CFO optimism holding despite fears of further regulation

The H2 2017 survey behind the report, conducted in November and December, found that 71 per cent of CFOs are optimistic about the financial prospects of their companies.

However, 63 per cent are concerned about the impact of further regulatory changes.

Deloitte CFO program leader Stephen Gustafson said that despite CFOs becoming more comfortable with uncertainty, they are still keeping an eye on a range of issues important to future business performance.

“Regulatory change and its implications is at the top of this list, and 63 per cent indicated this would be important for their company in [the] coming years, compared to only 29 per cent in the first half of 2017,” Mr Gustafson said.

“This shift in concern is likely due to a recent flurry of regulatory activity in the financial sector, including greater powers for ASIC and APRA, the Bank Executive Accountability Regime, legislation impacting financial advisory and life insurance activities, and, of course, a Royal Commission which covers the financial sector more broadly.”

While the election of US President Trump has added to the global volatility equation, the Deloitte report found that CFOs felt that the impact of Trump policies on their specific activities would be minimal earlier in 2017.

“However, recent developments, including the introduction of corporate tax cuts and escalating geopolitical tensions with North Korea, have forced some respondents off the fence, with more feeling either negatively or positively about the direction of US policy,” Mr Gustafson said.

CFOs ranked digital disruption and innovation among the top five issues facing their firms in the next two years, and half also recognised that exponential technologies, such as data analytics and automation, will drive growth.

According to survey respondents, they are less focused on the capital requirements of new technologies and more concerned about how workers will adapt to the changes.