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Why AI-enabled finance will be critical to sustaining competitive advantage

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Matthias Thurner, Chief Product Officer for Unit4

 

Smart machines are on the rise, and they are already helping CFOs make better, data-driven business decisions to outpace the competition

 

The business benefits of AI are common across industries: eliminating manual processes, making business nimbler and more responsive, and supplying insights in real-time.

AI and its machine learning technology can already replicate some finance processes and actions. They can analyse data, take over complete tasks, and generate reports. Given sufficient data and processing power, AI-powered corporate performance management (CPM) promises to do almost anything a human finance pro can do now – but faster.

AI-powered CPM is already able to examine in a few minutes multiple complex financial models – heavy brain work that a finance professional might need days to work through – and uncover variances in seconds.

Used effectively, these capabilities can supercharge finance processes and help CFOs deliver new business agility and market responsiveness to their companies.

Gaining new insights faster is the key. At period end, CFOs are the first to notice when sales of a product are up or down. What if they could also see the relevant customer behaviors that signal a coming rise or decline?

Are there recurring problems with certain products that generate more returns and refunds? What are customer support tickets and PoS feedback telling us about purchase satisfaction? How quickly are we able to fulfill online orders versus our nearest competitors? By putting AI tools to work, CFOs are better positioned to answer these questions and recommend course adjustments.

 

AI in finance today

Smart assistants like Apple’s Siri can already handle questions on stock quotes and weather. What if you could ask a finance digital assistant on your smart phone to list product categories that have fallen short of forecast in the latest financial results? The bot would allow you to have a ‘conversation’ with the CPM system, and tell you where the anomalies occurred.

And there are digital assistants that can already answer queries in seconds that would take a human hours of analysis. Which of our products is likely to miss budgeted unit sales this quarter? Is business unit Y on-track to reach its cost-of-sales target? Compare the profitability of the following regions in February and March of 2018.

Like Siri or Alexa, these assistants can take these queries by voice or text and provide replies in natural language.

This is one way in which AI can augment the finance function and make it better. In the future, chatbots will work in the background to help CFOs improve performance, not just measure it. Rather than process data on request, AI-powered CPM systems will automatically consider finance and other business data in real-time as it arrives in the system. It will note potential problems and, for example, suggest measures to reduce costs where they look to be over-running.

While finance teams at a competitor’s HQ continue to apply more established (and reactive) ways of improving cost efficiency and effectiveness, finance teams leveraging AI will be delivering insights that help sustain profitability and identify potential issues in the market before they impact revenues.

 

Preparing for the future

This shift from augmenting finance decisions to driving them is already underway. But as with any new technology, there will be early and late adopters. The leaders will have a critical advantage in terms of responsiveness to changing economic, sales, and market conditions. While CFOs who sit too long on the side-lines risk falling behind.

The first job of finance is to get the numbers right, and the arrival of AI technology won’t change that. In the relentless drive to improve efficiency and stay ahead of the competition however, AI is a new set of tools with the potential to transform the finance function.

In the months and years to come, AI-based advances to CPM software will offer new ways to automate human processes and deliver business insights faster than competitors using traditional systems. Future thinking CFOs should start evaluating how to be at the forefront of AI-powered finance today.

 

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Finance

TECH TRENDS: THE FUTURE OF FINANCE IS DIGITAL

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Simon Bull, Sales Operations & Business Development Manager, Aqilla

 

Everywhere you look across the modern working environment, there is pressure to ‘digitally transform’ by using technology in areas where manual work and processes have previously been the preferred option. Despite growing momentum in general, progress across the finance function has been somewhat slower than other core areas of business, not least because it is highly regulated and teams must exercise caution to ensure introducing change does not also introduce risk.

One familiar scenario is the approach finance departments take to storing data, particularly any sensitive information, on their own premises and their own hardware. While keeping valuable assets such as this close to hand offers a strong sense of security and control, it illustrates the limitations finance teams face in changing traditional approaches and, as a result, the relatively slow pace of technology-focused innovation overall.

However, the case to embrace tech-led change is becoming irresistible, with businesses everywhere highlighting a huge range of digital transformation benefits, from cost savings and technology performance to IT security and compliance. In the current environment, many finance teams have also experienced first hand the impact of digital transformation, with remote working bringing new technologies and digital services into focus.

