Plus: Why 97% Of Companies Aren't Ready For M&A |
| In a time when costs, consumer behavior and tariffs are unpredictable, businesses want to hold on to every cent they earn. However, a new study from TransUnion found that U.S. companies are losing close to 10% of their annual revenues to fraud, a 46% increase from fraud losses in 2024. Combined, the 200 U.S. businesses TransUnion surveyed for this study lost a total of $114 billion. Bad actors are using several methods to steal from companies. An account takeover—in which an unauthorized person signs in using another person’s account credentials—was responsible for nearly a third of the fraud. Synthetic identity fraud—in which someone uses a combination of personal information to create a false login—and scams—when a person is tricked into providing information for someone to access their account—are each responsible for just under a fourth of all fraud. “Fraudsters are exploiting every digital touchpoint, from account creation to login and transaction,” said Steve Yin, global head of fraud at TransUnion. “The financial impact is staggering, and organizations must rethink how they verify identity and secure customer interactions.” These increases aren’t necessarily due to businesses not being careful. Bad actors are doing more to break into accounts. More than half of U.S. consumers reported being targeted by phishing and smishing—text-message-based—schemes in the last year. And the number of data breaches in the first half of 2025 is 83% higher than the first part of 2024—though on average fewer people’s credentials are stolen in each of these incidents. It’s incumbent on businesses to remain vigilant in verifying account access and preventing fraud. While the easily hacked username and password is still the most common primary method for authentication in the U.S., more secure biometric authentication is close behind it, increasing by 42% since 2024. More businesses are requiring secondary authentication, with 29% using one-time passcodes and 25% using an authenticator app. It’s especially important for the finance department to work with the CIO’s office on security. With large amounts of revenue being stolen due to fraud, CFOs are seeing the costs of insufficient cybersecurity firsthand. But they can also better determine the best level of investment in cybersecurity platforms and training to help safeguard revenues. Cybersecurity systems are key, but they aren’t the only place where the CFO should use technology to better organize and coordinate business operations. A new study from Diligent Institute, Oracle NetSuite, Wilson Sonsini, the CFO Alliance and the CFO Leadership Council found that 97% of companies aren’t ready for an M&A transaction, and that’s largely because their technology isn’t quite ready. I talked to Diligent Institute Executive Director Dottie Schindlinger about why. An excerpt from our conversation is later in this newsletter.
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Until next time. |
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| In today’s CFO newsletter: |
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| Nearly two weeks after the federal government shutdown began, it’s still dragging on. An eighth vote on ending the shutdown is scheduled for later today in the U.S. Senate, but it’s nearly certain to fail. It’s unclear how long it will stretch on, especially since negotiations over healthcare funding—the issue central to the shutdown—have not been taking place between Republicans and Democrats. The shutdown has prevented the release of federal government job and economic data, but banks, research firms, associations, businesses and universities have filled in with the data they have collected—and most of it isn’t optimistic. Forbes’ Ty Roush writes that the Carlyle Group estimates 17,000 non-farm jobs were added last month, fewer than the 22,000 reported by the Bureau of Labor Statistics in August. While other analysts projected more new jobs—Goldman Sachs reported 80,000 were reported and Revelio Labs reported 60,000—all agreed that the market was loosening. Outplacement firm Challenger, Gray & Christmas reported an overall 58% decline in new hires compared with 2024, and ADP saw private sector payrolls decrease by 32,000 last month. Consumer sentiment is also down, according to the University of Michigan’s long-running monthly survey. The historical benchmark is 100, and September’s sentiment fell to 55, slightly below August’s 55.1 ranking and 22% lower than how consumers felt a year ago. Survey director Joanne Hsu wrote that last month showed improvements in current personal finances and year-ahead business conditions, but expectations for their future finances, high prices and weakening job prospects are at the forefront of their minds. Interviews show little evidence that the ongoing government shutdown is not impacting the view of the economy. Outside of employment figures, prices of silver and gold are skyrocketing. Precious metals are often viewed as safe haven investments in times of economic uncertainty. Silver’s price is up almost 78% this year alone, hitting a record high of $52.25 per ounce of spot silver on Monday. Gold surpassed the record high of $4,000 a troy ounce last Tuesday, and it’s largely stayed above that mark in the last week. |
