Finance leaders expect a return to positivity in the global economy in 2025. Although pockets of uncertainty remain, inflation has levelled off, interest rates have eased and the market for M&A, IPOs and fundraising deals looks poised for a comeback. But while many business leaders are anticipating happier days ahead, finance chiefs are thinking about what can go wrong – and there is plenty keeping them preoccupied as we move into 2025.
Bracing for impending macroeconomic changes
2024 was a year of unprecedented political changes, which will continue to impact businesses in 2025. Finance leaders must remain agile and responsive to any policy shifts. Already, tax rises in Labour’s budget have fuelled anxieties about the cost of hiring new staff. And, Donald Trump’s promise to raise tariffs is stoking concerns among CFOs that doing so could increase costs across the board and eat into their profits.
“We are entering 2025 with a high degree of macroeconomic uncertainty,” says Martin Edstrom, CFO at Paragon, a business-service provider. “This may require businesses to make extremely quick decisions. CFOs must be vigilant, doubling down on scenario planning and incorporating flexibility into their budgets and strategies to respond to potentially sudden shifts in global [or domestic] economic policies, such as tax and minimum wage.”
According to Eliran Glazer, CFO at Monday.com, a workflow-planning platform, finance leaders will be expected to respond swiftly to macroeconomic pressures leveraging data-driven insights. “Periodic reporting alone won’t be enough,” he says. “The finance function must deliver real-time insights that guide wider business decisions on cost management, profitability and risk. Stakeholders want actionable data insights and a clear narrative that addresses their concerns.”
Better times ahead?
Although finance leaders will face plenty of challenges next year, including a tight labour market and persistent pricing pressures, there is less concern about a major downturn in economic growth.
Myles Corson, EY’s CFO expert, expects more upbeat market conditions in 2025, prompting an uptick in transactions and M&A activity. “This will enable CFOs to make more informed investment decisions and unleash some of the pent-up capacity that’s been hanging around. People will feel more comfortable moving forward with the transformation initiatives they’ve been holding off.”
As market activity picks up, investor expectations are changing, says Regina Lau, finance chief at Weavr, a fintech firm. ““Companies have grown slowly over the past two years due to economic volatility. The discipline developed during this period, in managing cash and driving efficiency, must remain. But there will be added pressure to show high, top-line growth again.”
To achieve this, Soren Westh Lonning, CFO at spend-management firm Pleo, plans balance offensive and defensive strategies in the coming year. He explains: “Offensive strategies involve turning potential distractions, such as resource allocation or AI adoption, into opportunities that align closely with our business objectives. Defensive strategies focus on operational tasks, such as monthly reporting, compliance and cost management, ensuring we free up time and resources to save money and drive efficiency.”
Will big investments in AI pay off?
Businesses invested heavily in AI in 2024. For finance leaders, the challenge in 2025 will be to figure out whether this technology can deliver on its promises of growth and productivity.
“There is a growing confidence in AI among finance leaders, but this is accompanied by a strict demand for accountability,” says Karla Smith, CFO at Ogilvy, an advertising agency. “Finance leaders are under pressure to work out if the excitement translates into tangible success. Understanding and measuring the ROI of AI projects will be a top priority, whether that is improvements in productivity or customer experience.”
Half of the CFOs recently surveyed by Financial Times Longitude plan to cut AI investment if it doesn’t show ROI next year.
Clear use cases for AI are emerging in the finance function, particularly when it comes to cashflow forecasting and customer support. AI assistants are having a positive impact too. The most advanced ones can quickly generate reports and enable users to interrogate their data. This is particularly useful for providing financial information to non-financial leaders in language they can understand.
“It’s going to change the landscape for us,” says Christoph Martin, CFO at PensionBee, a consumer pension app. “Everybody’s using AI as a productivity tool, but it will be interesting to see how this evolves next year. It’s going to become a bigger component of our decision-making, but it’s still early days.”
