Cybercrime is a top risk identified by CFOs for 2017

14 Dec 2016

A new uncertain world with cybercrime risks has CFOs troubled about 2017. Image: Dojo666/Shutterstock

Cybercrime, uncertain economic growth and exchange rate volatility are the top risks Irish CFOs fear in the year ahead, according to research compiled by PwC.

PwC’s 2016 CFO Pulse Survey published today (14 December) paints a picture of CFOs bracing themselves for a year of significant change.

While the majority of CFOs are confident about the year ahead, fewer are confident than previous years.

Future Human

That said, 48pc plan to hire more people and 92pc plan to increase basic pay.

The research reveals that Irish CFOs are actively repositioning their businesses for growth.

Two-thirds (65pc) are planning to launch new products as a strategic growth strategy.

More than a third (38pc) are planning to enter new markets – with the greatest barrier to expansion cited as identifying the right markets.

Upheaval and cyber risk

But the sense of looming change is all-pervasive. Nearly half of those surveyed expect changes in customer growth and retention strategies (46pc), shooting up from 33pc in 2014.

More than a third (38pc) expect changes in R&D innovation capacity, also up significantly from two years ago. Other key areas for change include M&As, organisational structure and talent strategies.

“The survey shows that Irish finance leaders are facing a world of unprecedented change but they are ready to tackle what is in store,” explained Garrett Cronin, consulting partner at PwC in Ireland.

“There is no doubt that the impact of Brexit and the change of political leader in the US may have complicated matters, and has certainly created uncertainty for the medium term.

“At the same time, they are focused on growth and innovation. While finance functions are becoming more strategic, the survey suggests that there is room for improvement in how they use technology, and particularly in leveraging the full benefits of data analytics.”

When it comes to technology, finance functions are partnering with the business in a more strategic way and expect to spend more time on enterprise-wide strategic initiatives in the year ahead. However, only a third (34pc) scored their organisation’s technology as excellent or very good when it comes to making business insight effective and efficient.

CFOs realise that they have more to do; they face a number of challenges in their finance functions, including regulatory reporting, developing the business strategy, accurate budgeting and forecasting, and supporting organisational restructuring.

Much of this mindset is being informed by upcoming regulations like the GDPR in 2018, which will dole out harsh financial penalties in the event of a data breach.

Others are mindful that insidious phishing attacks, for example, could leave their firms open for ransomware attacks.

“A cyber crisis can be one of the most challenging and complicated issues that any organisation will face,” said Pat Moran, PwC cybersecurity leader.

“Finance leaders have a role to play in ensuring that this issue is dealt with at boardroom level, and that the organisation has appropriate strategies around investigation and communication, as well as forensic and analytical capabilities.

“In today’s risk landscape, a company’s degree of readiness to handle a cyber crisis can be a marker of competitive advantage, and ultimately ensure its survival,” Moran said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years