CFOs and tax leaders optimistic about transformative power of GenAI amid rising cost and regulatory challenges, survey finds

• 87% of CFOs and tax leaders surveyed believe generative AI (GenAI) will drive efficiency and effectiveness, up from 15% a year ago.
• Cost pressures identified as the biggest challenge for the first time in survey history.
• The struggle to retain and deploy tax and finance talent is peaking.

The latest EY Tax and Finance Operations (TFO) Survey finds generative AI (GenAI) will help transform tax and finance functions, helping to address inefficiencies, talent shortages, and compliance with emerging reporting obligations, including those related to global minimum taxes. But while almost nine in 10 (87%) chief financial officers (CFOs) and tax leaders say GenAI will drive increased efficiency and effectiveness, up from 15% in 2023, three in four (75%) say they are only in the early stages of their GenAI journey.

The 2024 survey – which gathered insights from 1,600 CFOs and tax professionals across 32 jurisdictions and 18 industries – concludes tax and finance functions will need to transform to contend with growing cost pressures, a talent deficit, and compliance with new tax regulations.

Marna Ricker, EY Global Vice Chair – Tax, says:

“GenAI is already revolutionizing the tax and finance industry by helping manage complex reporting tasks and large amounts of data. It’s empowering tax professionals to have a transformative mindset, allowing them to be more efficient, focus on more strategic tasks and make better decisions. This will, in turn, unlock value for their organizations. While the survey indicates that many leaders are still grappling with how best to take advantage of the technology, now is the time to future-proof the tax function by developing a plan to integrate GenAI responsibly and with confidence.”

Cost is now the biggest barrier to achieving vision and purpose

For the first time in the six-year history of the survey, cost pressures emerge as the top concern for respondents, with cumulative cost-cutting and inflation significantly eroding tax and finance functions’ budgets in real terms. Almost half (49%) of respondents say effectively managing budgets is their top priority and 86% are looking to cut costs.

Regulatory and reporting pressures drive need for data and tech transformation

The survey further highlights that tax functions face an increasing urgency to manage more complex and data-heavy tax responsibilities. This includes real-time digital tax filings and e-invoicing soon to be required in nearly 100 countries. These obligations also include complying with the adoption of recommendations by the OECD, such as Pillar Two of the base erosion and profit shifting project (BEPS 2.0), which urges countries to set global minimum tax of at least 15% for large corporations. Forty-two percent of organizations anticipate a considerable number of adjustments to source Pillar Two reporting data, and 82% expect to make moderate to significant changes to their reporting processes.

Dave Helmer, EY Global Tax and Finance Operate Leader, says:

“Mounting regulatory and reporting pressures continue to be a strain for tax and finance functions and businesses are struggling to put the right data and technology in place to address these challenges. Data re-use and intelligent agents are a powerful solution to make that and much more happen.”

Talent pressures on tax and finance functions approach crisis levels

The talent gap is now a critical challenge, with seven in ten (70%) tax and finance leaders feeling the impact of fewer accountants entering the profession while senior cohorts retire. More than half (53%) say they are struggling to retain and attract qualified people. The survey further reports that 62% believe that employees without a university degree are an increasingly important source of talent. 

Helmer says: “The talent gap has reached crisis proportions. Employees are being called on to do more with less, but businesses also want tax professionals to spend twice as much time on strategic tasks than they do on routine work. To facilitate this, many businesses are looking to co-source as a solution, particularly with the budget constraints and the need to invest in technology and GenAI.”

More than half of respondents (55%) say GenAI won’t lead to a reduction in the tax function workforce. Instead, companies will reallocate their tax and finance employees’ time to more strategic, high-value activities and away from routine compliance tasks.