Rethinking the financial profession: Transforming risk foresight into strategic insight

IN BRIEF:

• Finance must evolve from a compliance function to a strategic partner that translates risk into value.

• Organizations need the mindset of a risk expert to navigate the virtual, accelerated, flexible, and connected (NAVI) environment.

• Targeted change in all accounting practices, fifinancial performance, the financial statement closing process, and financial planning and analysis (FP&A) will enable the financial function to drive sustainable growth.

C-suite leaders are now navigating what can best be described as the “Again Era,” a time when organizations must face multiple challenges, simultaneously while still delivering growth. This convergence of needs is driven by rapid, non-linear changes in the business environment, creating overlapping and interconnected risks that require rapid and coordinated responses.

At the center of this difficulty sits the financial profession. Traditionally viewed as the manager of financial reporting and compliance, finance is now uniquely positioned to be a strategic mind center – capturing, processing, analyzing, and interpreting data for the entire business. The key question for today’s leadership is no longer whether finance should change, but how to transform the perception of risks into a sound understanding of finance.

NAVIGATION IN A PRIVATE NAVIGATION AREA
C-suite leaders are increasingly operating in what can be described as the NAVI risk environment – ​​indirect, accelerated, flexible, and connected. Risks are no longer isolated; they transcend jobs, locations, and value chains.

Philippine C-suite leaders recognized the urgency of this transformation through insights shared at SGV’s recent thought leadership forum titled “Turning Risk into Strategic Advantage,” held on May 6. Regulatory compliance risk emerged as the top concern (24%), followed by market risk (18%) and third party risk (17%). These priorities reflect a business climate where regulatory pressures continue to intensify, market conditions remain unpredictable, and reliance on extended ecosystems introduces new risks.

At the same time, emerging external forces are reshaping strategic agendas. Advances in quantum computing are expected to introduce complex cyber security and data privacy challenges (37%), while the fragmentation of regulations across jurisdictions (31%) includes compliance strategies. Additionally, the increasing frequency and severity of weather-related disruptions (25%) underscores the growing importance of sustainability and resilience in financial decision-making.

For Philippine organizations – many of which are deeply integrated into global value chains – these risks are amplified by regional regulatory diversity, the evolution of digital infrastructure, and high exposure to climate events.

FROM RISK MANAGEMENT TO RISK REALITY
Despite the growing complexity, many organizations continue to approach risk management with traditional, compliance-driven concepts. These legacy approaches are characterized by “check the box” processes, static frameworks, and limited innovation. While such measures may ensure baseline compliance, they are insufficient to address the dynamic and interconnected risks of today’s environment.

So a shift to the mindset of a risk strategist is essential.

Risk strategists go beyond mitigation. They align risk management with overall business strategy to ensure that risk considerations inform key decisions at senior levels. They use risk information to unlock value, rather than simply prevent loss.

In addition, they embed a culture of innovation and accountability within the risk function, encouraging teams based on business results rather than compliance metrics alone.

This change puts finance in a very important role. As the function with the ultimate visibility of all financial and operational data, finance is in a unique position to integrate risk considerations into strategic planning, performance management, and capital allocation.

FINANCIAL PERFORMANCE MONITORING
To succeed in this dynamic risk environment, finance leaders must rethink their work in four key areas of change:

Accounting efficiency. Accounting remains a cornerstone of financial integrity, but it must evolve to reflect emerging risks and complexities. Finance teams must continuously evaluate the potential impact of new financial reporting standards, such as PFRS 18, and ensure that their chart of accounts accurately captures the changing realities of the business. System reviews and reporting should also be carefully coordinated to ensure consistency, transparency, and consistency across the organization. In a heterogeneous regulatory environment, the ability to quickly adapt reporting structures is a key competitive advantage.

Financial Services. Efficiency is no longer enough; Financial activities must be aligned with business needs. This requires a clear understanding of which aspects of the operating model need immediate attention – whether it is process standardization, organizational structure, or enabling technology. Leaders must strike a balance between complexity and intimacy, ensuring that finance remains close enough to the business to provide actionable insights while maintaining standard processes that drive efficiency. Actions should be prioritized based on their relevance to strategic objectives, rather than individual performance improvements.

The process of closing the financial statement. The financial close process is often an area ripe for change. Many organizations continue to rely on manual processes, fragmented systems, and spreadsheet-driven workflows, which reduce speed, accuracy, and scalability. A systematic diagnostic approach is essential. Finance teams should evaluate their internal processes across five fundamental pillars: people, process, technology, data, and control. By mapping dependencies and identifying bottlenecks, organizations can uncover opportunities for improvement.

Benchmarking against industry peers can highlight gaps and best practices. More importantly, technology should be used not just to automate existing processes, but to fundamentally redesign them. Eliminating spreadsheets and integrating systems can greatly improve efficiency and reduce risk.

Financial planning and analysis (FP&A). FP&A is rapidly becoming the strategic core of the finance function. In a dynamic environment, static planning cycles are no longer sufficient. Organizations must adopt integrated business planning methods that allow for real-time performance analysis. This requires a thorough evaluation of processes, people, and data. Finance teams must improve their skills in situational planning, forecasting, and integrated reporting. At the same time, investment in talent development and management structures is essential to ensure that teams can effectively interpret and act on ideas.

Data integration is very important. The ability to integrate financial and non-financial data – from operations, supply chain, and external sources – enables more accurate forecasting and informed decision making.

TURNING FINANCIAL RISKS INTO PROFITS FOR STRATEGIES
Ultimately, the goal of financial reform is not just to manage risk, but to use it as a source of good strategy. For C-suite leaders, this requires a concerted focus on three priorities.

First, organizations must change their financial culture and capabilities. This includes embedding outdated concepts, upskilling, and building a future-ready workforce. In the Philippine context, where competition for talent remains fierce, targeted development and succession planning are critical to long-term talent sustainability.

Second, leaders must drive value-led strategies. This means aligning a long-term vision with clear and measurable goals in the short and medium term. Data-driven information should strengthen decision-making, supported by strong collaboration between finance and other management functions.

Finally, the impact of leadership must be strengthened through rigorous management discussions and continuous learning. As the risk increases, so must leadership. Developing the next generation of leaders and fostering a culture of curiosity and adaptability will be critical to staying ahead of disruption.

THE WAY AHEAD
The “Age of And” presents both challenges and opportunities. For finance leaders, it’s a defining moment — an opportunity to redefine the role of finance from a function focused on reporting the past to one that confidently shapes the future.

By adopting a strategic approach to risk and investing in targeted transformational initiatives, finance can move beyond traditional boundaries. It can be a valuable partner in business, turning risk perception into financial knowledge, and ultimately, into sustainable value creation.

In a world where many challenges must be tackled simultaneously, those who succeed will not be those who manage risk in the best way, but those who understand it deeply enough to use it as a catalyst for growth.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Aris C. Malatic is SGV & Co.’s assurance growth area leader and FAAS leader.