The finance function has a key role to play in embedding AI into a company’s operations now and in the future, writes Katie Burns
With financial data underpinning most business operations, how an organisation’s finance team embraces artificial intelligence (AI) 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 artificial intelligence into the operations of the wider company.
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 this information and driving better strategic decisions.
At the heart of this will be the Chief Financial Officer (CFO), whose role has undergone rapid change in recent years.
In the EY survey ‘DNA of the CFO: Is the future of finance new technology or new people?’, 69 percent of global finance leaders acknowledged this change and pointed to the automation of key finance tasks as the main factor driving the trend.
The same report also indicated that 90 percent of companies worldwide are prioritising capital investment in digital transformation.
While traditional financial responsibilities such as bookkeeping, financial planning, risk management and reporting are still central to the role, CFOs are now also accountable for the strategic direction of the company.
Advances in technology mean they need to be on top of all developments in data analytics and related AI technology to manage forecasting and predictive insights.
The use of integrated (internal and external) data models can provide real-time insights and predictive scenario-based analytics, which will enable more agile planning. As external operating conditions evolve, CFOs will also be better placed to deliver on the business need for more financial and non-financial information.
For the CFO to successfully implement new technology, they will need to drive a robust and sustained change management programme – in particular, successfully managing a workforce that may be apprehensive.
To build confidence within finance teams, CFOs should consider strategies for upskilling and training, focusing on tasks that add value, 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, 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.
Releasing the finance team from such tasks not only helps them to 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 does not have the same critical thinking and decision-making capabilities as people.
People have the ability to identify and address bias in data and core skills. They know the right questions to ask to help understand a client’s requirements, and which data will serve that client best. This means financial professionals have an important role to play in technological transformation.
The future
It’s not just through these current opportunities that AI has the potential to shape the finance function in the future, however.
From automated report generation and improved forecasting to handling compliance matters through validation of disclosures for statutory reporting, the ability to interact with tools powered by AI will change how finance teams access and analyse data, driving better insights and potentially enabling them to identify 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. Potential advancements here include:
- More accurate forecasting drawing on both enterprise data and sources, such as customer behaviour and competitor activities;
- a greater understanding of strategic risk and resilience, including data-driven early warning systems; and
- more connected financial reporting, driving KPIs, stakeholder management and communication across multiple channels.
When it comes to the more challenging aspects of developing a clear AI strategy and ensuring that organisations have the necessary capability, technology and stakeholder buy-in, the CFO will play a central role by empowering the finance team to make even better data-driven decisions and, in turn, positioning them as key drivers of the overall business strategy.
Katie Burns is a Consulting Partner at EY Ireland
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