AI in Finance Operations: Myth or reality?

The benefits of AI are seemingly endless for financial professionals. But how effective is the current technology? And how to get to grips with what works and what doesn’t?

At the recent online Australian CFO Summit, hosted by Weel and supported by CFO Magazine A/NZ, I had the opportunity to attend another the expert live discussion! Hosted by leading author and tech accountant guru, Heather Smith, the panel comprised of Damon Hauenstein, CFO of Weel, James Carey, Chartered Accountant from Prime Partners, Asa Cox, Founder & CEO at Arcanum.ai and Ben Yi, Data Scientist &Founder of Toccata AI. The discussion provided many excellent insights into the opportunities and challenges that come with using AI to scale your financial operations.

Here are my top take-aways >

Is AI just a myth or a reality?

Data scientists have been exploring AI technologies since the 1950s and today it is used across many IT platforms in the form of automation and algorithmic reasoning.

Generative AI was named after the fact that it can generate a wide variety of data, such as images, videos, audio, text, and 3D models. It is perhaps the most well-known AI technology, Yi said.

“If you look at a broad definition (of generative AI) it’s essentially an extension of automation,” he explained.

“We use AI for recognising things, for example if you’ve ever used Google camera to take a picture of a plant and asked it to tell you what the plant is.” But it was the launch of ChatGPT in 2022 that drew the world’s attention to the arrival of AI, said Cox.

“AI has been used in back-office functions, but maybe hidden away from the finance users, operators and other members of the team,” Cox said.

“I think now with the explosion of ChatGPT and large language models, I think there’s an understanding of what’s possible. It feels like AI has been around for a long time, but it’s only crossed that chasm in my opinion from the early adopters into the early majority.”

How is AI shaping finance businesses?

AI promises some exciting new changes for finance. Some fear this spells job losses and less human interaction, while others believe it brings time-savings and greater accuracy.

AI-powered tools enable efficiencies in manual tasks such as data entry right through to more advanced tasks such as analytics. These tools may be hit and miss now, but in the not-too-distant future they stand to offer more refined processes and outcomes.

The evolution of this technology is already gathering pace, said Hauenstein.

“Generative AI in all its different forms is going to have big changes for the global economy and I think the finance function specifically, which is really exciting,” he said.

“Today we’re at the experimental and early adopter stage of this journey. Even in the last few months we’ve seen step changes in what’s available and what’s possible.

“I think that’s just going to pick up and accelerate over the coming weeks, months and years and ultimately expand into mass market consumer products that everyone uses.”

A smooth uptake of AI is dependent on integration with IT companies that understand the finance industry, Cox said.

“I think for the more sophisticated use cases it’s down to the technology industry, companies like ours to try and make it as easy as possible for the non-developer, non-data scientist, non-nerd to use,” he said.

“That will involve integrations and automations in a way that will enhance what you already do rather than learn something new.”

What are the benefits?

From website chatbots to preparing documents, there are already a number of ways AI can boost productivity for finance professionals.

Carey said he uses it to code, perform functions within Microsoft Excel and to write macros in computer programs.

“AI to me is a tool that extends us,” he said. “I don’t think in the short term I’m going to be replaced by an AI. But I think an AI can make me much better and more productive.”

While it’s not fail-safe, AI solutions can act as a good springboard for many tasks.

These include the creation of emails, presentations and financial documents, said Hauenstein.

“One example is a risk register for a company,” he said.

“You can get a surprisingly good foundational risk register out of ChatGPT or similar tools. It’s not going to be perfect by any means, but it will give you a baseline set of topics you can build on yourself.”

What are the downsides?

AI is still developing and needs to be treated with caution. Cox pointed to the Samsung case in April (2023) where employees reportedly leaked sensitive confidential company information into an open source ChatGPT.

“I would give a word of warning, which I think most people know, but do not post confidential information into ChatGPT,” he said.

“It is a public AI, it’s not private. Start using it, but with the right guardrails in regards to security and privacy.”

Yi also warned about the potential rise in fake documents produced by AI-technologies and the implications this can have in finance.

“Fraud is also going to rise because it’s going to be so easy to generate very convincing looking documents and emails so please keep your guard up,” he said.

How do I get started?

Becoming familiar with AI is an investment into future efficiencies and this need not be a formalised process.

Carey recommends experimenting with different types of AI for a variety of functions.

“The best thing is to just get in and play,” he said. “If you have a problem that you don’t know how to solve…I used to go and spend 15 minutes Googling, now it gives me the answer straight away. If you’re the kind of person who like to build things it will lead on to the next thing and the next thing, and you’ll find a way to use it in your everyday life.”

Business leaders who begin to adapt to AI now are sure to reap the benefits, Hauenstein said.

“Businesses need to familiarise themselves with where it can add value and where it can’t,” he said.

“Businesses that get their head around that early and are comfortable and confident around the right use cases I think will be at an advantage relative to those who don’t do it. They will enjoy productivity efficiency gains that those who fail to embrace it just don’t have.”

For further insights and the opportunity to re-watch the full live webcast recording, click here for instant and full access > https://australian-cfo-community.circle.so/c/australian-cfo-summit-2023-recordings/ai-in-finance-operations-myth-or-reality