5 Key Trends in Corporate Finance to Watch Out for in 2021

Introduction

Corporate finance is the backbone of any business, and keeping up with the latest trends is crucial for staying ahead of the competition. 2020 was a year like no other, and the financial world witnessed many changes that will continue to shape 2021 and beyond. In this article, we will explore the five key trends in corporate finance that are set to transform the industry in 2021 and the years to come.

1. Increasing Importance of Sustainability

Over the last few years, sustainability has been gaining a lot of attention from companies and investors alike. But in 2021, it will become even more critical in corporate finance. A growing number of consumers are demanding eco-friendlier products and services, which puts pressure on businesses to become more sustainable.

Many companies are considering sustainability in their investment decisions, and funding sustainable projects is becoming more appealing to investors. As a result, finance professionals will need to have a strong understanding of sustainability and its impact on businesses.

2. Embracing Digital Transformation

The pandemic has accelerated the pace of digital transformation in every industry, and corporate finance is no exception. One of the significant impacts of the pandemic is the shift towards remote work, which has resulted in more companies adopting digital solutions for their financial operations.

From cloud-based accounting software to mobile payment platforms, digital solutions are changing the face of corporate finance. Professionals who can leverage these technologies to increase efficiency, reduce costs, and improve productivity are going to be in high demand.

3. Increased Adoption of AI and Machine Learning

The use of AI and machine learning has been on the rise in recent years, and it’s set to continue in 2021. In particular, these technologies are becoming increasingly popular in corporate finance, where there are vast amounts of data to analyze and processes to automate.

AI and machine learning can help finance professionals perform complex tasks, such as fraud detection, risk analysis, and financial forecasting, more efficiently. Professionals who have the skills to work with these technologies will be able to provide more accurate and timely insights, which will be invaluable in making critical financial decisions.

4. Focus on Resilience and Risk Management

2020 was a year of unprecedented challenges for businesses, and it highlighted the importance of resilience and risk management. In 2021, businesses are likely to focus more on building greater resilience into their financial operations.

Risk management will also become a priority, as businesses face increasingly complex regulatory environments. Finance professionals who can demonstrate an understanding of risk management and resilience strategies will be in high demand.

5. Changing Role of the CFO

Finally, the role of the CFO is changing, and this trend is set to accelerate in 2021. CFOs are no longer just responsible for the financial performance of the business but also need to play a vital role in strategic decision-making.

As businesses face new challenges and opportunities, CFOs need to be agile and adaptable, with the ability to think strategically. They also need to be able to communicate effectively with stakeholders across the business.

Conclusion

2021 promises to be a transformative year for finance professionals, with sustainability, digital transformation, and innovation at the forefront of change. As businesses navigate an increasingly complex and challenging landscape, finance professionals who can embrace these trends and adapt to new ways of working will be valuable assets to their organizations. By staying up-to-date with these key trends, finance professionals can ensure they have the skills and knowledge needed to thrive in their careers.