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AI offers significant benefits to finance teams, but there are also risks that need to be mitigated.
The adoption of artificial intelligence (AI) continues to accelerate across a range of businesses and industries, as the latest AI in corporate reporting animation shows.
Banks are using AI for real-time identification and prevention of fraud in online banking. The AI checks the plausibility of clients’ credit card transactions in real time, compares new transactions with previous amounts and locations, and blocks them if it identifies a risk.
Technology companies employ AI to automate tasks involved in processing receipts and disbursements, from reading certificates through to approval.
AI is also proving invaluable to medical researchers trying to find a vaccine for the COVID-19 virus. Among other things, they are using AI to search thousands of research papers, and to analyze the protein structure of the virus in order to find the right components for a vaccine.
In finance, AI is being used in accounts payable and invoicing, to extract data and perform quality checks. In corporate reporting, AI can source information from the company’s public statements and facilitate fraud analytics and analysis of balance sheets and performance.
The benefits of AI include:
- Speed and efficiency: AI processing speeds are far beyond human capability, and the technology is available 24/7.
- Continuous improvement: through machine learning, AI learns and improves upon the tasks it has been asked to perform.
- Time savings: AI carries out repetitive and monotonous tasks, freeing up people to focus on activities that require judgment, creativity or deep thought.
AI can also provide valuable insights. It can process, structure and analyze large amounts of data effectively, so it comes into its own when there is too much information for a human to consider on a consistent and thorough basis.
But AI applications also come with risks that companies need to mitigate, involving compliance, technology, data and financial reporting. To help avoid these risks, businesses using AI should ask themselves a number of questions:
- How can we be sure that our AI system is performing as intended and does no harm?
- Does our AI system comply with regulatory requirements?
- What governance or control frameworks are available to assess the sufficiency and effectiveness of our AI system?
- Does our AI system have strong controls over security, availability and data confidentiality?
- Do we have stakeholder engagement across IT, risk and business teams?
By having a clear view of the governance around AI, organizations can maximize the potential of the technology and minimize the risks.
Summary
AI is increasingly being used in finance and corporate reporting. There are many advantages to the use of this technology – such as speed, efficiency and continuous improvement. But AI applications also come with risks that companies will need to mitigate.
How EY can help
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AI will be a vital tool in the next generation of company key performance indicators involving trust, culture and ESG risks. Learn more.
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