Is the finance sector floundering with AI?
Thanks to its ability to automate data entry, crunch complicated calculations, and execute other mundane tasks at a whim, it’s often said that artificial intelligence (AI) technology will find its first real home in the finance sector.
A new report, however, suggests uptake is far from rapid. Finance teams are lacking the digital skillset to embrace the latest advancements in AI and growth is being impacted negatively as a result.
According to joint research by the Association of International Certified Professional Accountants and Oracle, 89 percent of organizations have not deployed AI in the finance function, and only 10 percent of finance teams believe they have the skills to support the organization’s digital ambitions.
Titled Agile Finance Unleashed: The Key Traits of Digital Finance Leaders, the report highlights that 46 percent of ‘tech-savvy’ finance leaders report positive revenue growth, compared with only 29 percent of their ‘tech-challenged’ counterparts. Organizations that have seen revenue growth, meanwhile, are more likely to be deploying AI compared to those whose revenues are flat or declining.
With that in mind, though, just 11 percent of finance leaders surveyed had implemented AI in the finance function, while 90 percent claimed their finance team does not have skills to support enterprise digital transformation.
“For me, robotic process automation, advanced analytics, and machine learning are three legs of the same stool,” said John Merino, chief accounting officer at FedEx.
“The combination of those technologies and the ability to deliver them in an agile manner without long lead times and extensive interface complexities create a tremendous opportunity to capitalize on some really big efficiency gains in virtually every staff function,” he added.
Merino believes that the big win for them is to liberate that time and move finance up the value chain in what it delivers to the organization.
“Cloud and emerging technologies like AI and blockchain drive efficiency and improve insight and accuracy, enabling finance leaders to step into a more strategic role in the business and improve the organization’s data-driven decision making,” said Andrew Harding FCMA, CGMA, chief executive of management accounting at the Association of International Certified Professional Accountants.
The report identifies three common traits of tech-savvy finance teams:
# 1 | Modern business processes
According to the report, tech-savvy finance leaders use advanced technologies and establish ‘operational excellence’. For example, 86 percent of Digital Finance Leaders have a digital-first and cloud-first mindset, which gives them greater access to intelligent process automation and technologies such as AI and blockchain, which are commonly delivered via the cloud. Additionally, 73 percent centralize finance subject matter expertise in a global ‘Center of Excellence.’
# 2 | Data insights
Leading finance teams are able to connect data that was previously in disparate applications to uncover new insights. They are increasingly relying on AI to uncover hidden patterns, make recommendations, and learn continually from the non-stop flow of business data. The report shows that organizations that have seen positive revenue growth are more likely to be deploying AI compared to those where revenues are flat or have declined.
# 3 | Business influence
Leading finance teams have been able to move beyond reporting and are using data-driven insights to influence the direction of the business. With reduced time spent on manual reporting processes and armed with accurate and timely data, finance leaders are empowered to partner with the business, recommend new courses of action and influence business strategy.