US Bank Study Highlights Key Priorities and Challenges for Finance Leaders in 2024

US Bank recently conducted a study unveiling critical insights into the priorities and challenges faced by finance leaders in 2024. This study, targeted at office equipment resellers, underscores the importance of strategic investments and risk management in the current economy.

Cutting Costs Remains a Top Priority

For finance leaders, cutting costs both within the finance function and across the entire business remains a top priority. Interestingly, driving revenue growth has fallen to the fifth position, highlighting a shift in focus towards efficiency and cost-saving measures.

Investments in Technology Over Layoffs

Despite the emphasis on cost-cutting, finance leaders are not resorting to layoffs as a primary strategy. Instead, there is a strong inclination towards investing in technology, with 47% prioritizing tech investments over layoffs (21%). This is a notable change from 2021, where layoffs were a more common cost-cutting measure.

AI and Data Analytics Lead Investment Priorities

Data analytics (52%) and Artificial Intelligence (AI) (51%) are the top investment priorities within the finance function. AI is particularly favored for its applications in tackling risk (42%), identifying fraud (41%), and automating processes (37%). Finance leaders in industries such as Insurance, Oil and Gas, and Life Sciences/Pharmaceuticals are at the forefront of this technological adoption.

Top Risks for Finance Leaders

Talent shortages continue to be the leading risk for the third consecutive year, affecting 41% of finance leaders. The rapid pace of technological change and digital disruption is the second most significant risk (38%), followed by geopolitical tension and war, which have surged to the fourth position (26%). Inflation remains a concern but has dropped to fifth place (25%) from 38% last year.

Confidence in Risk Management

A significant 39% of finance leaders expressed a lack of confidence in their firm’s ability to manage and mitigate new risks effectively. This indicates a growing need for strong risk management strategies and tools.

Economic Outlook and Business Prospects

The study shows a mix in economic outlooks among finance leaders. While 33% hold a negative view for the economy in 2024, long-term prospects are more optimistic, with only 15% maintaining a negative outlook over the next three years. Despite current challenges, 45% of finance leaders are optimistic about their business’s financial outlook over the next 12 months, a figure that rises to 61% when looking three years ahead. Notably, in the automotive industry, optimism grows from 37% for the next 12 months to 63% for the next three years.

For office equipment resellers, understanding these priorities and challenges can be helpful in running their businesses as well as helping customers build strategies around these trends.