The CFO’s paradox: Playing it safe is now the riskiest move

The greatest risk facing chief financial officers (CFOs) today is not mismanaging capital - it is refusing to take risks. For decades, CFOs were defined by stewardship - keeping costs in check, ensuring compliance, and safeguarding balance sheets. That narrow definition no longer applies. In a business environment shaped by digital disruption; environmental, social and governance (ESG) imperatives; volatile markets and shifting customer expectations, the traditional CFO has become obsolete, with the role evolving from steward of financials to architect of value creation.

This is especially true in Singapore. As one of Asia's most exposed economies - open to global trade, reliant on complex supply chains, and governed by sophisticated regulations - Singapore demands a new kind of finance leadership.

Success for CFOs is no longer just measured by cost control. The differentiator is how capital is channelled into innovation and digital capabilities. That means embracing automation and artificial intelligence (Al) as core infrastructure, not add-ons. It also means eliminating the red tape that slows down finance. Processes such as manual reconciliations, duplicate approvals, and outdated workflows can hold finance back - removing them turns it into a driver of transformation.

Al as a catalyst for finance

That insight alone is insufficient - CFOs now require the speed and precision that advanced technology provides. Al is already reshaping finance by streamlining transactions, simplifying expense management, and enhancing fraud detection and compliance. It is also improving forecasting, enabling richer scenario planning, and generating management reports near real-time, instead of days.

This also means the modern CFO can no longer operate from the side-lines. They must embed themselves deeply across the business, working with commercial, operations and technology leaders to connect financial discipline with real-world execution. Only by understanding the organisation end-to-end can finance deliver meaningful value.

Singapore's leaders have made it clear that this transformation is not optional. In his National Day Rally, Prime Minister Lawrence Wong underscored Al as central to the nation's economic future. For CFOs, the mandate is direct: financial strategy must keep pace with this national agenda by embedding Al as an enterprise-wide capability.

The biggest challenges to adoption, however, are rarely technical. Many finance professionals resist automation out of fear - a reluctance to trust systems they do not fully understand. This is where CFOs must step up, not by delegating Al to IT or analysts, but by learning the systems themselves and leading by example.

Just as importantly, they must balance short-term efficiency gains with longer-term transformation. Too often, organisations dive into Al without a clear return on investment (ROI) framework or long-term vision. When "immediate" returns fail to materialise, adoption stalls. CFOs can prevent this by setting realistic milestones, linking Al to enterprise strategy, and reinforcing that transformation is a marathon, not a sprint.

With routine processes automated, finance leaders can redirect their focus to shaping enterprise strategy, optimising capital, and steering performance. Their expertise in risk and controls also positions them to guide the conversation on responsible Al - a responsibility that will only grow in the coming years.

Conservatism as a liability in insurance

The insurance sector presents an excellent microcosm of the risks of conservatism. Long valued for stability, the sector has traditionally operated with a conservative approach. That caution built resilience, but may hinder agility in today's market.

Many insurers remain tied down by legacy systems, slow-moving cultures, and an instinct to preserve the status quo. Yet pressures are intensifying. Market volatility, interest rate shifts and rising reinsurance costs demand faster, bolder decisions. Caution no longer preserves stability; it risks paralysis.

Insurance CFOs are uniquely positioned to break this cycle. With their line of sight across capital, compliance, and operations, they can push organisations beyond risk aversion. Regulatory requirements - whether solvency reporting or ESG disclosures - should not be seen as burdens but reframed as opportunities to innovate. Companies that wait until mandates force action are already too late.

This lesson extends beyond insurance. Banking, logistics, and energy face similar pressures. What once acted as a shield now risks becoming a drag. CFOs, with their vantage point across the enterprise, have both the authority and responsibility to move their organisations past fear of change.

Finance as a transformation engine

To lead transformation externally, CFOs must first transform finance internally. That means rethinking how teams are structured, how decisions are made, and how culture is shaped. Scenario planning can no longer rely on static budgets; it must be dynamic, with rolling forecasts that reflect shifting realities. Cross-functional capital planning is an absolute necessity to move resources quickly to where they matter most.

Streamlining legacy processes and eliminating redundant ones is equally important. Doing so frees up capacity for value creation, shifting finance from administration to a strategic engine for growth.

And this is as much a cultural challenge as an operational one. CFOs must build teams comfortable experimenting, adopting new tools, and taking risks. Changing culture is often the hardest part of transformation, but also the most decisive.

The riskiest move is playing it safe

In today's volatile and fast-changing business environment, CFOs need to be bolder. Incremental change may feel comfortable, but it cannot keep pace with disruption. The real risk lies in waiting for certainty that will never come.

For Singapore's CFOs, the stakes are especially high. Operating in one of Asia's most competitive and connected markets, they have both the platform and the responsibility to show what bold, disciplined transformation looks like.

The future will not reward hesitation. It will reward clarity, conviction, and agility.

Finance leaders who thrive will be those prepared to move before conditions are perfect, guiding their organisations with confidence through uncertainty.

The mandate is clear: CFOs must be more willing to take risks. Not doing so is the riskiest play of all.

The article was contributed by Chock Ker Ching, CFO, MSIG Singapore and was published in The Edge Singapore on 24 October 2025.