94% Indian CFOs optimistic about nation's economic future: Survey

New Delhi: As many as 94 per cent of Indian chief financial officers expressed confidence in the nation's economic future, displaying the highest optimism across the APAC region, according to the latest Deloitte Asia Pacific (APAC) CFO Survey 2023.

According to the report, more than 30 per cent of Asian CFOs have confidence in the nation's economic future, with 71 per cent of Japanese CFOs being more neutral as compared to their Australian (51 per cent) and Chinese (49 per cent) counterparts. Indian CFOs' confidence underscores the resilience and proactive strategies that Indian financial leaders adopt during global economic uncertainties, Deloitte said in a statement.

The report titled 'The next set of imperatives for CFOs in the Asia-Pacific region', demonstrates the business imperatives facing organisations of 276 leading CFOs in the region. It highlights CFOs' responses to the near-term business landscape marked by economic fluctuations, slowing growth, surging inflation, and elevated interest rates.

'Closely mirroring the economic sentiments, the survey also reveals a distinct sense of optimism amongst Indian CFOs regarding their companies' financial prospects. With 85 per cent demonstrating some degree of optimism, Indian CFOs exhibit a more positive outlook towards their organisations' outlook compared with their counterparts in other Asia Pacific nations, such as Australia and Japan, where the sentiment is more neutral,' it said.

Global economic slowdown or recession (59 per cent), geopolitical issues (53 per cent), and digital and technology disruption (27 per cent) have emerged as the top three external risks concerning Indian CFOs.

Securing and retaining talent (59 per cent), disruption in products or markets (41 per cent), and technology implementation/digital disruption (35 per cent) have been cited as key internal risks.

'When it comes to truly harnessing the power of digital, CFOs in Asia Pacific feel that there is a considerable distance to traverse. A fraction of CFOs are harnessing big data and analytics or actively seeking AI and machine learning solutions to optimise their finance function. This is where the leading CFOs will play an integral role. It is inspiring to note that Indian CFOs, in particular, are at the forefront, demonstrating a proactive willingness to embrace technology for transformation of the finance domain,' said Porus Doctor, Asia Pacific CFO Program Leader and Partner, Deloitte India.

CFOs differ in their approach towards managing the risks across Asia Pacific. About 78 per cent of Indian CFOs prioritise technology automation to minimise risks, compared with Australia, China, and Japan that focus on managing costs (40 per cent), improving monitoring of operational procedures (44 per cent), and monitoring portfolios and investment decisions (52 per cent), respectively.

'The landscape of the Indian CFO is undergoing a transformative shift, transcending conventional financial oversight to emerge as pioneers in strategic agility and digital innovation. In this paradigm shift, C-suite executives are increasingly turning to Indian CFOs not only as custodians of financial prudence but as pivotal architects of comprehensive business strategy. The survey results reflect these trends, with India topping the charts in expectations from CFOs for steering organisational transformation within their companies,' said Nandita Pai, Partner and CFO Program Leader, Deloitte India.

According to the Deloitte survey, the role of a CFO is changing. About 86 per cent Indian CFOs feel that their responsibilities, in terms of expectation from C-suite leadership, have broadened over the past two years. Nearly 84 per cent of Indian CFOs said that they are expected to lead transformative initiatives within their organisations.

Key business priorities across the Asia-Pacific region over the next 12 months according to CFOs surveyed are revenue growth (62 per cent), cost control (56 per cent), and productivity improvement (37 per cent).

In Australia, 75 per cent of CFOs cited cost control as the top priority, while in Japan, CFOs cited finding talent (48 per cent) as a focus. Moreover, in China, revenue growth (70 per cent) and cost control (49 per cent) remain the top priority areas.

For Indian CFOs as well, revenue growth (73 per cent), cost control (47 per cent), and productivity improvement (37 per cent) remain the top three priorities for the next year.

In the Asia-Pacific region, many companies face the urgent challenge of addressing the imperative of climate change. This is reflected in the region's regulatory landscape that is undergoing transformation as governments and policymakers transition from voluntary disclosures to comply-or-explain disclosures, to mandatory disclosures. About 61 per cent of Indian CFOs agree that climate and sustainability regulations will have an impact on their financial reporting.

'Indian CFOs also displayed this urgency in terms of putting in place adequate processes to comply with climate requirements; about 59 per cent plan to implement the necessary processes in the future and 37 per cent have already implemented these processes,' Deloitte said, adding the survey also highlighted the degree of preparedness of CFOs to tackle ESG challenges, with 22 per cent of Indian CFOs being prepared in this regard.

In terms of proactive sustainability initiatives by Indian CFOs, adopting public policy positions that promote sustainability and actions to address climate change (65 per cent), encouraging or requiring suppliers and business partners to meet specific environmental sustainability criteria (53 per cent), and using more sustainable materials (55 per cent), topped the list.