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| Another set of new tariffs could be on the way—and not just the 10% to 50% tariffs on foreign wood products and furniture that took effect at midnight. Last week, Chinese officials announced foreign companies will be required to receive government approval to export products with rare earth minerals. They also announced restrictions on lithium batteries and some graphite exports. China processes 90% of all rare earth metals, and President Donald Trump attacked China, saying on Truth Social that it was a “rather sinister and hostile move” from the country. The threat sent the stock market down. Then after markets closed on Friday, Trump decreed that the U.S. would impose new 100% tariffs against China starting on November 1, or potentially sooner. These tariffs would be in addition to any others being paid by Chinese companies. Stocks slowly picked back up over the weekend as Trump softened his tone on China, with premarket trading edging up at least 1% on the major stock indexes by Monday morning. Trump said on Truth Social that Chinese President Xi Jinping had a “bad moment,” and Vice President JD Vance said on a Sunday morning interview on Fox News that the latest tariff threat was a negotiating tactic. However, no negotiations seem to have taken place just yet, and China and the U.S. began charging new per-ton fees on cargo ships entering each others’ ports on Tuesday. The new fees—which had been announced earlier this year—caused rare earth stocks to plummet, and U.S. markets on the whole fell again with them. |
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| With negotiations in Washington effectively at a standstill, the federal government shutdown has halted funding to all government operations, aside from those deemed essential. The IRS used money that was already allocated through the Biden-era Inflation Reduction Act to stay open for the first five days of the shutdown, but now about half of its employees are furloughed, writes Forbes’ Kelly Phillips Erb. Most taxpayer services are halted or delayed in the shutdown. Top officials at the IRS, staff that ensures statutory deadlines are met, and the communications and liaison office are still working. Any forms and payments that are due on October 15 are still due, and payments that are scheduled to be made are also still expected. And several positions in the Large Business and International Division, as well as in the Small Business/Self Employed Division are still on the job. |
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 | | Diligent Institute Executive Director Dottie Schindlinger. Diligent Institute, Getty Images |
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| | | Why 97% Of Companies Aren’t Internally Ready For M&A |
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| Nearly half of companies are prioritizing M&A as part of their growth strategies, but a survey and research collaboration between Diligent Institute, Oracle NetSuite, Wilson Sonsini, the CFO Alliance and the CFO Leadership Council found that the overwhelming majority—97%—are not ready to move forward with a transaction. I spoke with Diligent Institute Executive Director Dottie Schindlinger about why this is and what companies can do to improve their readiness. This conversation has been edited for length, clarity and continuity. What do you think contributed to companies’ limited readiness internally for transactions? Schindlinger: What we noticed was that only 4% of the respondents say that they have an integrated approach. They don’t have an integrated governance, risk and compliance and financial system that shares data seamlessly and pulls it all together into one view. That’s a huge problem: If you don’t have legal ability to quickly see what’s happening with finance, and finance being able to see quickly what’s happening with IT, or third-party risk going through a transaction, it becomes more complicated and often more prone to error, especially if you have things being tracked in manual systems like spreadsheets. Those things are not talking to anything else, so it becomes really challenging. If you pile on top of that the fact that only 5% are using any AI in any part of this process, there’s another big opportunity. Let’s say that you don’t have a fully integrated GRC system. One potential remedy is to use generative AI to help you source data, and many are not even doing that. Because of what they cite is their biggest challenge—lack of resources—maybe they’re not resourcing appropriately. For a lot of companies, when they get ready to go through a transaction, they’re really focused on that event. They’re doing the due diligence on the company. They’re trying to figure out is this the right move for us? Is this the right timing for us? They may be not spending enough energy looking internally to say: Are we ready for this? Do we have all of our ducks in a row? What’s going to be the impact on our operations and business opportunities if we go through this transaction at this time? The big aha of this report is that if there’s any place you’re going to spend some time right now, figure out: Are you ready for a transaction, so