Finance

Wasabi CFO urges finance leaders, C-suite to embrace AI

Published

1 year ago

June 27, 2023

Wasabi CFO urges finance leaders, C-suite to embrace AI

Despite an economic downturn, runners in the AI race are still going at a sprint — and while CFOs need to ensure they are carefully considering all of the technologies’ risks and potential negatives, the biggest risk for financial leaders is in “standing still,” said Michael Bayer, CFO of Boston-based cloud storage provider Wasabi Technologies.

Taking on a more risk-forward mindset when it comes to such emerging technologies is critical for CFOs, who need to ensure they are placing their companies at the top of the coming “data wave,” a similarly transformative phenomenon as the internet and mobile waves of the past decades, Bayer said.

“I think we are in the very early stages of what this broad term of AI will unlock for us all,” Bayer said in an interview. “It’s perhaps more transformational than all of those other things that preceded it, and I think it’s a really exciting time to be at that sort of intersection point of finance and information.”

Getting ahead of the data wave

To enter this coming data wave on a high, CFOs need to ensure they have steady, trusted relationships with other key executives in the C-suite, such as the Chief Information Officer, a relationship that needs to evolve as businesses enter the new, post-AI world.

“It has to be mature and transparent, and you need to think together about where all this is heading because neither one of you has the sole world view,” Bayer said of how these two executives need to work in tandem. “It’s got to be collaborative.”

Wasabi itself does not presently have a dedicated CIO, Bayer said, but the company is “probably getting to the size and scope where we need someone to be a holistic thinker that’s a CIO,” he said. Oftentimes, however, such responsibilities fall under the remit of the CFO, he said, making it critical for such finance leaders to grow comfortable with new technologies quickly.

Bayer himself comes from a tech-forward background, having served in Wasabi’s top financial seat for four years soon after the company’s founding in 2017. Prior to joining the Boston, Massachusetts hot cloud storage provider, Bayer — who describes himself as a serial tech CFO — served as finance chief for various early-stage technology companies, including iZotope Inc., HealthWyse and Mobiquity Inc., according to his LinkedIn profile.

While the idea of “data as the new oil” has been around for some time, this trend has only begun to accelerate with the emergence of generative AI solutions, which have been fast adopted by some and which have led others to express concerns about data privacy, ownership and security. For his part, Bayer is excited to see how generative AI tools will impact or change the CFO role.

However, rushing to experiment with such uncharted technology can be a hard ask for the “hard-nosed analytical CFO,” he said. CFOs are constantly caught between “how to hit the accelerator” on the business and managing the risk of the business, Bayer said: Experimenting with generative AI comes with a host of new risks alongside its potential to unlock the value of a company’s data, such as a perceived job threat to one’s employees or increased cybersecurity or data privacy risks.

This is part of the CFOs’ day-to-day now: thinking about “what are the opportunities and the risks of proceeding in this new world?” Bayer said.

While CFOs can often do deep financial analysis to make sure they are getting a decent return on their investment when implementing new technologies, the nascent state of generative AI and like tools makes this more complicated — “all of financial analysis in the world was not going to tell the original backers of OpenAI what it was going to be worth to launch a model,” Bayer said by way of example.

CFOs can work to stay on top of this by “using the relationship to your CIO, your CMO, your CEO, to help you figure out where the hotspots are, and make sure that you’re not expert enough but knowledgeable enough in all the areas to have a conversation,” Bayer said. “And also, to help your colleagues with, ‘Hey, this is an area I don’t really understand, but maybe you should be diving into this, and help me with it.’”

Strengthening the CFO, CIO relationship

A strong relationship between the CIO and CFO can contribute to more effective results when it comes to technology spending and implementation, CFO Dive has previously reported. Sturdy CIO-CFO relationships lead to “measurably better digital spending outcomes,” Gartner analyst Emily Riley said earlier this month during a company conference, noting digital investments tend to be complicated, span different business functions, and therefore require higher levels of collaboration.

To make the best decisions here, CFOs also need to ensure they are “deeply informed” about the current state of technology, as are their colleagues in the C-suite, Bayer said.

Currently, when it comes to newer technologies like generative AI, CFOs may “get as well informed by your kids as you are by your CIO,” Bayer said.

“The intern, the college junior, that’s working on a data analysis project, that is learning all the new tools, probably has just as much to add as your CIO when it comes to the adoption of these new tools that are coming out,” Bayer expanded. “And that’s not to say that CIOs aren’t on top of this, but it’s such a new framework. It’s different today than it was six months ago.”

