While AI can automate more tedious processes in businesses, it’s important to choose the right platforms. Payments can be easily automated, but CFOs should consider many factors when adding technology to payments—otherwise the process could get worse. I spoke with Matthew Davies, a global payments executive at Bank of America, about what CFOs should consider before making this decision. An excerpt from our conversation is later in this newsletter.
Until next time.
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ECONOMIC INDICATORS
Kevin Warsh testifies last week at his confirmation hearing before the Senate Committee on Banking, Housing, and Urban Affairs.
Andrew Harnik/Getty Images
As the Federal Reserve Open Market Committee prepares to meet this week, it’s unlikely that there will be any big changes. Analysts are unanimously expecting the board to keep baseline interest rates unchanged, according to CME FedWatch. Inflation remains sticky and consumer confidence is trending downwards, hitting an all-time low for the 48 years the University of Michigan has measured it.
Change may be coming soon. This is likely to be the last Fed meeting chaired by Jerome Powell. Kevin Warsh, President Donald Trump’s pick to take the helm of the board when Powell’s term expires, had the first hearing last week on the road to an eventual Senate confirmation vote. And a pathway for that vote opened as the Trump administration dropped its criminal probe into Powell last week—an investigation many said was motivated by Powell’s unwillingness to lower interest rates at Trump’s request.
At his Senate hearing last week, Warsh said he was not Trump’s “sock puppet,” and the president had not forced him to pledge a rate reduction—even though Trump told CNBC that morning he would be disappointed if Warsh didn’t immediately lower rates.
STRATEGY
Businesses are looking for growth, but it’s been difficult. A new study from EY-Parthenon, exclusively shared with Forbes, shows 80% of executives find today’s environment for business growth more challenging than a year ago, and 97% have changed their growth strategies in the last year to address new external issues.
AI can be a useful tool in updating and amending this strategy in volatile times, EY-Parthenon found. And while nearly four in five executives say they expect AI to accelerate growth, only about a third trust the technology to help them make decisions that could do that.
How can leaders build that trust in AI and use it for something deeper than productivity and efficiency? EY-Parthenon suggests a broader view of how AI can help. Companies can use it to explore their own IP and data for new opportunities. It can add deeper reasoning to a wealth of business decisions—including identifying opportunities to bundle and scale goods and services, finding the right customers to target for growth, optimizing pricing, and using data to enhance planning. EY-Parthenon also suggests tapping into the power of neurosymbolic AI, combining the neural network of generative AI with a layer of rules and parameters to make decisions more transparent and auditable—providing results that both an executive and the company can trust.
POLICY + REGULATIONS
Yes, the Corporate Transparency Act still exists. The controversial law, which was passed by a veto override during Trump’s first term in 2021, requires privately owned businesses to list their beneficial owners to the Treasury Department, making it more difficult for fraud perpetrators to hide behind corporate structures. The law was challenged several times in court—and the 11th Circuit Court of Appeals ruled in December that it is constitutional—but it’s mostly being ignored right now; last March, the Treasury Department announced the CTA was only applicable to foreign companies.
Last week, Republican members of Congress took a step to completely erase the CTA from federal law, so a future president who isn’t so business-accommodating won’t be able to enforce it. The bill—called the Repealing Big Brother Overreach Act—passed the House Financial Services Committee by a vote of 26 to 25.
Larry Laubach, co-chair of the corporate practice group at law firm Cozen O’Connor, told me that he has several clients who would be subject to CTA disclosures under the law as initially passed. And while complying with the CTA was burdensome for some—especially smaller businesses, which tend not to have staff attorneys to handle the work—he’s not sure this repeal effort will have the necessary momentum to reach Trump’s desk. After all, Laubach noted, it passed out of the committee by a one-vote margin.
“My sense is CTA is not high on the list of concerns that businesses have because, again, while Trump is president. I think people don’t think that these regs are changing,” he said.
OFF THE LEDGER
How To Choose The Right Payment Tech For Your Enterprise
Matthew Davies, Bank of America head of global transaction services EMEA and global co-head of corporate sales.
Bank of America
As AI power continues to expand, a wide variety of new enterprise payment technologies are coming online. Payments are an area ripe for assistance with generative AI, but CFOs need to make the right choice to improve their operations. I spoke with Matthew Davies, Bank of America’s head of global transaction services EMEA and global co-head of corporate sales, about the most important factors to consider. This conversation has been edited for length, clarity and continuity.
When looking at payment systems, what should CFOs consider in terms of features, internal data and other systems in the enterprise?
