Tim Wakeford, VP for Financial Product Strategy, EMEA at Workday
According to a report last year from PwC, nearly a third of jobs in the financial and insurance sector could soon be rendered obsolete due to advances in automation and artificial intelligence (AI). Yet the future needn’t look bleak for the finance team, as there are very many positive effects that emerging technologies such as AI and machine learning will have on the finance function.
Indeed, it can be said that developing these technologies and making the best use of the new tools, applications and workflow processes that they will allow, means that the finance team will potentially soon have the means at its disposal to be the strategic business partner every CEO needs it to be.
Early adoption and reducing the burden
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With this in mind, it is absolutely vital that the finance team becomes an early adopter of AI and automation in order to reduce the burden of repetitive manual accounting processes. Whilst PwC’s report states that 32% of jobs in the sector will be replaced by these technologies, it doesn’t have much to say about the real positives associated with them for the finance function as a whole.
However, a recent EY study, for example, claimed that 65% of finance leaders say having standardised and automated processes is a high priority, and that 67% of finance leaders equally prioritise the partnership between finance and the wider business.
Traditionally, the finance team has spent a large proportion of its time and effort on activities such as transaction processing and audit and compliance. Automation and AI promises to free up finance professionals from such repetitive work, thus allowing financial experts within a business to focus upon much higher-value tasks and strategic activities that will drive value for an organisation.
When looking at the bigger picture, this means that the finance team can shift their focus from number crunching and auditing to financial analytics and data-driven forecasting. Using AI, for instance, can help to accurately model a business’s strategic risk and resilience and to generally improve overall data-driven financial management.
The finance team has to be an early adopter of AI technologies, as the use of data is growing rapidly. Investment in and adoption of AI in order to give companies the ability to process vast quantities of data is therefore required to support this. Automation and AI needs to remove the repetitive manual tasks that the finance team has, for too long, spent most of its man-hours dealing with and help that same team to become a far more strategic, efficient and skilled element of the entire business.
Balancing emerging technologies and people
Having said all of this is not to say that companies should just ‘embrace’ AI as a whole, as there is a far more complex and complicated transition process at play. But equally, why would a business not want to take this opportunity to transform its finance function and deploy the latest cloud-based applications on a technology platform that can support constant change?
The days of customisations and endless add-ons to integrate a vendor’s technology stack seem outdated at best, and now is the time for change. CFOs should have the mind-set to be continually re-evaluating the systems they are using and ensuring that they meet the needs of the business.
CFOs need to carefully weigh up where the opportunities to automate the finance function are, in order to save resources and speed up operations.Then, once key finance processes are automated, the CFO will need to develop structured analytics and centralise data processes to prepare their teams and the company for the AI era. This always involves a very careful balancing between an organisation’s people, its technologies and the wider, longer-term strategic aims of the business as a whole.
And this is exactly where the skilled CFO can help to nurture a far more strategic and valuable finance function to ensure the best use of emerging AI technologies for their company.
CFOs must remember that the success of any technology will always depend on the capabilities of the people using it. Striking this balance between emerging technologies and an organisation’s most important asset — its people — is going to be the real key for the future of finance.