The development of artificial intelligence (AI) is a hot topic everywhere, but what are its implications for the financial industry and consumers? We believe AI is revolutionising business finance functions, creating efficiencies, and in the process potentially making the jobs of many people redundant. But what does this mean in practice for companies today and those whose jobs will be affected? While the subject of AI is still clouded with vague phrases and general uncertainty, one thing is certain: that the AI revolution has indeed begun.
AI technology is still in its incubation phase, with current solutions only scratching the tip of the iceberg when it comes to robotic and automated capabilities. The availability, accuracy and reliability of data remains at the heart of current challenges in developing predictive models. That being said, automation is forging ahead, with a variety of tools and software already implemented across industries. This has resulted not only in the shift of individual roles within finance teams but the repositioning of the finance functions within businesses.
“Through the use of automation and AI, finance teams have the
ability to gain richer data and insights.”
Imagine the impact of unlocking data possibilities in real-time: the knowledge gained now drives a pro-active response, thereby creating efficiencies not only in data gathering, information processing and reliability testing, but also in reporting and decision-making. The lens through which we form our perspectives today shapes the outcome of tomorrow. The purpose of the finance function is evolving, with a shift from accurate accounting and compliance of financial information towards predominantly predicting trends and advising on strategic business decisions while considering key financial drivers.
In this context, the need for skilled finance professionals is crucial. This refers not only to upskilled people who have experience and are educated in AI, but also, significantly, to those who possess further key soft skills that cannot be coded into an algorithm. The powerful relationship between such individuals working in conjunction with AI technologies has the potential to revolutionise both the finance function and the organization overall.
“Key soft skills that cannot be coded into an algorithm”
Being a player in the AI revolution does not come without barriers. The investment is costly and requires a long-term commitment. Commencing this transformation will place a large focus on the business’s vision and strategy. Management needs to ensure there is a sound understanding of what the future of their business and finance team looks like and of the key drivers that will get them there. In identifying these drivers, one can pinpoint the key processes and data sets for which AI can be considered. While there will be elements of trial and error as well as learning and creativity, to ensure success, a fundamental focus must be placed on the capabilities and skills of staff, which includes upskilling where necessary.
The most common question raised is ‘What about the people employed now?’ – particularly those with limited understanding of or experience with AI technologies. Where do they fit in? The revolutionised role of individuals increasingly lies in their advisory function. It will encompass areas requiring the application of human judgement to support management’s decision-making process. It is crucial that we upskill and become more comfortable with the inseparable relationship that continues to be formed between the finance function and machines. In this way, the expected 550 to 890 million new jobs, labelled the by-products of AI innovation, can be created.
It is up to the critical thinkers who are interpreting data sets to formulate the correct conclusions and action plans. Traditional methods used by financial and business controllers often only identify problem and risk areas after the event, once it is too late and financial losses have already been realised. By using AI technologies, the insights gained from numerical data will highlight trends and emphasise key problem and risk areas well in advance. This will allow for analysis and exception-based investigations to be done sooner and for internal control processes to be monitored in greater depth, thereby allowing those with the business acumen and contextual understanding to identify, advise on and mitigate risks in advance.
AI is stirring up a range of emotions and questions. Resistance is rising because human beings are being challenged in a very large way – to upskill ourselves, our staff, our business processes and our leadership. We are being challenged not only to get started with AI, but also to keep pace with the market, to fully commit to a learning curve that will only get steeper over time. The trustworthiness of AI insights is being questioned and biases are being investigated, with full consideration of the fact that AI technologies do not pay dividends instantly. The associated risks are unknown and managing them will require skilled professionals with agility.
As the boundaries of finance functions are breaking, the importance of upskilling to remain relevant is more evident now than ever before. During this time of innovation, the rewards are expected to exponentially increase as finance functions transition from largely playing an inward-looking role in assuming a fundamental outward-looking one. It is clear that AI is the catalyst for the financial revolution. Although the learning curve is steep and the costs are high, adapting is not simply important but pivotal for the future of business. Bring the future to your organisation, now.
Author: AFA SA Insights