What Are the Top Priorities for CFOs in 2024? Reviewing the Survey Results

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In this year's final edition of our newsletter, we aim to prepare you for what lies ahead and offer insight into what CFOs believe will shape their future.

The role of CFO has evolved significantly, reaching new levels of complexity and influence in shaping corporate strategy and financial health. As we enter 2024, the landscape for CFOs is characterized by a delicate balance between navigating economic uncertainties and steering transformative initiatives to ensure sustainable growth.

Every year, CFOs from diverse industries and regions participate in surveys to outline their expectations for the upcoming years. This year's PwC CFO agenda reveals intriguing insights into what awaits CFOs in 2024. Furthermore, as we approach the year's end, a wealth of information about upcoming trends is becoming increasingly available.

CFOs Top Priorities For 2024

Strategic Cost Reduction

In 2024, CFOs are shifting their approach to strategic cost reductions aimed at fostering growth and enhancing investments. As recession fears in the market subside, CFOs are taking a proactive role, focusing not just on reducing expenses but also on making investments that lead to greater productivity and higher ROI.

CFOs recognize that strategic investments, especially in technology, can lead to significant long-term cost savings. According to the latest PwC Pulse Survey (2023), 64% of finance leaders are investing in AI and cloud technologies, not only to modernize their operations but also to gain long-term financial benefits. The key is striking the right balance between cost-cutting and growth-oriented investments. A majority of CFOs (89%) see balancing these aspects as their top challenge.

A crucial part of strategic cost reductions is reinvesting the savings into areas that can generate more revenue or lead to further cost savings. This self-funding budget approach is being recognized by top-performing CFOs. They understand the importance of reassessing and redistributing financial resources to areas offering the most significant returns, whether in new market entries, product innovations, or technology upgrades.

Technology and AI Integration

One of the most significant trends for CFOs in 2024 is the continued adoption and integration of artificial intelligence (AI) into finance functions. The acceleration in adopting AI-enhanced finance tools is notable, as highlighted in a KPMG survey, where 59% of C-suite leaders reported using AI in their tax or finance functions. This trend is expected to continue in 2024, with AI offering the ability to automate routine tasks and identify risks and trends that might otherwise be overlooked.

The application of Generative AI (GenAI) is particularly transformative. EY's roundtable discussion emphasized the widespread engagement of CFOs with GenAI for various purposes, including fraud detection, preparing for investor calls, and enhancing customer journeys. This adoption signifies a strategic shift from using AI as a mere search tool to a more transformative role in business strategy and operations.

However, adopting these technologies is not without challenges. According to the PwC, a significant 88% of executives struggle to extract measurable value from new technology investments. This calls for a focused approach where CFOs must ensure that investments in AI and other technologies not only align with their company's strategic goals but also deliver tangible returns.

The advancement in AI and technology in the finance sector requires a parallel shift in skills and understanding. The downside risks, especially regarding data security and integrity, are areas of concern that finance professionals must upskill to manage effectively. As AI becomes more integrated into everyday finance operations, CFOs are tasked with balancing the implementation of these advanced technologies with the associated risks and rewards, ensuring that their teams are well-equipped to leverage these tools for strategic advantage.

Embracing The New Role Of Finance

In recent years, the role of the CFO has undergone a transformative shift. Once predominantly focused on managing budgets and financial reporting, the modern CFO now stands as a pivotal strategic partner to the C-suite, spearheading business transformation, growth, and innovation. This evolution marks a significant departure from the traditional perceptions and responsibilities of the role.

Today's CFOs are viewed as essential drivers of business innovation and transformation. As highlighted by PwC, a substantial 43% of finance leaders recognize establishing finance as a key business partner as one of the top three priorities for the finance function in the upcoming year. This sentiment signals an accelerating trend for 2024, where CFOs are anticipated to play a crucial role in navigating economic uncertainties and harnessing technology for business expansion.

