Why CFOs Need a Seat at the Product Design Table

It’s a widely reported fact that the traditional role of the chief financial officer (CFO) is expanding well beyond balancing books and budgets, and increasingly taking on oversight of entirely new areas and projects — including product design.

“One dominant trend we see in the market is the rise of embedded payments,” Modern Treasury COO Rachel Pike told PYMNTS in discussing the idea of adding another seat and set of eyes on the process. “That’s an enormous opportunity across so many industries and so many products,” she added, noting that the input and unique insights of these financial-minded leaders has been a boon rather than a buzzkill.

As companies opt to create products and services that feature embedded payments, she said, they’re bringing in CFOs and finance teams to weigh in on the complexities and workflow considerations that accompany money movement. Everything from data collection and dissemination to reconciliation must be part of the equation, she said.

Along the way, she said, providers, including Modern Treasury, are seeing embedded payments changing various sectors of the economy — many of which have yet to be “touched” by software and may have only been “semi-touched” thus far by technology and innovation. Among those sectors: logistics and lending for financial services, construction and education (tuition payments).

In the bid to streamline processes to upgrade these sectors, Pike said, CFOs, while not necessarily becoming chief product officers, are being tasked to help deliver on these investments.

There From the Beginning

“You’re getting a seat at the table of these big core strategic initiatives,” she said, “and it’s good to be able to be there from the very beginning.”

But there are some challenges in the mix, she said. Many finance teams do not have the tools in place to help shepherd seamless embedded finance efforts into markets. There are often half a dozen systems working in the technological background, stitched together to launch embedded offerings.

“It’s operationally ‘heavy,’” she said — but the platform and partnership approach can help cut down on the complexity. Breaking down silos within the organization becomes critical, as there are so many moving parts that need to communicate with one another. As she told PYMNTS, linking systems is a good problem for software to solve — and not for people focused on managing payments volume and embedded flow.

“That’s when we see finance and product teams working together — they lock arms and they say, ‘we want to fix these problems with better tools,’” said Pike.

The need to reduce fragmentation and the tech heavy lift is especially urgent in an age where there’s been significant innovations with FinTech and the consumer experience when it comes to making payments in general, said Pike. The individual who has a frictionless experience buying their daily cup of coffee with their mobile device expects the same thing when paying other bills, or even running a small business.

To respond to those shifting expectations, she said, companies of all sizes — from startups on up to the largest enterprises — have been making the leap to better payment operations software to streamline embedded payments.

The ripple effects will continue to be contagious, predicted Pike, who noted, “If I’m a product manager at an insurance company, I’m going to shoot for the stars and try to do the same thing for my business.”