How The Finance Function Can Thrive in the Age of AI
The benefits of AI and Automation technology are being seen across all business functions, and finance is no exception. This article explores some of the ways that the finance team can reap the benefits of AI.
The role of finance within businesses is undergoing a shift, with many functions now being challenged to add more value beyond their traditional responsibilities. Insights from Microsoft’s 2023 Future of Finance Trends report revealed that the challenge for finance teams is striking the right balance between driving strategic innovation and business agility alongside maintaining business growth and cost reduction. In order to protect financial stability, CFOs are encouraged to create an environment where they are empowered to evolve their roles as well as empowering their team in their roles. Embracing technology and intelligent tools is key to achieving this. However. Microsoft’s report states that 88% of finance leaders are feeling currently feel the challenge of not having automation tools required for the automation of repetitive tasks and freeing up their time for more innovative work.
Introducing the correct technology can help finance leaders free up valuable time to focus on work that ultimately drives business strategy and innovation. According to Gartner’s research in the CFO Perspective on the 2023 CEO Survey report, when asked which new technology will most significantly affect their industry over the next three years, both CFOs and CEOs named AI as their top pick. For CFOs this finding was up 35% from the previous year.
This finding is unsurprising with the rise in popularity of technologies like AI and automation. In particular, the rise of generative AI has urged many companies to look into ways of incorporating artificial intelligence into their daily tasks and processes. However while generative AI has blown up in popularity, organisations should not ignore the power of the intelligence layer of AI which can empower their organisations.
Below we explore some of the ways finance teams are leveraging AI.
Empowering Better and Faster Decision-Making with AI
There are a number of ways that AI can help businesses enhance decision-making across the organisation. Firstly, AI-Powered tools can easily analyse large amounts of data in real time. This provides the team with insights and trends that may not have been easily detected. For example, tools such as these can automatically give finance teams clearer views of spending patterns across the organisation or specific departments. AI can also provide predictive analysis based on historical data that empowers the finance team to forecast future trends and make decisions accordingly. Scenario planning also helps teams get a clearer view of the potential impact of business decisions. In terms of presenting this data in a user-friendly way, these tools can provide customisable dashboards and reports to allow finance teams to work with data in real time.
Optimising Operations Using AI
With finance teams always looking for ways to help increase efficiency and deliver cost savings, harnessing the power of AI can help finance teams streamline financial operations and automate routine tasks. One such example of this is using AI-powered software to automate payments. Tools like this can help finance teams automate vendor or payroll payments quickly and easily. Typically tools like this can also be integrated with a company’s accounting or ERP solution if the system allows. Another use of AI-powered tools in streamlining operations is smart data entry, tools with this functionality can capture and enter financial data, reducing the need for repetitive manual data entry. They can also automatically categorise transactions and expenses which can make it easier for finance teams to manage finances and improve accuracy. Approval workflows can also be fast-tracked with AI which helps reduce the time waiting for approvals and make the process more efficient.
Enhanced Compliance and Security with AI
All finance teams work with sensitive financial data and incorporating AI can help improve security and compliance. Firstly, AI can be used to ensure compliance with internal policies or regulations and can flag any suspicious activity. Similarly, AI can also help detect and prevent fraud by analysing transactions to detect any anomalies in transaction patterns to flag any potential fraudulent activity. AI can also be used in a number of ways to improve data security by identifying any potential vulnerabilities or threats. Some AI-powered tools do this by monitoring network traffic to identify any potential security threats before they have a chance to become an issue. Access control can also be supported by AI software to ensure only authorised users have access to sensitive financial data. Tools like Azure Active Directory are often used by organisations to facilitate this.
It is clear that finance teams can achieve many strong benefits with the introduction of AI-powered software. From automating processes to enhanced decision-making and to increased security, finance leaders can empower their teams to unlock new levels of productivity and innovation. With AI becoming more accessible to all industries, the finance industry is no exception and it is very likely that we will see continuous developments in the way that AI can be used in this industry.
If you would like to learn more about modernising your finance function, get in touch to speak to one of our specialists.