Simon Bull

But, where are we heading? As digital transformation gains momentum across the finance function, where should teams be looking for opportunities to update manual processes or to replace outdated technologies? And where might the trends at the heart of this movement – such as cloud computing – have the biggest impact on the day-to-day experience of finance professionals?

The role of cloud computing raises a key point. For finance teams, digital transformation also requires a change of mindset, perhaps best illustrated by a willingness to move away from outdated in-house technology infrastructure and software products to flexible and more financially efficient cloud-based services. In doing so, it becomes possible to focus on opportunities and priorities:

 

Cost savings

One of the most important is the cost of technology. The cloud-based Software-as-a-Service (SaaS) approach that can offer users the convenience of a monthly pay-as-you-go payment model for a range of key technologies, such as accounting software. This is in contrast to traditional IT procurement models where businesses have to invest significant sums in one-off software purchases. What’s more, because SaaS users typically only need access to a laptop and internet connectivity to use cloud-based applications, it also saves money on the server hardware that has previously sat in the corner of the office, and in fact, it may no longer be needed at all. In selecting cloud-based finance software services, organisations should always compare pricing from several providers to make sure they are getting the most competitive deal.

 

Technology Performance

Today’s cloud-based finance software solutions are available with a growing range of options, starting with simple, entry-level functionality to the opposite end of the scale to products offering powerful performance designed to fit the needs of even the biggest and most complex finance departments. Important features and functions to look out for should include: extensive analysis, proper periodic management and business calendars, multi-currency, multilingual and multi-company operation, full VAT handling International coding, tax and language flexibility, automatic reconciliation / bank integration, built-in key performance measurement, advanced search, selection and drill-down, document and image scanning.

 

Stronger security

Many cloud providers now have security at the top of their list of capabilities, but checking their accreditations, policies and security track record should always form part of any selection process. This should include areas such as data protection, backup services and their ability to deal with common security issues, such as ransomware.

 

Service standards

When looking at cloud service providers, finance teams should also focus on the quality of service on offer. At its best, cloud-based customer support and service can deliver an outstanding experience where the provider really feels like an extension of the in-house IT Team. The best way to check on the service capabilities of any cloud provider is to ask for references from existing customers, check online reviews and evaluate their Service Level Agreement (SLA) to understand the small print of any terms and their impact on service levels.

 

Compliance

Compliance is front of mind across the finance function and is an area where the specialisation offered by many cloud software solutions can be of huge benefit. Even for the most niche requirements, there is often a software provider out there who has a solution designed to meet very specific needs, and in embracing these technologies, the efficiency and accuracy benefits can be truly transformational.

The challenges seen across the economy over the past 12 months have significantly accelerated the pace of technology-led change, finance teams included. But, cloud-based finance software services can help teams to widen their approach to innovation, embrace the flexibility offered by remote working on a permanent basis and deliver a range of operational and customer-focused benefits for the long term.

 

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Technology

THE INSURANCE SECTOR IS BEING DIGITALLY DISRUPTED: BUT IS IT READY?

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The insurance sector is being disrupted by innovative technologies that are helping to drive digital transformation within the industry. The global Covid-19 pandemic forced the sector to temporarily let go of traditional working models and implement remote working approaches so that employees continued supporting customers while at home.

The move to remote working has encouraged legacy insurance companies to rethink and digitise services to keep up with challenger Insurtech brands. As they continue to pick up pace, traditional insurance businesses are keeping their eyes firmly on the prize, using technology trends such as IT consumerisation, AI and IoT, to spur new creative offerings. But are they ready for a permanent change?

 

Facing up to challenges

While insurers tapped into innovative emerging technology trends to create new services for customers and improve employee experience, there continues to be residual pushback. In a recent risk management study by Deloitte, more than two-thirds of individuals believed the use of emerging technologies, such as big data and analytics, could dramatically increase performance in their organisations. Yet just 29% of organisations are deploying these tools.

To remain agile, the insurance industry will need to find ways to address this gap in 2021. According to Gartner, barriers ‘often have little to do with how different a technology is.’ They stem from low employee utilisation, a lack of visibility into technology investments and regulatory red tape.

