5 Topics CFOs Need To Learn About In 2020
As CFOs lead their businesses into the new year, many are looking out and seeing turbulence on the horizon. Instability looms not only socially and economically, but in the specter of a shifting legal landscape, a new tax law, and technologies capable of upending the concept of money itself.
With so many fundamental pieces in flux, smart leadership from the Finance function takes on new importance. The companies that will emerge strongest over the next few years will be those able to seize the opportunities offered by the present disruption. Company leadership needs to understand the trends and technologies shaping the environment, and that requires finance leaders who can build infrastructure and allocate resources befitting these shifting grounds.
The list of topics below is culled from the 2020 curriculum being planned by the CFO Leadership Council’s New York chapter (of which Abacus is a member) but is not endorsed by them. If you’re in the NYC finance scene, you can check out upcoming CFOLC events here. Together, they form a list of what we believe are the most important topics finance leaders need to learn to stay ahead of the curve in 2020.
The technology underlying cryptocurrencies like Bitcoin and virtual machines like Ethereum is a distributed ledger that validates new entries with a consensus system instead of a trusted authority.
Why it matters: Blockchain holds the potential to permanently change the way information is stored. Instead of sitting on private databases, data can now be recorded anonymously, radically public (which will benefit sharing) and cryptographically guaranteed as accurate.
Learning resources: Crypto news sites like Coindesk will keep you updated on everything blockchain.
Artificial intelligence gets the headlines, but an entire generation of automation — beyond technology specifically powered by machine learning — is pushing the frontier of what kind of tasks machines are able to own.
Why it matters: Advanced automation is already changing the way finance and accounting function. As more bookkeeping and lower-level tasks become managed by expense management software, the human employees of your finance team will take on a more strategic role.
Where to start: Gartner’s Top Tech Trends for 2020 overviews the most impactful developments in automation, from augmented analytics to autonomous machines.
A new front of industrial warfare has opened up in the last few years, and protecting yourself against it is table stakes. According to Accenture, the average malware attack costs businesses $2.4 million, while the top-end risk reaches into the hundreds of millions.
Why it matters: As the cost of these breaches — both financial and reputationally — becomes ever more stratospheric, protecting against them is increasingly becoming the job of everyone in senior leadership. As the custodian of the business’ most sensitive information and processes, Finance leaders need to know not only the resources needed to protect it, but an in-depth understanding of IT system vulnerabilities.
Where to start: Consultants are happy to educate you on the defensive measures you can take to ward off attack, but the problem is large enough for think tanks and governmental agencies to have gotten involved, as well.
Health care and benefits
For the sixth straight year, health care costs to employers are set to rise 5% in 2020, approaching $15,000 per employee. That’s a cost inflation almost twice that of wage growth and three times that of general inflation.
Why it matters: Health care isn’t just a growing expense. It’s also the subject of a complex and changing legal regime that, depending on what happens in Washington, might be extremely hard to predict more than a year in advance. Throw in the fact that the tax treatment of employee benefits are also changing by the year, and this makes for a space every in-house finance strategist needs to watch.
Where to start: Sign up for a newsletter from the Society for Human Resource Management and familiarize yourself with the changes predicted to arrive on the horizon. Being in the weeds is easier when you know a little botany.
One resource you can count on to continue providing news and analysis on these topics is right here, on the Abacus blog. In this past year alone we’ve covered blockchain, the changing tax treatment of benefits, cybersecurity, and intelligent automation. We’ll continue aggregating and analyzing all the most important finance trends right here.
Good luck learning, and we’ll see you in the new year.