealth Management and Investment Services. Union Bank, consisting
primarily of retail banking branches on the West Coast, joined U.S.
Bancorp in 2022. U.S. Bancorp has been recognized for its approach
to digital innovation, social responsibility, and customer service,
including being named one of the 2023 World’s Most Ethical
Companies and Fortune’s most admired superregional bank. Learn more
at usbank.com/about.
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version on businesswire.com: https://www.businesswire.com/news/home/20231002727233/en/
Todd Deutsch, U.S. Bank Public Affairs and Communications
todd.deutsch@usbank.com | 612.303.4148
US Bancorp (NYSE:USB)
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