In the realm of finance, a significant deficit of expertise looms large. The question then arises: how pivotal is the integration of automation and artificial intelligence in this scenario?
A recent inquiry by Avalara unearthed a startling fact: 84% of Chief Financial Officers (CFOs) in the USA and UK are embroiled in a battle against a marked paucity of adept individuals in their financial and accounting divisions.
This shortfall of talent, as concurred by numerous connoisseurs, stems from an amalgamation of causes: an uptick in retirements coupled with a dwindling influx of new entrants into the field. Concurrently, CFOs are beleaguered by the specter of an erratic economy and the imperative of cost reduction. Echoing this sentiment, the survey revealed that half of the CFOs are bracing for a recession, adopting austerity measures in anticipation of fiscal turbulence.
Thus, besieged by a leaner workforce and escalating demands, CFOs are pondering over the role of technological advancements in buttressing their teams and augmenting operational scale.
Financial Guides See AI as a Panacea for Their Dilemmas
The study indicates a near-unanimous consensus among CFOs (92%) that AI instruments will propel efficiency, enhance productivity, and boost profitability. This belief is not merely theoretical; a whopping 89% are poised to channel investments into AI for their financial squads, with 44% planning to do so before the curtain falls on 2023.
The proclivity of CFOs towards AI is not entirely unforeseen. Many have already harnessed automation tools to alleviate their teams from the drudgery of essential yet monotonous tasks, like managing accounts payable and adhering to tax regulations. Indeed, many domains within finance that currently utilize robotic process automation (RPA) are ripe for AI-enhanced optimization.
Presently, RPA finds application across various financial functions, from the generation of fiscal reports to the automation of financial analysis and forecasting. With AI, sophisticated language models can enhance RPA-driven automation by deciphering intricate patterns in historical financial data, thereby refining predictions about future economic trends and more. AI’s utility extends to creating synthetic models of fraudulent transactions, aiding in the detection of financial malfeasance.
The survey highlighted that 81% of CFOs face a dearth in accounting roles, while 49% report shortages in financial planning and analysis (FP&A) positions. In light of the aforementioned examples, AI emerges as a formidable ally for smaller teams, enabling them to leap ahead in reporting, delve deeper into analytics for informed decision-making, and more.
Strategies for Finance Leaders to Embrace Automation and AI
As per the survey’s findings, 56% of CFOs intend to collaborate with internal tech teams and external AI providers for AI technology assimilation. Successful deployment of such technologies demands a symbiotic relationship and endorsement from tech teams.
Tech squads can endow finance leaders with the necessary analytics, reporting, and visualization tools for judicious AI adoption decisions. A key aspect of this process involves a comprehensive grasp of existing legacy systems, their potential obsolescence, and integration capabilities with AI. The primary value AI offers lies in its ability to inject intelligence and expediency into operations driven by other technologies. Therefore, if legacy systems are incompatible with AI inputs, the organization stands to lose significant value. Above all, technology teams serve as sage advisors to finance chiefs, courtesy of their insight into burgeoning technologies like AI.
AI and automation aren’t meant to usurp human roles in finance, a field where trust is paramount. Given the highly regulated and critical nature of finance, human oversight remains indispensable for processing, interpreting, and decision-making based on data derived from technology.
Nevertheless, as teams shrink and cost-cutting pressures mount, AI and automation emerge as essential tools to supplement and empower finance teams. AI can relieve them of laborious tasks such as tax compliance or enhance complex monitoring functions like fraud detection, thereby freeing humans to concentrate on high-value financial tasks and make more informed decisions.
For instance, AI is ideally suited for financial planning. Algorithms can swiftly sift through historical financial data, market trends, and economic indicators to craft personalized forecasting documents. These can offer initial insights to expedite decision-making processes. The potential benefits of AI are vast, positioning it as a catalyst for creating the most efficient and effective finance teams the business world has ever witnessed.
