Digital Finance


Digital Finance

The Digital Finance research area addresses the reciprocal relationship between the finance function and digitization. On the one hand, digitization has a significant impact on the transformation of the finance function. It must be structurally and strategically realigned as part of the holistic digital transformation of companies to take on new tasks. On the other hand, a broad methodological repertoire enables the finance function to better plan, control, and monitor digitization activities based on key figures.

Digitalization of the finance function

While business areas with a high level of customer interaction or in production are the focus of companies’ digitization activities (e. g. Industry 4.0), the potential of digitalizing the finance function is often given little attention. Yet this area offers a great automation potential and requires a strategic realignment to harness the opportunities of digitalization and enable new digital business models. In a digitally transformed role, finance uses decentralization and automation to leverage efficiencies in operations and at the same time takes a strategic role as a business partner with its own IT expertise. Thus, this transformation strengthens the strategic role of the finance function and enables close collaboration with the IT organization to be able to evaluate and manage digitalization activities from a business perspective.

Financial earnings and risk management

To manage a company in terms of sustainability and resilience-oriented, value-based corporate management requires an IT-supported, integrated earnings and risk management system. The use of modelling, simulation, and analysis models based on a consistent, company-wide database ensures continuous performance measurement, risk monitoring, and decision support. Financial earnings and risk management also make an important contribution to evaluating and supporting digitalization initiatives from a business perspective.

AI-supported financial forecasting

The finance function of companies is faced with the challenge of providing reliable financial figures and forecasts to achieve a better basis for planning and to enable comparison between current developments and the sustainability goals of a company. However, against the background of increasing complexity, networking, and dynamics in the markets, the manual preparation of forecasts by controlling is costly, time-consuming, and can lead to distorted results. Automated sales forecasts based on statistic procedures and machine learning methods, enable the near-real-time creation of forecasts and scenario analyses, which can be carried out with a minimum of resources and often achieve more accurate results. This helps companies to remain competitive in dynamic markets in the long term.

Analysis of digitalization potential

The analysis of digitalization potential reflects the ambivalence of the relationship between digitalization and the finance function: On the one hand, digitalization and automation potential can be leveraged in the area of accounting and controlling. On the other hand, tools from the finance function can be used to evaluate digitalization initiatives from a business management perspective and to quantify and prioritize their potential. The finance function thus has an important role to play in the course of the digital transformation.
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Prof. Dr. Björn Häckel

Professorship for Digital Value Networks