Asia-Pacific CFO Survey 2023

The year 2023 is a challenging year. In today's dynamic global business environment, organisations are having to navigate a landscape marked by economic fluctuations, slowing growth, surging inflation and an era of elevated interest rates. The survey was conducted across five economies in Asia-Pacific, namely, Australia, China, India, Japan, and SEA, we surveyed 276 CFOs in the region to better understand their challenges, priorities, and ways they are navigating the future.

The report finds that, most Asia-Pacific CFOs are optimistic or neutral about the future prospects of their national economies. In light of macro uncertainties, external and internal challenges facing businesses, traditional roles within the CFOs are metamorphosing to become broader, with boundaries between functions becoming more fluid. They become a key enabler to achieve digital transformation and sustainable development. An average of 77% of surveyed CFOs at the regional level said that their responsibilities, in terms of expectations from the C-suite leadership team, have broadened slightly to significantly in the last two years.

Deloitte China Vice Chair and China CFO Program Leading Partner, Dr. Norman Sze states, in the face of the global economic slowdown and the new situation of regulatory and government policies, China CFOs are increasingly aware of the important role of technology empowerment in achieving revenue growth and cost control. At the same time, influenced by the ever-increasing regulatory requirements of environment, society and governance (ESG), sustainable development and climate change have become one of the seven strategic priorities of China CFOs in 2023, prompting them to make new strategic thinking, professional layout and talent reserve.

Key findings in China and Asia-Pacific Region:

Optimistic market outlook

While overall optimism or neutrality outweighs pessimism, overall economic sentiment varies among CFOs in the Asia Pacific region:  30% of Asia’s CFOs express confidence in the economic future, with India CFOs having the highest confidence in their nation’s economic future (76%). 57% of CFOs also named the global economic slowdown or recession as the other top external risk facing their businesses.

Focus areas for the next 12 months 

The key priorities for business across the Asia-Pacific region over the next 12 months according to CFOs surveyed are revenue growth (62%), cost control (56%), and productivity improvement (37%). In Australia 75% of CFOs cited cost control as the top priority, while in Japan, CFOs cited finding talent (48%) as a focus.  And, in China revenue growth (70%) and cost control (49%) remain the top priority areas.

Companies are also facing the urgent challenge of addressing the climate change imperative. The region’s regulatory landscape is starting to shift as governments and policy makers are transitioning from voluntary disclosures to comply-or-explain disclosures, and ultimately, to mandatory disclosures. In terms of the level of preparedness of companies to tackle sustainability, climate and ESG priorities, survey results indicate a significant majority of CFOs (56%) are only somewhat prepared.

Changes in technology and regulation are also affecting priorities in Asia Pacific, making the transformation of the finance function a necessity. Achieving a deeper integration between finance, business, and technology is essential for evolution, and interesting CFOs report that their role is shifting from traditional guardians of data and accounting to value creation through transformation.

“When it comes to truly harnessing the power of digital, CFOs in Asia Pacific feel that there is a considerable distance to traverse.  A fraction of CFOs are leveraging big data and analytics or actively seeking AI and Machine Learning solutions to optimise their finance function, and this is where the leading CFOs will play an integral role,” said Porus Doctor, Deloitte Asia Pacific’s CFO Program Leader.

Other risks

A range of other concerns facing businesses in Asia Pacific were also identified.  Notably, respondents in Japan (43%) highlight currency fluctuations as a significant risk, while 27% of CFOs in China are concerned about the impact of regulatory or government policy changes, and 27% of CFOs in India view digital and technology disruption as a significant external risk to their business.  33% of AP CFOs cite capital flight from emerging countries as a concern and 51% of Australian CFOs citing inflation as a concern.

When considering internal risk factors, 59% of AP CFOs consider securing and retaining key talent as their top internal risk. 46% were concerned about change in demand for services or products, and 38% were concerned about their inability to execute strategies. Japanese CFOs (43%) are focusing their efforts on team capability and utilisation while Australian CFOs (39%) are currently hiring for Data Management, Cybersecurity, and Analytics Capabilities, surpassing the regional average (18%). 

Methodology

Deloitte’s Asia-Pacific CFO Survey is an annual survey that explores the sentiments of leading CFOs in the region. In this inaugural edition, we surveyed 276 CFOs in the region to better understand their challenges, priorities, and ways they are navigating the future. The survey was conducted across five economies in Asia-Pacific, namely, Australia, China, India, Japan, and SEA, between June and July 2023. Seventy-two percent of the sample is composed of chief financial officers from companies with revenue over US$100 million, and the sectors surveyed were financial services, life sciences and health care, manufacturing, public sector, TMT, energy and resources, and consumer business.

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