Corporate finance is almost constantly evolving alongside the developing guidelines of legislation and business, but do you know how AI will impact the industry?
Artificial intelligence (AI) has the potential to transform almost every element of business. Corporate finance will be no different and most organizations, regardless of their size or geographical location, will feel some level of impact from the industry-wide changes that are expected to be introduced.
It is often a broad and ambiguous term that can be used to talk about anything from natural language processing (NLP) used in virtual assistants like Amazon's Alexa to manufacturing equipment. This means the potential for AI to impact organizations is unpredictable because of the almost-never-ending list of potential business solutions that could be implemented.
For many in corporate finance, this has caused them to be hesitant over full-scale adoption of the technology, as it's nearly impossible to predict the potential ROI they may achieve.
Much of the discussion around AI is fueled by a wider conversation about how workplaces will be redefined by a digital transformation that is already starting to happen. But how much of this is speculation?
Although much of the buzz surrounding artificial intelligence is still very much business fantasy, many financial organizations are already benefiting from elements of AI.
A recent study from Oxford Economics and SAP found that nearly three-quarters (73%) of Finance Executives questioned believed automation is improving finance efficiency in their company.
But this is just one small element of AI. Most experts agree that the long-term impact of the technology will extend way beyond automation. Recent figures revealed that 38% of enterprises have already embraced AI technologies and that nearly double (62%) are expected to have done so by the end of this year.
This rapidly increasing adoption of the technology will mean that industries like corporate finance are on the brink of a digital revolution. AI is set to cause a significant shift in the business landscape, completely changing company cultures and standards.
A new level of efficiency
Robotic process automation (RPA) is already being used by many organizations in finance - and elsewhere - to automate everyday tasks. It is commonly implemented by finance teams to streamline reporting and transactional jobs, allowing skilled professionals more time to perform tasks that warrant their expertise.
The potential for this to evolve further as the popularity and sophistication of artificial intelligence grows is vast. By implementing machine learning technology, finance departments could automate the process of rectifying invalid or incorrect invoices. This would not only increase efficiency but also accuracy.
Creative thinking at your fingertips
This shift away from having skilled professionals dedicate so much of their time to completing admin tasks will lead to an opening for more creative finance officers. Although you may not immediately put creativity and finance together, there will be an increasing demand for professionals that are creative with the financial information before them.
"By 2025, KPMG expects that only human (some might say “emotional”) roles such as “coaching” and “managing projects” will have escaped full automation. That’s going to mean building a pipeline of talent with the necessary financial knowledge and skills – but who can augment them in one of two areas. Either understanding the way cognitive technologies work and manipulating those tools; or having the creative, communication and people skills to ensure the impact of the new finance automation is properly acted upon." - KPMG report
Whether it's getting commercial insight from financial reports or advising c-level executives on business decisions based on the current financial situation, the growth of AI is going to blur the lines between finance and other areas of business. This will see professionals become more t-shaped, rather than just having one discipline in which they are particularly skilled.
A growing human touch to technology
There has been a lot of conversation around how automation and AI will replace aspects of the human workforce. For finance professionals, it's not so much about replacing employees but making better use of their skills and evolving the right expertise. Machines may be able to collect data with more accuracy and efficiency than any human being, but you will still need professionals there to understand what this means, put it into a business context and make judgments.
AI will change how talent acquisition is carried out though. Companies will need to prioritize candidates that can evolve their skills and are comfortable stepping outside their comfort zone when necessary. Professionals who have a rounded knowledge of applying finance to other areas, therefore, may become much more valuable to organizations than those who are highly skilled in a certain niche. It's important that businesses develop their finance strategy with this in mind if they are to avoid being left behind in the digital revolution.
Insights for Professionals provide free access to the latest thought leadership from global brands. We deliver subscriber value by creating and gathering specialist content for senior professionals. To view more Finance content, click here.