This will contribute to growing fears that AI will make certain finance roles redundant. A survey of 270 US CFOs by Datarail, a financial planning and analysis (FP&A) firm, found that finance chiefs expect their departments to shrink by 2026 as a result of AI. Google has already outlined plans to restructure its finance team ahead of a push for greater AI adoption.
“It has definitely highlighted shortfalls in finance professionals’ skills,” Martin says, adding that while AI may not fully replace human workers any time soon, it will require CFOs to consider the skills their teams need for future success. “Upskilling finance teams to handle this technology is going to be a top priority in 2025,” he says. “That doesn’t mean accountants need to master coding, but they must be able to ask the right questions.”
The evolving CFO role
“The CFO role will continue its evolution into one that demands a broader tool kit, beyond the pure finance discipline,” says Liz Kistruck, CFO of Motorway, an online marketplace for used cars. “A narrow financial focus simply won’t cut it. Instead, a top-to-bottom understanding of how the business works – from marketing, legal and people, right through to product, technology and operations – is required to be effective.”
More CFOs will emerge from diverse, non-traditional finance backgrounds in response to the changing nature of the job, Kistruck adds.
Soft skills will be essential. Emotional intelligence and experience with people-issues, such as diversity and wellbeing, will be the most important attributes for success among CFOs in the next five years, according to a 2024 survey of finance leaders by EY. “Fostering empathy and psychological safety, so people feel comfortable innovating and driving change, is going to be a critical differentiator for high-performing finance functions,” Corson says.
But it’s not enough for leaders to develop only their own soft skills. They must also help their employees to do the same, says Melissa Howatson, CFO at Vena Solutions, a FP&A platform. “Building the next generation of finance leaders requires multiple points of contact between different departments. Finance leaders must lead by example and encourage this development by introducing projects where team members can practice soft skills or even setting aside time for employees to attend conferences or workshops.”
The talent gap
Good finance talent will be harder to find in 2025. People are exiting the field in droves owing to dissatisfaction with working conditions and experienced professionals are becoming more expensive. Moreover, a shortage of new qualified accounting talent is creating a crisis, according to a recent EY survey. Talent shortages have already resulted in reporting inaccuracies and delayed filings, which threaten the integrity of the finance function.
Edstrom says finance leaders are seeking innovative and cost-effective ways to attract and retain talent and ensure long-term success. “We will be looking at slightly different talent pools next year,” he says. “We want to be less UK- and London-centric.”
CFOs must also address the growing demand for hybrid skills, such as data analysis and other digital skills. By 2027, CFOs expect half of their staff to be able to create and modify finance technology capabilities, according to Gartner Finance. But, at most organisations, less than 20% of finance workers currently have the ability to do so. Working out how to develop those technical capabilities will be a key challenge in 2025. Edstrom, for example, plans to create more opportunities for his team to engage with AI-adjacent projects.
A new era of ESG reporting
Finance chiefs will also continue to lead on sustainability efforts. 2025 is set to be a big year for businesses impacted by the growing tide of ESG regulations. Companies already subject to the EU’s Non-Financial Reporting Directive will submit their debut reports under the Corporate Sustainability Reporting Directive. Many large organisations will also begin preparing for the Corporate Sustainability Due Diligence Directive, which will be phased in from 2027.
“Dealing with the new era of ESG reporting represents one of the most pressing challenges for finance leaders going into next year,” says Smith. “It’s a really big piece of compliance work and there is an urgent need for CFOs to upskill themselves in this area.”
Concerns around the quality of data and the scope and the breadth of report requirements weigh heavily on CFOs. There is, however, a growing acceptance that this is part of their new reality. Smith believes, in 2025, more organisations will appreciate the benefits of standards that allow for consistency and comparability.
There are also signs that compliance and reporting will get easier. The new European Commission announced its intention to streamline climate regulations, in response to growing backlash from businesses against the volume and complexity of such directives. As with many other trends on the horizon, CFOs will just have to wait and see.
