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STAMFORD Conn., Oct 12, 2021

Gartner Says Nearly Half of Finance Leaders Plan to Assess Digital Currencies for Business in 2022

A September 2021 survey of 251 CFOs and other finance leaders revealed that 47% intend to assess digital currencies for business in 2022, according to Gartner, Inc. A February poll centered on bitcoin adoption showed 84% of finance leaders said they would never hold bitcoin as a corporate asset and pointed to a range of risks associated with holding the currency.

“Sentiment towards digital currencies appears to be improving among finance leaders,” said Alexander Bant, Chief of Research in the Gartner Finance practice. “As digital currencies mature and successful use cases materialize, finance leaders are looking at what their competitors are doing and whether it can be applied to their own organizations.”

Among CFOs sentiment was slightly more favorable, with 50% saying they intended to assess the risks and opportunities of digital currencies for their organization next year (see Table 1).

Table 1: Survey Responses (Q: What do you anticipate your level of personal involvement will be in assessing the risks and opportunities related to digital currencies for your company?)

 

No Involvement

Little Involvement

Some Involvement

Significant Involvement

Full Leadership

CFOs (114)

50%

22%

18%

7%

3%

All Finance Leaders (251)

53%

24%

15%

7%

2%

Note: Percentages may not add to 100 due to rounding

Source: Gartner (October 2021)

“While the actual adoption in most corporate settings may not happen right away, it’s clear that digital currencies are beginning to make finance leaders sit up and notice,” said Bant. “But interest remains tentative at this stage with around a quarter of respondents expecting their personal involvement to be quite limited and only a few percent expecting to take full leadership of digital currency initiatives.”

From the February polling data, the most noted risk was the volatility of digital currencies, and this is likely to remain a key concern as finance executives assess their merits next year.

“That equation could be altered by increased CFO concerns around inflation in more traditional currencies,” said Bant. “Some digital currencies may be seen as a viable hedge in an inflationary environment, and that in turn might lead many to consider taking payment in digital form especially considering the SEC said recently it won’t ban them as China has done.”

Bant also pointed to other potential long-term future benefits such as reduced fraud risk, improved ESG accountability, real-time transparent reporting and fast more accurate audits.

Blockchain
Digital currencies and blockchain are often incorrectly conflated as the same thing. Gartner experts advise that blockchain may be useful for organizations even when digital currencies are not. Blockchain is a digital ledger in which each cryptographically signed record contains a timestamp and reference links to previous transactions. The records on a blockchain ledger are irrevocable and are shared by all participants in a network.

“While adoption of digital currencies based on blockchain might not happen in the near future for many organizations, it’s perhaps easier to see how business blockchains shared between organizations can provide CFOs opportunities to lower operational costs and drive efficiencies,” said Bant.

Examples of areas where business blockchains could drive such improvements include:

  • Reduce Transactional Finance Costs — Streamline flows of payments to and from customers and suppliers (order-to-cash and procure-to-pay).
  • Reduce Payroll Costs — Employees over time may request compensation in bitcoin. Compensation payments to employees may become more seamless.
  • Reduce Legal Costs — Smart contracts could automate payments once an obligation is fulfilled, including providing legal proof of deed or rights.
  • Audit Supply Chain — Manage complex, fragmented, distributed supply chains across organizational and geographic boundaries, especially for fraud prevention. Verify the veracity of the origin and path of product components.
  • Managing Physical or Digital Assets — Permissioning, access and identity verification related to control of physical or digital assets.
  • Recording Internal Transactions — Help large complex organizations reconcile multiple databases intracompany and track cross-charges, providing a single source of truth.
  • Reduce Audit Costs — Used as an automated and standardized way of audit, which can minimize and mitigate the chances of any biases affecting the audit’s outcome.

Gartner clients can read more in: Quick Answer: CFO Priorities for 2022.

Non clients can learn more here: Digital Future of Finance.

CFOs and finance leaders can participate in Gartner research and get complementary access by joining the Gartner Research Circle.

About the Gartner Finance Practice

The Gartner Finance practice helps senior finance executives meet their top priorities. Gartner offers a unique breadth and depth of content to support clients’ individual success and deliver on key initiatives that cut across finance functions to drive business impact. Learn more at https://www.gartner.com/en/finance/finance-leaders. Follow Gartner for Finance on LinkedIn and Twitter using #GartnerFinance to stay ahead of the latest expert insights and key trends shaping the Finance function.

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About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s most critical priorities. To learn more, visit gartner.com.