It’s been a few years now since Angela Strange of Andreessen Horowitz coined the phrase ‘every company will be a fintech company’. It’s an expression that’s become pervasive throughout the fintech space, referring to her belief that infrastructure changes and technological advances will result in ‘embedded finance’, where any company can embed financial services and thus become a fintech company.
Yet despite Strange predicting this imminent embedded finance future in 2019, we still haven't reached a point where even a significant proportion, let alone every company, derives revenue from embedded finance. .
There have definitely been plenty of tech advances that have upset the status quo and changed how we view and approach finance. Just look at expense technology. Filling out expenses used to be a brain numbing torment that haunted the dreams of every small business owner, finance team member, and corporate employee, but we now have a plethora of new tools to take the pain away. With software like Spendesk, Pleo or Jeeves, gone are the days of standing by with a scanner, idly copying receipts.
But of course, this is just an outlier. While fintech has certainly transformed consumer finance with advancements in payments, banking, lending, credit etc., there is still plenty more that can be done for businesses. This is especially true for SMEs, which don’t necessarily have the funds to invest in the latest shiny financial technologies like big corporations.
Enter CFO tech, a fintech subsector that’s been growing steadily in recent years. Also known as ‘financial management’ tech, the core goal of CFO tech is making the life of chief financial officers (CFOs) easier. While CFOs have traditionally been responsible for balancing the books, the sheer amount of data at their fingertips today means they’re now asked to provide advice on everything from growth strategies to planning cash flow.
The software at CFOs’ disposal simply hasn’t kept pace with their expanded responsibilities, and much of their time is now spent compiling reams of data from different disparate spreadsheets.
But help is at hand.
Whether it’s building software to help CFOs and finance departments negotiate corporate structure and communicate better with other departments, or automating various financial analysis processes, the UK is home to a number of CFO tech startups hoping to upset how businesses everywhere think about and approach finance.
Causal is building a single platform to allow financial modellers, business teams and executive to work together on financial planning and analysis; Xelix is using AI-powered software to introduce what it claims is the world’s first ‘accounts payable control centre’; Expend has put together an all-in-one platform for managing business expenses.
And our client Juni helps CFOs at ecommece companies and retailers gain complete visibility and control over their cash flow and better manage their finances.
CFO tech is the revolution the sector really needed. It upsets the status quo so completely that it will likely be CFO tech, not embedded finance, that will act as the catalyst to transform every company into a fintech company.