What’s on the priority list for California finance leaders?
The California economy is forecasted to outperform the national average in the months ahead,1 but businesses still face immense uncertainty. The economic outlook is unclear; geopolitical tension continues to simmer; and new technologies emerge with disruptive potential. Many of the state’s technology businesses were also disproportionately impacted by the failure of Silicon Valley Bank in March 2023.
We surveyed 143 California-based finance leaders to learn what this means for finance leaders. Have their plans, perception of risk and attitudes about topics such as ESG and digital transformation changed? And are they any different from finance leaders in other states?
Here are the key findings.
1. Soaring prices are the number one business risk.
Finance leaders say high inflation is their top business risk. Half of respondents say this is a major risk, compared with just 36% outside the state. Talent shortages and the pace of technology rank second and third.
2. Cutting costs is the top priority.
Cutting costs within the finance function is finance leaders’ top priority. Unlike in other states, they plan to do it through a range of options including workforce restructuring, outsourcing, discontinuing low-margin business lines and investing in new technology.
- 40% plan to restructure the workforce, compared with 33% outside the state.
- 27% will reduce office/real estate costs, compared with 19% outside the state.
3. Innovation continues to be a focus.
California-based finance leaders are more likely than their counterparts elsewhere to continue with innovative plans that contribute to long-term growth and transformation. For example, 46% are exploring and reviewing new technologies, compared with 34% in other states.
4. They are leading on digital payments.
California businesses are ahead when it comes to using digital payments. More than half (54%) of finance leaders currently use B2C platforms such as Zelle® and Venmo®, compared with 43% elsewhere. And, 65% of California businesses are planning to use instant payments within the next two years through the RTP® network and the FedNow® Service, compared with 41% today.