 

Improving technology adoption 

A common challenge to adopting emerging technologies is the lack of skill and familiarity in using new tools – not the tool itself. As insurers look to change their working approaches following the pandemic, they should give employees the devices they are most familiar with to remain productive in their new working environments. According to PWC, 78% of millennials believe having access to the technology they like at work makes them more effective. Not only does this save on time but employee-choice programs will also create new benefits such as increased employee engagement, retention and recruitment.

IT consumerisation has enabled the most loved technology providers, such as Apple, to support employees as well as businesses. The influx of Apple’s iPhone, Mac and iPad is directly influencing business productivity as there are now more than 235,000 business apps available in Apple’s App Store, according to Strategy Analytics.

IT teams will save precious time and effort by utilising the existing built-in native apps that support businesses. For example, Apple Business Manager provides zero-touch deployment and configuration for thousands of employee devices. Teamed with an Apple Enterprise Management platform,  IT can remotely personalise each device with the tools that employees need to deliver work more efficiently such as claims and data-entry processing.

The insurance sector should also utilise existing advice channels and resources to get best practice advice. Apple is one of the few providers to have created a hand-picked task force of partners in mobile strategy, app development and back-end system integration, that businesses can call upon to maximise their Apple hardware, software and service investments.

 

It’s all about balance

The need for improved underwriting efficiency and data quality within the insurance world has meant insurers must find ways to be both operationally fast and water-tight in managing confidential customer information in 2021. Errors result in breaches, heavy fines, loss of customer trust, reputational damage and even jail sentences.

IT must have a single-pane view of all devices to reduce the risk of a breach and manage hundreds of devices, each with its own personalised inventory of apps. An enterprise management solution enables IT to manage data access by delivering specific permissions to apps, files and tools for the employee to remain productive.

 

Cut the red tape

Regulatory red tape is a barrier to the adoption of emerging technology. Businesses do not want to lose valuable time and effort in introducing new technologies that need to be assessed and measured against the latest compliance requirements. To encourage businesses to find new ways of working and remain secure, the Centre for Internet Security (CIS) has created a set of 20 security controls to follow. Commonly known as the CIS 20 standard, the controls help businesses walk through recommended steps such as updating software, logging and auditing, managing user environments and system access.

Since employee experience is paramount to the successful adoption of emerging technology, Apple Enterprise Management platform solutions make the roll-out of comprehensive compliance and benchmark requirements simple and less intrusive. With a few clicks, the IT team can confirm each device adheres to the security standards and remains compliant at any time. Dated software can be updated by employees and the IT team can ensure the most sensitive information is protected with the latest versions and updates. When regulations change, insurers can add in and deploy new requirements through the platform without wasting time.

 

Long-term benefits

Insurers around the world experienced a surge in motor, home and consumer goods claims during the first wave of the pandemic as more people relied on and invested in personal transportation and online shopping.  According to KPMG, UK insurers also offered free motor and enhanced home cover for National Health Service (NHS) workers, and extended business cover to support employees working from home. As customer support lines collapsed under the sheer volume of calls, the insurance sector went online to reserve phone communication for the most urgent.

Consumer demand for accessible innovative new services will continue to be a key focus for many in the sector who need to make up for the lost time. This is where remaining agile will be imperative or insurers will find themselves losing out to the competition.

Digital services, made possible through AI, IoT and data analytics, deliver instantaneous, richer, and more meaningful insights for insurers to create unique and personalised covers. They enable employees to produce results quickly and draw in new revenue streams, without the need to rip-and-replace existing technology.

Through the provisioning of local user accounts and simple password synchronisation of cloud services, insurers will help employees achieve multi-factor authentication and single sign-on. A single set of cloud identity credentials reduces disruption in creating new passwords requests and empowers employees to tap into new tools more quickly.

 

Looking into the future

The 2020 world health crisis drove many businesses, including the insurance sector, to work remotely to survive. And while the road to recovery will take time, it has encouraged them to re-evaluate their long-term working environments and investments to remain agile. Despite uncertainties, businesses are now looking to create hybrid working environments where they can occasionally untether from the office as a way to continue improved experience and productivity levels. A recent report by PwC suggests that splitting time between the office and home is expected to become the new normal.

Why go back to the way things were when there are more benefits to be had in this new normal? Through an enterprise management platform and native productivity apps, it’ll be a win-win situation where employees remain positive, IT ensures its technology investments are fully utilised, and the business remains protected, reaping the benefits of new services and improved engagement with employees and customers alike.

 

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