Tim Wakeford, VP for Financial Product Strategy, EMEA at Workday
There are a lot of scary statistics highlighting the potential risks of artificial intelligence (AI) and automation – especially when it comes to the job market. For example, a recent report by PwCpredicted that a third of jobs in the financial sector are under threat due to advances in AI and automation. Furthermore, research by Opimas estimated that a staggering 230,000 finance jobs could disappear by 2025 as AI continues to automate routine processes.
There is no doubt that the finance industry is in a period of technological transformation. However, instead of viewing these emerging technologies as a threat, it is far more productive to view them as massive opportunity for the finance team to add strategic value to the business as a whole. In fact, forward-thinking finance teams that strive to use the latest tools, applications and workflow processes will have the means at its disposal to be the strategic business partner that every CEO needs.
The business case for AI in finance
Focusing solely on the potential risks of AI eclipses the massive opportunity it offers finance teams – improving efficiency and reducing the burden of menial tasks.
In fact, an EY study “Is the future of finance new technology or new people?” revealed that 65% of finance leaders consider having agile and automated processes to be a significant priority. Additionally, 67% of finance leaders think that improving the partnership between the finance function and the business as a whole is also a key objective and one of the major drivers fueling investment in AI and automation.
“Where once [finance’s] remit was predominantly that of a reporting function that focused on balancing the books, it will become a data-driven decision-centre,” concludes the EY study. “Technology will play an increasingly significant role in executing many traditional finance tasks while at the same time generating greater insight. Meanwhile, finance people will spend a greater proportion of their time working with colleagues across the organisation to make decisions in support of the strategy.”
From number crunching to business strategy
Traditionally, the finance team has spent a large proportion of its time and effort on activities such as transaction processing and audit and compliance. However, automation and AI promises to free up finance professionals from such repetitive work. In turn, this will allow finance professionals to focus on strategic activities that will drive value for their organisation.
Making the best use of the various tools, apps and workflow efficiencies that AI and automation offers will mean that the finance team can shift their focus from number crunching and auditing to financial analytics and data-driven forecasting. Using AI, for instance, can help to accurately model a business’s strategic risk and resilience and to generally improve overall data-driven financial management.
Indeed, it’s easy to argue that spending an inordinate amount of time on these activities is what has prevented finance teams from reaching their full potential as strategic business partners in the past. Investment in and adoption of AI and automation needs to remove the repetitive manual tasks that the finance team has historically spent most of its time dealing with, and help that same team to become a far more strategic, efficient and skilled element of the entire business.
The balancing act
AI and automation offers finance professionals the opportunity to process vast amounts of data much faster and at a much lower cost than ever before. However, there are a few ‘housekeeping jobs’ that finance leaders need to consider before they rush into adopting the latest technologies, including AI. This is not a simple ‘rip and replace’ task, and there is a far more complex and complicated transition process at play here.
CFOs will need to examine where the best opportunities for automation are, identifying which tasks are eating up valuable resources and slowing down operations. Once key processes are automated, finance leaders will then need to develop structured analytics and centralise all data processes, to prepare their finance team for the AI era.
This is exactly where CFOs need to perform a delicate balancing act between using the most-skilled employees alongside the latest technologies that are most in-line with the longer-term strategic aims of the business.After all, the success of any technology largely depends on two things: the quality and reliability of the data you are using, along with the drive and skills of the people that will be using it.
The age of AI is upon us, offering immense opportunities to nurture a far more strategic and valuable finance function. Ensuring the best use of emerging AI technologies will enable finance to focus on higher-value skills, helping to achieve the longer-term strategic aims of the business as a whole. To succeed in today’s AI era, finance leaders will need to strike the balance between emerging technologies and an organisation’s most important asset — its people. This is going to be the real key for the future of finance.