Next generation finance: Using IFRS 17 as a foundation for transformation

17 May 2019

Preparations for IFRS 17 and the parallel IFRS 9 have moved up several gears over the course of this year.

Clear signs of this increased urgency came from the finance leaders taking part in our recent “Is IFRS 9/17 a building block for digital finance transformation?” briefing and Q&A session. I wasn’t just struck by their readiness to take time out to discuss implementation at the height of the reporting season, but also the detail of their questions, which shows how much they’re now getting down to the nitty-gritty of IFRS 17.

Live polling revealed that around one in five are using IFRS 17 implementation as the foundation for digital finance transformation as they look to keep pace with business as well as regulatory disruption. Alongside faster close, priorities include sharper analytics and real-time reporting and forecasting.

A further 40% are targeting IFRS 17 compliance with some enhancements, highlighting the opportunities to accelerate turnaround, future-proof critical capabilities and maximise return on essential investment without going all the way to full transformation.

Eliminate then automate

A key focus for both finance enhancers and transformers is the chance to ‘eliminate then automate’ as CFOs look to create a function that is leaner, more agile and able to make more productive use of staff time. This isn’t just about automating routine processes but also using intelligent automation to augment human decision making and unlock the full value of data.

Lots of moving parts

What comes through strongly from the implementation projects we’re involved in – 140 at the last count – is how many moving parts are involved. When the finance leaders at the session were asked whether data, implementation capability or the maturity of vendor solutions are their biggest concern for IFRS 17/digital finance deployment, by far the biggest response was all of the above.

Clear path to delivery

So, what have we learned from our project experience about how to get on track? There is no single end-to-end vendor solution available now or likely to be any time soon. Implementation is therefore likely to require multiple sourcing and significant customisation. It’s also clear that data, talent and organisational collaboration are as important as systems in driving modernisation.

Cutting across all these demands is the challenge of delivering objectives – many of which are ambitious – while managing risk and curbing disruption to existing operations. In addition to developing next generation workforce and data models, a significant amount of our support therefore focuses on helping clients to develop roadmaps for delivery and take advantage of opportunities for simplification and acceleration, while strengthening tracking, oversight and control. This includes prototyping potential solutions and using innovative new project management tools to help insurers gain greater insight into implementation risks and organisational dependencies.

So, while there is a lot to do to simply comply, this is also a great opportunity for enhancing and transforming finance capabilities – when will another chance as good as this come around? And you don’t need to break the bank to create a next gen finance function. With effective understanding, design and project oversight, a few targeted investments and adjustments can make a huge difference in efficiency and business support.

If you would like to attend future briefings or have any questions about IFRS 17 or digital finance, please feel free to get in touch.

Alwin Swales

Alwin Swales | Partner
Profile | Email | +44 (0)7768 348197

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