- Author: Tom Smith
- Posted: December 13, 2023
An Artificially Intelligent World – Are CFOs Ready?
Professor Toby Walsh believes that AI will reshape the future of finance and drive demand for new skillsets. CFO Magazine A/NZ was invited to attend an event hosted by the Financial Executives Institute of Australia (FEI) in Sydney, where Walsh set out how finance professionals can thrive in the new business environment. CFO Magazine’s Jessica Mudditt shares the key take-aways.
Artificial intelligence is poised to reshape every facet of business, according to Professor Toby Walsh. His third and latest book on AI is called Faking It – Artificial Intelligence in a Human World.
“AI is going to be as least as transformative as the internet. It’s even being compared with the transformative nature of electricity. Just as our homes and businesses cannot function without either of those two components, AI is going to be the same,” he said at event last week in Sydney at the Financial Executives Institute of Australia (FEI).
“It’s going to be embedded in everything we do – from Excel spreadsheets to all of our programs and interfaces. AI co-pilots will be added to existing programs to help us carry out all sorts of routine tasks.”
While there are still limitations to AI technology (including some laughable errors), Walsh expects its capabilities to increase exponentially as it is trained on increasingly vast data sets. Data will itself become incredibly valuable to businesses. The success of machine learning models depends to a large extent on the quality and quantity of data at its disposal. Walsh says that companies are increasingly recognizing the value of their own data.
In May, Bloomberg announced the creation of Bloomberg GPT, which has been trained on a wide range of financial data to support natural language processing (NLP) tasks within the financial industry. According to Bloomberg, the complexity and unique terminology of the financial domain warranted a domain-specific model.
“The financial data that can be accessed from a Bloomberg terminal is a goldmine. You don’t want your chatbot to sound like it is speaking astronomy to zoology, so to speak. You want a chatbot that can speak finance to finance, or insurance to insurance, so that it understands your clients and customers. We will increasingly see these models rolled out in generative AI.”
One of the biggest challenges for businesses will be the speed with which entire industries are reshaped by AI processes – including finance and banking. While near universal access to the internet took the better part of a decade, the take-up of AI will be much faster.
“The ‘plumbing’ already exists for AI – unlike it did for the internet and smartphones,” says Walsh.
Adoption can therefore be instantaneous. This is already being seen with the likes of ChaptGPT (as Walsh says, expect to receive more polished business letters in 2024, as a growing number of people make use of ChatGPT). Keeping up with the speed of change will be challenging and those organisations who fall behind may lose their competitive edge.
Skills of the future
AI will also have a profound influence on finance roles. It has already replaced some jobs entirely, such as the compiling of financial data.
“There’s huge uncertainty in being able to predict the impact that AI will have on the jobs market,” says Walsh. “Let’s be honest, technology has taken jobs away in the past. We can expect some jobs to disappear in the future. But it has always created more new jobs that it has taken away.”
However, in the past, it was the routine and repetitive work that was eliminated and taken over by more efficient machine processes. AI has the capacity to take over certain cognitive tasks, which has never happened before.
“It’s impossible to predict the number of jobs that will cease to exist,” says Walsh. “The one certainty is that AI will be disruptive. And whatever jobs exist in the future will require different skills. The most important conversation which is how do we prepare people for that transition and ensure they have the right skills?”
Insofar as it is possible, Walsh recommends businesses look to reskilling their existing workforces rather than looking externally.
“From a financial perspective, hiring people with digital skills is incredibly expensive and it can take a lot of time,” he says. “It can also be a risk to neglect investing in future-ready digital skills for loyal employees in favour of bringing in new hires with the specific skills.”
For at least one organisation, Walsh notes, “It was a PR disaster”.
Three sets of skills categories
Walsh classes skillsets into three broad categories. Those who are digitally literate typically enjoy innovating. They are focused on ‘inventing the future’ through emerging technologies.
“Machines don’t have much emotional and social intelligence. Humans are social animals,” says Walsh.
“There are plentiful jobs that depend upon the strength of your emotional intelligence. If you’re a salesperson, a psychologist, a politician, or a manager of any form it is your social and emotional intelligence that is probably most important, as you lead and inspire people. By contrast, machines don’t have that and I’m not sure if they ever will. And even if they do, I don’t think we care. For example, we don’t want machines delivering us bad news in situations where empathy is required – we want a human for that.”
The third type of skills are creative and artistic ones. This is also an area that is likely to remain a human domain and economists predict that scarcity of high value works will keep demand and prices high.
An area that is related to AI and will likely generate more work is regulation. Effective regulation is necessary to prevent AI causing harm, says Walsh.
“In many cases, we don’t need necessarily new regulation. It is more a matter of applying existing regulation, such as privacy laws. There were some players in the tech community who tried to sell us that idea that the digital space was somehow the wild west, but there is now broad agreement that regulation is essential.”
Walsh’s advice to finance professionals looking to stay abreast of the opportunities in future is to be constantly upskilling.
“There are huge opportunities for businesses and staff to be transformative for your business. If you do think back to if you in your business, when the internet hit, how that changed your world. Well, it’s going to this is going to change your world. As I said, the the significant challenges is going to happen much quicker, because it’s not like your customers have to go online. They’re all online. They’re all waiting and quick to use this type of stuff, right and your competitors are going to be also so it’s going to be a period of rapid innovation.
To find out about upcoming events at FEI and learn more about becoming a member, visit https://www.fei.org.au/