Knowledge of artificial intelligence (AI) is quickly becoming a standard part of the finance professional’s toolkit.
In July, information and analytics company Lexis Nexis released its Future of Work Report 2024, a survey of professionals, including those working in finance. The report found there has been a shift in acceptance of AI technology. Sixty-eight per cent of those surveyed are either using or plan to use generative AI tools for work purposes (70% for personal use). Furthermore, 72% anticipate a positive impact from generative AI and only 4% see it as a threat to job security.
In a recent FM interview, Evangelos Kontogiorgis, ACMA, CGMA, head of corporate audit for Coca-Cola HBC AG in Athens, set out five areas of action for finance leaders to capitalise on the benefits of AI technology and tackle its challenges. Kontogiorgis is a speaker at the AICPA & CIMA ENGAGE CFO Strategy & Innovation Summit in Warsaw on 22 October.
Recognise the possibilities
AI and automation tools can transform an organisation. Some key benefits include:
- Advanced technologies make it possible to process vast amounts of information rapidly and generate insightful analysis. As a result, decisions based on these solutions can be more data-driven and higher-quality, Kontogiorgis said.
- AI and automation can release finance team members from lengthy hours spent on routine, transactional activities, enabling them to take on more value-added and challenging but rewarding projects.
- Kontogiorgis noted that AI can be used to extract valuable information and insights from a company’s data. For example, insights from internal transactions with customers, along with easily accessible external data at low or no cost, can help identify areas to increase the frequency of sales teams’ visits or focus marketing spend to increase revenue.
- AI can improve governance. It can easily recognise patterns and thereby detect anomalies deep within data, making it possible to spot fraud before it happens.
Focus on data quality, reliability, and privacy
One key challenge for finance teams is the need for absolute data integrity when AI-processed data is used to generate transactions and potential journal entries.
Data can enhance decision-making, but only if it is accurate, complete, and not subject to manipulation or error. “There must be total clarity to ensure that these tools generate data that we can trace and validate,” Kontogiorgis said.
Finance should be prepared to address AI’s “black box” problem. There is often a lack of visibility into an AI tool’s workings, making it difficult or impossible to determine how it makes decisions. In addition, finance must also monitor and curate processes to confirm that the data going into the system is reliable and can produce quality outputs, he said.
Data privacy is another critical consideration, since data may be processed or archived in locations that are not within the organisation’s oversight. Kontogiorgis mentioned that compliance with regulations, such as the EU’s General Data Protection Regulation, will make it more challenging to ensure organisations can demonstrate how they process and maintain data in an AI environment.
Upskill employees
Organisations will not reap the benefits of new technologies if they don’t invest in upgrading their people’s digital capabilities, Kontogiorgis suggested.
Upskilling the organisation’s technology expertise is critical not only for steps such as maintaining data quality but also in making the best use of new technologies.
Given the complexities of advanced systems, existing finance team members may not have the requisite expertise to understand new technologies or maximise their potential. But this expertise is so critical that 66% of organisational leaders said they wouldn’t hire someone without AI skills, according to a global study by Microsoft and LinkedIn, and hiring of technical AI talent has jumped 323% in the past eight years.
Training and development plans should include an assessment of whether current staff roles still provide value or will need to be redefined. To address this issue, an organisation may develop training internally using its own resources, or it may be better served by partnering with an expert company that offers training in data analytics, AI, or other technologies, Kontogiorgis suggested.
Develop a rigorous tech selection and evaluation process
AI or automation tools can require significant investment, so businesses should take steps to ensure they choose technologies best suited to their needs and capabilities and that they can deploy these tools correctly and effectively. Kontogiorgis recommended starting small by piloting one solution and scaling up only if the organisation derives significant benefits from it.
Keep in mind, too, that because of the complexity involved, it’s unlikely that most companies will be able to achieve digital transformation on their own. Kontogiorgis suggested that, instead of starting from scratch, organisations should consider partnering with large technology companies or consulting firms that have already developed proven solutions and business cases.
Finance leaders can also quantify the value of digital transformation. “That is a core role for finance,” Kontogiorgis said. Finance teams can determine the value of technology investments before they are made, making it easier to pick the best choice.
They can also advocate for a budget that allows for experimentation to determine which technologies will best suit the company. That may include allowing their teams to explore use cases that serve as learning experiences without ultimately providing any further value.
Steer change
Organisations and their people have been experiencing significant technology and workplace change in recent years. That means that change management will be a top consideration for companies.
“Many companies are working on use cases and disruptive new tools,” Kontogiorgis said. As a result, businesses will have to change their culture to adopt different work processes and approaches. The work of many finance functions has already been transformed in recent years, he said, so finance team members are well suited to become digital champions and promote acceptance of new tools.
Finance leaders can steer change management efforts and model the required agility and adaptability. To do so, they will have to be open to new ideas and ready to develop new skills. They will also need the emotional intelligence to understand and inspire those who are uncomfortable with new technologies and communicate the potential and value in terms that make sense for nontechnical professionals.
Kontogiorgis believes that the human touch will always be important in organisations and that new tools will complement and accelerate employees’ existing abilities. “Our empathy and the ability to create relationships as we interact with others throughout the organisation during a time of transformation will be extremely important,” he said.
— Anita Dennis is a freelance financial writer based in the US. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.
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