that when a transaction seems like it’s a good opportunity, you can jump. I think what happens is people wait for the opportunity, jump and then realize too late we weren’t ready. Then it causes lots of downstream problems. How did finance departments get so behind? We’ve seen a lot of new technology in the last few years, and everybody’s adopting AI throughout the enterprise. Did finance get left out of the loop? I think it’s more so [that when] you think about a company, they’re very focused on growth: How can we grow at an appropriate rate? How do we retain customers? How do we think about our strategy as things change on the ground? How do we think about staying up with our competitors? What about our supply chain? They’re looking at the day-to-day business, and they’re trying to figure out where do we need to invest our time and energy? That’s what everybody wants them to do. Investors want them to do that. It’s not as exciting to invest time on: How do we make sure our data talks to each other, and how do we make sure that we know that we’re all looking at the same dials? That’s not as exciting. It doesn’t necessarily directly equate to growth, so sometimes it’s hard to prioritize. It’s a little bit like when the doctor tells you to eat better and exercise. These things are really important, but you might want to prioritize that second piece of cake. Companies are that way. They’re made up of people, and so it often can be a little bit more palatable to focus on growth and the next big thing we need to chase. And then here comes an opportunity for a transaction. Let’s do it whether or not we’re ready. That’s why it’s hard. It’s harder sometimes to prioritize eating right and doing the exercise. What advice would you give a CFO right now to get ready for transactions? Get familiar with governance, risk and compliance tools. There are great tools on the market to help you do this better, and that will help you have a much broader perspective on all the things you need to be thinking about to get ready for a transaction. I’ll give an example. We’re going through an acquisition process. Finance teams are really good at doing the financial due diligence, figuring out where’s the potential risk, what are all the liabilities involved? Are they as good at figuring out the cybersecurity risk? The culture risk? Those often are the kinds of things that really can derail a deal. The human talent risk piece is big. If finance teams are leading the charge, do they have information available to them to help them understand the risk? They’re looking at the whole risk heat map. They need to have that on the map. If you have a good GRC tool in place, it can really help you to see that much more complete picture, to really understand not just the financial picture, but the whole picture. This acquired entity, how is it going to fit within the structure of our organization? What’s it going to do to our existing team? What’s going to happen to the team that we’re acquiring? What’s going to happen to the tech, the products, the inventory we're acquiring? What a risk are we acquiring? Finance teams are going to continue to lead the charge. Having these kinds of tools will give them that much clearer picture. |
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Food and beverage giant PepsiCo appointed Steve Schmitt as its new executive vice president and chief financial officer, effective November 10. Schmitt joins the company from Walmart U.S., where he served as executive vice president and chief financial officer. He will succeed Jamie Caulfield, who will transition to an advisory role before retiring after more than 30 years with the firm.
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Food and beverage firm Campbell’s tapped Todd Cunfer as its executive vice president and chief financial officer, effective October 20. Cunfer joins Campbell’s from Freshpet where he served as CFO, and he will succeed Carrie Anderson, who is leaving the company.
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Composite decking manufacturer Trex named Prithvi S. Gandhi as its senior vice president and chief financial officer, effective October 6. Gandhi most recently worked as the executive vice president and chief financial officer of Beacon Roofing Supply.
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| Send us C-suite transition news at forbescsuite@forbes.com. |
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| Spreadsheets are great for organizing data, but they’re not the best way to convey a strategy. Storytelling and narrative framing are the way to communicate a strategy to others, and they will be more able to take the message to heart and move it forward. Surveys today show that many people don’t trust or admire leaders, but the reality is that now is a time that strong and purposeful leaders are needed. Here are four ways you can show you are an impactful, effective and trustworthy leader. |
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| | Which company saw its stock surge this week with rumors that it could be taken private? | | A. | Snap | | B. | Vimeo | | C. | Upstream Bio | | D. | Grindr |
| | Check if you got it right here. |
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