With financial data underpinning most business operations, how an organisation’s finance team embraces artificial intelligence will be central to how that business develops and grows. With their domain knowledge and controls-based mindset, the finance function is well placed to be an agent of change, embedding AI in the operations of the company.
In addition, finance’s experience driving change programmes as part of normal business means they are well placed to lead out this transformation. By identifying and assessing innovative technologies, modelling the potential return, and making timely investments they will improve effectiveness, increase efficiency, and enhance insight.
The CFO
The realisation that data is an asset means organisations will look to finance to prioritise business partnering as a way of sifting through that information and driving better strategic decisions. At the heart of this will be the CFO, a role that’s been changing rapidly over the past number of years. In EY survey ‘DNA of the CFO: Is the Future of Finance new technology or new people?’ 69% of global finance leaders acknowledged this change and pointed to the automation of key finance tasks as the main factor. The same report also indicated that 90% of companies worldwide are prioritising an increase in capital allocation toward digital transformation.
While traditional financial responsibilities such as bookkeeping, financial planning, risk management and reporting are still central to the role, now, CFOs are accountable for the strategic direction of the company too. Advances in technology also mean they need to be on top of all developments in data analytics and related AI technology in order to manage forecasting and predictive insights.
Use of integrated (internal and external) data models can provide real time insights and predictive scenario-based analytics which will enable more agile planning plus, as external operating conditions evolve, it also means the CFO will be better placed to deliver on the business need for more financial and non-financial information.
For the CFO, to ssuccessfully implement any new technology investments they will need to drive a robust and sustained change management programme. In particular, successfully managing a workforce that may be apprehensive will be key. To build confidence within finance teams, CFOs should consider strategies around upskilling and training, focus on value-add tasks, and most importantly addressing concerns through open and transparent communication.
On the other hand, when it comes to attracting talent, AI will be a selling point. Many early-stage accounting professionals now expect data-led technology to be the norm, so companies that are not investing in connected, data-driven, and efficient systems will struggle. Leveraging technology to reduce manual tasks also means building a more insight-driven and client-focused finance team.
The Finance Function
Perhaps no part of any enterprise has as many repetitive and routine tasks as a finance department. Inputting invoices, tracking receivables, and logging payment transactions are high-cost, low-return activities. Using AI to transform these processes can significantly reduce manual effort while increasing data quality and accuracy, freeing up employees to work on value-add strategic work. It can also increase efficiency by automating manual people-intensive finance processes, such as the order-to-cash cycle, helping to predict customer debts and improve working capital management.
Releasing the Finance team from such tasks not only helps them save time it also means they are able to drive greater impact by employing their knowledge in other areas. Accountants’ expertise, for example, in controls awareness and understanding data biases can be used to design fraud and risk detection. By using machine learning to suggest risk rules based on a company's own specific transaction and fraud data, suggestions can be made for fine-tuning the system, and the rules used to flag potentially fraudulent activity. This innate capability can also be used to serve other departments across the organisation as they seek to embrace AI.
Ultimately for finance teams, understanding the collaborative power of AI is key, enabling them to leverage its usefulness so they can carry out more strategic work. While AI can process vast amounts of data at a rapid pace it lacks the critical thinking and decision-making capabilities of people. The ability to identify and address bias in data, and core skills such as knowing the right questions to ask clients and stakeholders to understand their objectives, coupled with the knowledge of which data will serve that client best, means the finance professional has a significant role to play in this technological transformation.
The Future
But it’s not just through these current opportunities where AI has the potential to shape the finance function going forward. From automated report generation and improved forecasting, to handling compliance matters through validation of disclosures for statutory reporting, the ability to interact with the tools powered by AI will change how finance functions access and analyse data, driving better insights, and identifying more business growth opportunities.
In the future, next-generation finance centres of excellence will leverage AI and emerging technologies to deliver faster and better-integrated finance analytics and insights. These should bring advancements in areas including:
- Forecasting which, drawing on both enterprise data and sources such as customer behaviour and competitor activities, will become even more accurate
- Greater understanding of strategic risk and resilience, including data-driven early warning systems
- More connected financial reporting, driving KPIs, stakeholder management and communication across multiple channels