Additionally, as well as AI, CIOs are also occupied considering things like cyber risk, cloud adoption and data democratization, with AI adding to an already full plate, Bayer said. A collaborative relationship between key members of the C-suite is essential to approaching how these technologies can best aid the business.

“I think that relationship (between) the CFO and CIO has to be tight enough so that you can have this open dialogue about where you’re headed, and then make the decision about what system you’re going to deploy next week,” Bayer said.

Finance

30-year mortgage rate hits 2-year low

Published

6 hours ago

September 26, 2024

Press Room

The average rate on a 30-year fixed-rate mortgage was nearly unchanged this week but reached its lowest level in two years.

Thirty-year mortgage rates averaged 6.08% as of Thursday, down from 6.09% a week earlier, according to Freddie Mac data.

Average 15-year mortgage rates rose one basis point to 5.16%.

As mortgage rates hover around 6%, potential buyers are tiptoeing back into the market, and some homeowners who bought when interest rates topped 7% are weighing refinancing. Mortgage applications jumped to the highest level in more than two years last week, driven largely by refinancing volumes.

“Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks.”

Thirty-year mortgage rates have dropped more than a percentage point since May.

Read more: Mortgage and refinance rates today, September 26, 2024: Rates finally decrease

The Pending Home Sales Index, a measure of housing contract activity, rose 0.6% to 70.6 in August, improving slightly from July’s record-low reading, according to the National Association of Realtors. A level of 100 is equal to the amount of contract activity seen in 2001.

“Buyers are finally getting more comfortable with the rate,” said Selma Hepp, chief economist at real estate data provider CoreLogic. “I don’t think that’s going to mean a big boost for home sales this year given how low they’ve been so far, but still, it’s a little bit of improvement.”

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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Finance

AI, new generations and consumer finance

Published

17 hours ago

September 26, 2024

Press Room

AI, new generations and consumer finance

Öztopçu explains that while consumers are rapidly diversifying within the financing ecosystem, there is a genuine need for new generation financing products capable of responding to this diversity: “Seizing and developing technological opportunities, especially AI, enables companies to develop new production methods and tools, do a much better job at sizing up their competitors, and build creative competitive strategies.”

Garanti BBVA, in its role as a supporter of startup growth and investment, has revealed the latest cohort of startups joining its renowned Garanti BBVA Partners Tech Program.

As Generation Z enters its peak earning years, it has become the target of all sectors of the economy, Öztopçu notes. Generation Z prioritizes convenience over everything else, and appreciates special, innovative financial benefits, such as promotions and discounts. Öztopçu reports that Gen Z’ers also do a lot of their shopping on social media, but always after doing proper research, and rarely on impulse. To help them, they browse online channels and watch videos if necessary.

According to Öztopçu, this generation looks for the same perks and promotions when they are looking for financial products, such as loans, interest rates, and payment flexibility. In fact, when offered by brands, it builds greater customer loyalty among Gen Z’ers – even more so when the brands develop financial products that are customized to meet their needs.

Öztopçu explained that if a consumer uses a product developed in collaboration by brands and financial institutions, they visit the brand’s mobile app or website three times a month on average, and these visits convert into sales. During this transition period, the use of these hybrid structures is bound to become more widespread, as they are especially good at engaging with the customer, helping brands understand their needs and guiding them.

Therefore, according to Öztopçu, if consumer finance companies or banks insist on using traditional databases, they must be ready to work harder to offer new products that can keep up with changing consumer financing trends and lending habits.

Finance

Dow retreats from record high, Micron earnings on tap: Yahoo Finance

Published

1 day ago

September 25, 2024

Press Room

Dow retreats from record high, Micron earnings on tap: Yahoo Finance

The Dow Industrial Jones Average (^DJI) is pulling back Wednesday, after reaching an all-time high in the previous session. Investors are now turning their attention to Friday’s PCE report to help assess whether the Federal Reserve will continue its aggressive rate-cutting cycle. Meanwhile, Micron Technology (MU) is in focus on Wall Street as the chip giant gears up to report it’s fourth-quarter results after the market closes.

Yahoo Finance trending tickers include Rocket Lab (RKLB), Ford Motor Company (F), and Rivian Automotive (RIVN).

Key guests include:
3:05 p.m. ET Kate Moore, BlackRock Global Allocation Fund Head of Thematic Strategy
3:30 p.m. ET Alonso Munoz, Hamilton Capital Chief Investment Officer
3:45 p.m. ET Michael Lasser, UBS U.S. Hardline & Broadline and Food Retail Analyst
4:15 p.m. ET Daniel Morgan, Synovus Trust VP and Senior Portfolio Manager
4:40 p.m. ET Daniel Lubetzky, Kind Snacks Founder and Builders Movement Founder