Data Management Is Top Business Challenge, But Finance's Digital Skills Gap Is Only Making Things Worse

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Jun 29, 2023, 08:00 ET

Although Businesses Are Desperate for Stronger Data Management and Advanced Analytics, 29% of Finance Managers Have Little to No Digital Skills, Finds Creditsafe Study

ALLENTOWN, Pa., June 29, 2023 /PRNewswire/ -- We live in a digital-first world where data is the new commodity. And with 90% of the world's data created in the last two years, it can feel like a herculean task to process and make sense of all that data. According to a new study on AI's role in business risk released by Creditsafe, businesses are desperate for stronger data management and advanced analytics. While it's already difficult to tackle that challenge amid a looming recession, finance's digital skills gap is only making things worse.

The study reveals that 27% of businesses cite a need for strong data management and advanced analytics as their most pressing concern in 2023. This isn't surprising given how valuable data is in analyzing growth patterns and trends, managing cash flow, identifying risks and making decisions. These skills are especially important for the finance department, who are charged with protecting one of the company's greatest assets – cash flow. Unfortunately, 29% of finance managers have little to no digital skills and aren't comfortable with AI. And with only 14% citing expert digital skills, this will inevitably lead to inaccurate data, skewed data analysis, poorly informed decisions and, worst of all, lost revenue.

"Most finance professionals are wizards at using Excel to manage cash flow, invoicing and collections," said Matthew Debbage, CEO of the Americas and Asia, Creditsafe. "But when it comes to using AI and machine learning in customer onboarding processes (i.e. B2B credit checks, Know Your Customer/ID verification, anti-money laundering and compliance checks), they're often skeptical and mistrusting of AI. A lot of this mistrust comes from frustrations that AI will just be another thing to add to their already full workloads or that it will be too hard to learn and implement. But given the improvements other departments are already seeing from AI – including increased productivity, better detection and prevention of risks, more informed decision-making and revenue growth – finance teams can't afford to fall behind the digital transformation curve any longer."

Key findings from the research study include:

B2B credit checks aren't always cut and dry – at least half require in-depth analysis. 97% of finance managers process up to 100 credit applications a day. And for 63% of businesses, it takes up to 5 people to make credit decisions on new customers, while 22% of companies involve 6-10 people in the process. On top of that, 75% of finance managers take up to a full day (8 hours) to reach a credit decision on a single customer. Now consider this: 50-99% of weekly credit decisions require in-depth analysis for nearly half (46%) of businesses, while 10% of businesses admitted that further analysis is needed on every credit application they review.
AML and compliance checks are frequently skipped during customer onboarding. Given the U.S. government's tough stance on financial crimes and sanctions violations, you'd think companies would make AML and compliance checks a top priority and religiously use them during the customer onboarding process. But our study shows that's far from the reality. In fact, almost half (41%) of businesses only run AML checks on customers sometimes or rarely, while 38% take the same lax attitude with compliance checks. To make matters worse, 21% never run AML checks and 15% never run compliance checks.
Limited budgets and the generational tech gap make it hard to build strong finance teams. For example, 29% of the respondents said not having enough budget and resources was the biggest challenge they faced with recruiting and retaining finance talent. Additionally, 19% of finance managers believe insufficient digital skills and lack of experience with finance software make it hard to build strong finance teams. What's more, 21% of the respondents attributed slow user adoption of technology as the reason for finance's hiring challenges.
Manual customer onboarding processes leave businesses more vulnerable to financial losses and regulatory violations. Our study found that 82% of businesses still rely on manual credit decisioning processes. Given how pervasive and useful AI is in businesses today, this could explain why 27% of finance managers believe their credit decisioning process is rigid and ineffective. When we asked these respondents why they feel this way, 49% said it's either because the credit decision process is too reliant on manual processes or that it takes too long to reach a decision. These two reasons are important, as they could lead to errors, missed data points, skewed analyses and, ultimately, the wrong decision being made – costing the business dearly from a financial and reputational perspective.

Matthew Debbage concludes, "Customer onboarding isn't just one department's problem – it affects every department and the bottom line. Not investing in the right technologies or integrating your legacy data with credit risk and compliance platforms could leave your business open to more risks and deplete more of your cash flow."

To get an estimate of how much money you could save by automating your credit decision process, try Creditsafe's Automate & Save Calculator.

Survey Methodology

We surveyed over 300 finance managers in the United States to understand their perceptions of AI and automation and how those perceptions influence their willingness to automate financial processes. We also wanted to get a clear picture of the influence finance's digital skills have on the company's likelihood to digitally transform financial processes. The survey was fielded in May 2023 and included companies of all sizes and across all industries.

ABOUT CREDITSAFE

Creditsafe, the global expert in credit monitoring and risk management, is the world's most used provider of business reports. Today, over 115,000 customers globally depend on Creditsafe to make critical business decisions. Using real-time data from over 9,000 sources across 160+ countries, Creditsafe's mission is to help businesses mitigate financial, legal and compliance risks, while also empowering them to make more informed decisions. To learn more, visit our website.

Media Contacts

Crackle PR for Creditsafe (US)
Emily Shuler, Senior Account Manager
Email: [email protected]
Phone: +1 609 751 4712

Creditsafe
Ragini Bhalla, Head of Content & PR, US & Canada
Email: [email protected]

SOURCE Creditsafe