A particularly noteworthy development in the CFO landscape is the progression towards the role of Chief Value Officers (CVOs). This new designation emphasizes a shift in focus to broader value creation that goes beyond traditional financial metrics. The Association of Chartered Certified Accountants (ACCA) asserts that Environmental, Social, and Governance (ESG) factors are increasingly viewed as significant contributors to corporate value.

Talent Management and Retention

Talent acquisition and retention remain significant concerns. The historically tight labor market has made it imperative for CFOs to focus on strategies for retaining team members and attracting new talent. Upskilling and reskilling are vital components of these strategies, intersecting with technology adoption and fostering a workforce capable of navigating a rapidly evolving business landscape.

As the labor market becomes increasingly competitive, CFOs must prioritize attracting and retaining top talent. This includes investing in employee development and creating a positive workplace culture. PwC’s survey indicates that nearly three-quarters of executives believe they can attract and retain the talent they need, emphasizing the importance of a robust workforce strategy.

Risk Management

In essence, risk management for CFOs in 2024 is about being proactive, strategic, and comprehensive, covering a wide range of risks that affect the organization's resilience and sustainability. CFOs are managing not only financial risks but also broader organizational risks, including cybersecurity threats, geopolitical uncertainties, and supply chain vulnerabilities.

Cybersecurity remains a top concern, with many recognizing it as a significant risk to business operations. The PwC report highlights that 74% of CFOs say cyber attacks continue to be a top risk to their businesses. Alongside this, CFOs must navigate economic uncertainties, such as fluctuating interest rates and inflation, requiring a balanced approach between cost management and strategic investments.

With digital transformation being a key agenda item, CFOs are intensifying their focus on cybersecurity. They need to incorporate cybersecurity considerations into every aspect of digital and technological deployment, recognizing it as a crucial component of risk management. This involves assessing and mitigating risks associated with cloud computing and digitized processes, and ensuring robust data protection measures are in place.

Climate Change and ESG Integration

Environmental, Social, and Governance (ESG) factors are becoming increasingly significant in the finance sector. In 2024, CFOs will need to navigate new reporting regulations, such as IFRS S1 and S2, and integrate ESG metrics into their strategic planning. This shift in focus reflects a broader understanding that ESG factors are not just about compliance but are integral to long-term value creation and risk management.

With the growing awareness of the environmental and social impacts of investments, CFOs are reevaluating their investment strategies to align with their values. This reevaluation indicates a broader trend of integrating advanced technologies and sustainable practices into financial decision-making.

According to PwC, ESG reporting regulations are sparking urgency among finance leaders, with 41% acknowledging the risk of not meeting sustainability commitments. While compliance remains a focus, CFOs are leveraging their expertise in accounting and controls to accelerate preparedness. Significantly, 39% have established policies and controls for climate data collection.

However, CFOs recognize that sustainability extends beyond mere compliance—it's about creating long-term value. Integrating sustainability into business strategies presents opportunities to develop new revenue streams with more sustainable products. Climate change scenario analysis is a priority for 30% of CFOs, indicating a proactive approach to understanding its potential financial implications.

Conclusion: Future-Proofing Through Transformation

As CFOs look to 2024, their focus is on driving transformation while mitigating risks. The key to successful transformation lies in effective execution, integrating new technologies, and developing a culture conducive to change. PwC’s Pulse Survey emphasizes this point: "Executives are far more likely to invest in future growth rather than hunker down." This forward-looking approach is crucial for CFOs to ensure their organizations remain competitive and resilient.

The evolving role of CFOs in 2024 embodies a delicate balance between managing immediate financial concerns and steering transformative initiatives for long-term growth. Technology, sustainability, risk management, and talent acquisition stand as pillars of focus in the journey towards business reinvention. As the economic landscape continues to evolve, CFOs play a pivotal role in navigating uncertainties while driving strategic initiatives that foster growth, sustainability, and resilience.

In 2024, data is expected to continue playing a crucial role in decision-making and strategy development. CFOs will need to have a strong grasp of data analytics and be able to effectively communicate insights from data to their teams and other stakeholders.