As a result, the demand for digital consulting solutions in the areas of financial planning, forecasting and analysis has increased over the past two years, a senior TC executive said.
According to the study, 50% of respondents admitted that they consistently fail to meet short-term forecasts or make significant errors, and only 54% said their teams have sufficient risk assessment capabilities.
These leaders estimated that, on average, 43% of their financial planning and forecasting is based on intuition rather than analysis.
“Financial services clients are looking for a modernization of their overall financial planning and forecasting. And, clearly, we’re seeing a lot of activity in Europe and some in North America and India as well,” Vikas Gopal, Global Managing Partner, Head of Finance Consulting and Shared Services, TCS told ET. “Over the past 48 months, we’ve done a lot more work in the areas of agile financial planning and analysis.”
As TCS sees more clients in the field of specialist financial planning based on data from financial sectors across Europe, Gopal said other sectors and geographies are also entering this space.
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The study found that financial planning and analysis teams believe that rigid risk assessment practices hinder organizations’ ability to stay on top of the rapidly changing regulatory environment, as well as to manage changing demands.
“As companies began to realize they had data, they lacked information. But Covid-19 accelerated their need for technology to give them that information,” he added.
The TCS report found that a small group of financial executives, called the Financial Trendsetters, are leading the way.
Representing only 6% of the total number of respondents, they have more mature digital capabilities, operate in a more agile way and show greater use of AI and machine learning.
Trendsetters are also investing more in transformational financial planning and analysis capabilities to future-proof their respective organizations ahead of the next big disruption.
The 2021 TCS Global Finance Leadership Study surveyed 750 senior finance executives from companies with annual revenues of $5 billion or more, across a variety of industries including energy and resources , healthcare, travel and tourism, technology, insurance, financial services and manufacturing.
Respondents came from nine nations: the United States, United Kingdom, Germany, Canada, Netherlands, Switzerland, Australia, India and Japan.
According to the study, Trendsetters in this ecosystem who make effective data-driven decisions are more common in regions like Canada, Germany and India, in industries like banking, travel, tourism and hospitality, technology and high technology.
Trendsetters are more likely to invest in acquiring transformational capabilities such as cloud-based systems, AI/ML, and third-party consulting solutions than their peers.