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Behavioral data science popular among CFOs

Mona Mathur, CFO at Shriram General Insurance, shares the opportunities & challenges faced by a modern-day CFO:

Behavioral data science popular among CFOs

Ravi Lalwani: Please list the top 3 challenges that CFOs are most likely to face in 2023. What will help them solve those challenges – new knowledge, more IQ, more EQ, or something else?

Mona Mathur: CFOs need to take persistent action in 2023 to support their companies to handle major challenges such as inflation, higher interest rates, and slowing economic growth. CFOs need to improve their ability to forecast accurately to make sure that the company’s operating and financial models are in alignment, so the correct drivers of business performance are captured and analyzed to overcome challenges. Also, CFOs need to identify the critical areas where investments should be accelerated, such as human capital and digital technology optimization while managing costs against a high inflation situation.

Strategic CFOs must keep themselves updated about the cause and impact of changing global situations and their impact on the Indian economy to take the right decisions for the company. The Government of India is taking various measures to address and mitigate the direct implications on Indian economy. Hosting the G20 Financial Conclave for the first time in 20 years is one such step. Financial leaders from around the world are gathering this week in India to tackle challenges that are hurdles to global growth and stability, which also includes high inflation and surging debt.

In the last couple of years, what has been the major change in your engagement with different CXOs in the company?

Being part of the insurance industry, several changes are observed in consumer behavior and demands where they are expecting better experience from insurers. InsureTechs are leveraging robust technologies such as AI, ML, big data, and IoT to improve efficiency. This has stirred a big change in the way the industry operates. With the changing environment and consumer behavior patterns, the CXOs’ approach and their engagement with the CFOs have increased.

The environment is becoming ever challenging and dynamic organizations are strengthening their IT capabilities to keep abreast with the new changes and maintain data sanctity and are always receptive to the ideas and decisions of the CXOs working together incorporating them into the ecosystem to create value. They are implementing a strong framework for data security and customer privacy based on CXO’s inputs.

How should companies update their outsourcing and insourcing approaches considering the dynamic and unpredictable ecosystem?

Both sourcing models come with their own set of advantages, and the correct choice depends largely upon the specific sourcing requirement of each business. Outsourcing has long been a favourite of businesses looking to carry out basic processes while maintaining and reducing, costs. On the other hand, insourcing is historically more effective in supporting long-term goals for continuous process improvement. By embracing both sourcing models, businesses have more insight, control, and decision-making power.

With rising costs of technology and the varying technology options, what strategic inputs should the CFO community be presenting to the board?

Core technological trends have emerged over the last few years and are now impacting almost every business. Our product design and services are changing as a result of several technological breakthroughs and changes.

CFOs are implementing behavioral data science that involves intelligent customer data platforms to understand the customers better and speed up the decision-making process. They also use disruptive technologies such as the artificial intelligence, machine learning, speech recognition tech, data mining on multiple source data, and audience segmentation to serve this purpose.

While presenting to the board CFOs must provide the following key inputs along with the cost analysis: While reducing the amount of time spent on unnecessary tasks, shrinking the chances of human error, and allowing more people – specifically customers – towards improved online experience, the advantage to operate more efficiently, reducing costs, and improving communication with automation inputs, the need for trained officials to manage the technology options is also to be highlighted as an integral part of the advancement process.

With humongous amounts of data available, what kinds of decisions in your domain remain subjective?

Data-driven decision-making is the process of making decisions based on actual metrics. Whereas, in the subjective method, we use instinct or mere observations. Subjective decisions are experience-driven. It is pertinent to mention that moving towards data-driven decisions does not mean eradicating the human factor from them. When it comes to quick decision making relying on data is not sufficient. Especially when there is no availability of relevant data to analyze situations, human experience, and knowledge helps. Decisions related to human capital, no matter how comprehensive or well-analyzed data is available, need to be complemented by subjective Judgment and not just data-driven.


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