Davies: You’ve got to come back to a very clearly defined business outcome and not just a technology solution. What I mean by that is CFOs have to begin by identifying what must improve in the finance function. Is it speed of decision making? Is it liquidity, visibility, cost efficiency, risk reduction? And then with all of those, and how much are you trying to improve? What is the defined timeframe to achieve that?
That more outcome-led approach helps to cut through a lot of the market noise and get you on a path looking at technology choices that are more anchored in tangible business impact—rather than just novelty, the shiny thing that the whole industry is talking about.
You’ve got to identify technologies that demonstrate a clear return on investment that can be demonstrated: they’re already delivering real world value, maybe for other organizations or in different operating environments. But underpinning that, you’ve also got to make sure solutions have the ability to improve data quality and standardization, because ultimately if you don’t get that done, you’re not going to get the right kind of outcomes.
You’ve got to do very disciplined and rigorous backgrounding to ensure scalability, integration and execution capability. These are very complex environments. There’s no point in finding a great solution that has the scalability [and] execution capability, but from an integration perspective isn’t going to work in the environment that you operate in.
What are common mistakes CFOs make when choosing payment tech?
If you just layer a new payment platform on top of fragmented infrastructure and system architecture without really addressing underlying data quality, standardization and issues around workflow, you end up with fragile foundations, and that is ultimately going to erode the value of anything you’re trying to do around automation or leveraging AI. You can end up actually increasing risk and complexity. It’s the age old adage of crap in, crap out. If you haven’t got good quality underlying data processes and infrastructure in place, it doesn’t matter what you put on the top. The outcome’s going to be the same. It could lull you into a false sense of security, and that is a risk.
The other common mistake is underestimating what is involved: Looking at the governance infrastructure you put around the end-to-end implementation, but also from a change management perspective from the start to the endpoint. If you start launching multiple pilots and don’t have clear success metrics, defined timelines [or] the right ownership, then you lead to stalled processes, fatigue in teams, and ultimately a poor outcome and return on investment.
What advice would you give CFOs involved in this process?
- Start the fundamentals and the technology build—and do that in the right order. CFOs should prioritize modernizing the core payment flows, standardizing data and embedding strong controls before they even think about layering on AI. Rely on the insights you’re producing and reduce—rather than amplify—risk and complexity.
- Be disciplined and outcome driven rather than reactive to the latest buzz in the market, the latest tech novelty. If you do that the right way, these investment decisions are going to be anchored in defined success metrics and measurable returns.
- Don’t change how you run the business. CFOs should focus on technologies that deliver tangible improvements. That could be around faster, better decision making; improved liquidity management; better oversight or reduction of risk.
- Once you’ve done the core foundational work, practical AI can be leveraged to automate repetitive tasks and free up finance teams, typically thinly staffed, so they can focus on judgment, strategic value creation, delivering better insights up the chain.
COMINGS + GOINGS
- Travel marketplace the Expedia Group appointed Derek Andersen as its new chief financial officer, effective May 11. Andersen steps into the role from Snap Inc. where he worked as chief financial officer, and he will succeed Scott Schenkel.
- Defense contractor Booz Allen Hamilton selected Troy Lahr to be its new executive vice president and chief financial officer, effective May 4. Lahr joins the firm from Sierra Space where he worked as chief financial officer, and he held the same role at Boeing prior to that.
- Materials solutions provider Avient promoted Giuseppe “Joe” Di Salvo to senior vice president and chief financial officer, effective June 1. Di Salvo joined the firm nearly 15 years ago, and currently works as vice president of investor relations, treasury, and financial planning and analysis. He will succeed Jamie A. Beggs.
STRATEGIES + ADVICE
Today’s news is characterized by a torrent of stories coming out of Washington, D.C. about new Trump administration policies, ideas and social media posts designed to stoke emotion—and potentially make huge changes to the status quo. But given the geopolitical environment, those stories aren’t really the biggest risk to business. The top risk is overreacting to each little development instead of looking for the broader picture and working within it.
Have you already busted all of your New Year’s resolutions for business? That’s okay—though your problem might be focusing too far ahead. Making changes to daily habits is more likely to pay off than trying to accomplish large annual goals.
QUIZ
The Justice Department charged someone last week with using confidential government information to win more than $400,000 on Polymarket bets. What did they wager on?
A. Bombing of suspected drug boats in the Caribbean
B. Criminal charges filed against Federal Reserve Board member Lisa Cook
C. Whether Eric Swalwell would resign from Congress
D. The operation to remove Nicolas Maduro from power in Venezuela
See if you got the right answer here.