AI’s Promise in Finance: How CFOs Can Responsibly Leverage Its Potential

 Angus Milledge, Head of New Business EMEA at SAP Concur.

Finance leaders have long recognised the potential of artificial intelligence (AI) and data analytics to enhance their work. AI can automate processes, detect patterns and highlight anomalies. This presents clear value for finance teams where accurately processing and managing data is critical – and of course, using that information to inform key decisions in the business. 

Actually, a majority of Chief Financial Officers (CFOs) in our recent SAP Concur CFO Insights survey say that AI offers opportunities for finance. According to them, the main benefits of AI include making business operations more efficient (82%), generating greater quality insights (28%) and making forecasting more accurate (24%). 

Nonetheless, many CFOs have concerns about how the technology could impact their role in the long term. Two-thirds of finance leaders (68%) believe AI will threaten their position, and a further 31% see it as a risk for their team.  

This perception needs to change, and fast. When used correctly and responsibly, with full attention to data privacy, AI can be a powerful ally for overcoming financial challenges, transforming the role of the finance leaders, and giving the business a competitive edge. 

AI: Threat or friend? 

AI can be an important tool against CFOs’ greatest concern today: managing uncertainty. Nine in ten senior finance leaders agree their key task today is to prepare their business for the unexpected, according to our survey. However, when considering their biggest internal challenges, most CFOs highlight the growing complexity of forecasting and budgeting (56%). 

Finance leaders say forecasting is complicated by unpredictable economic conditions (56%), challenging pricing risks (45%), and the inaccuracy of historical data (38%). The increasing demand for forecasting agility (27%) is also presenting challenges, particularly when finance teams may already be stretched thin by fulfilling multiple functions for the business. 

Positively, most leaders are responding to these challenges not by cutting costs, but by looking to gain greater insight and take advantage of new technology. CFOs say they are adapting by increasing monitoring of market conditions (57%) and investing in innovation (40%).  

Most (55%) are already investing in data analytics and reporting tools – and artificial intelligence can be a powerful part of that mix. AI can both enhance the finance team’s operations and provide insights that will deliver new value for the business – positioning finance as a guiding light during times of uncertainty. 

Freeing the team from tedious tasks 

A typical finance team spends 40-70% of its time gathering and correcting data. Artificial intelligence and analytics can virtually revolutionise the team’s operations, by freeing people from those routine transactional tasks, reducing mistakes, and improving the quality and compliance of data. 

For instance, the technology can automate tedious tasks like inputting invoices, tracking receivables, and logging payment transactions. It makes it easier to improve invoice matching and devise payment and collection strategies, and enables the business to respond to threats and new opportunities by automating risk assessment. 

Using AI can also improve tax payments by saving time, optimising operations, and reducing the risk of fraud and errors. In fact, 47% of finance leaders believe AI could have a significant impact on the tax function, freeing up team members and mitigating potential sources of uncertainty. 

As businesses look to improve the quality of their data, AI can also help by proactively enforcing policies and data quality standards. Tools can detect errors as financial transactions are processed, and even suggest corrections based on previous successful interventions.

Overall, AI is particularly useful for supporting people with repetitive, error-prone, and time-consuming tasks, by automating processes and improving outcomes. Ultimately, it frees up time. The finance team can dedicate that newfound time to higher value, strategic work – improving job satisfaction while delivering more for the business. 

Reshaping the CFO role   

Finance leaders can also take advantage of artificial intelligence to reshape their roles. AI can provide a multitude of opportunities for CFOs, particularly in the quality and depth of the insights which become available. 

AI-powered insights capture and adjust to business events as they happen. For example, the technology can help teams to forecast in near real-time, support demand planning by analysing external factors, and even help generate tailored financial plans.  

Armed with these insights, CFOs can enhance their decision-making and help the business to become more proactive in responding to change. That is perhaps why six in ten CFOs believe AI will be a crucial tool in managing the unexpected (61%). 

Using AI can also enable CFOs to draw on operational data to identify trends and opportunities across the organisation. Beyond being the guarantor of compliance and revenue, a CFO leveraging AI can also offer guidance to make the business run more smoothly. This can include helping sales and marketing generate more meaningful revenue-generating activity, or freeing up more time for R&D and innovation.  

Meanwhile, all critical support functions, including HR, legal and finance, can work faster, safe in the knowledge their data is accurate and up to date. Using this approach, finance leaders can help other parts of the business to streamline and innovate to future-proof the organisation. 

Using AI ethically and effectively 

As excited as we are about AI’s potential, we must also be cognizant of concerns around its use. Like all technologies, how AI is used will determine its effectiveness – and there are several considerations for finance leaders, from data privacy and security, to bias and even ‘hallucination’, where AI-generated conclusions are wrongly presented as facts.  

Working with a responsible and experienced partner who understands the importance of ethical AI practices and can help implement strong security and privacy measures, are all crucial prerequisites to using the technology well. 

AI tools embedded into existing systems can help finance leaders unlock the value of the technology more readily. A close connection between AI and business processes can also ensure that AI-based predictions and recommendations remain accurate over time.  

Ultimately, the value of AI lies not in replacing, but augmenting, the finance function. AI can better complete tasks that are tedious and difficult for people. It can also quickly generate insights from large datasets for more informed, faster decision-making. When used in the right way, AI is far from a threat. Instead, it is a means to unlocking new opportunities for CFOs, finance teams and the wider business, even in a challenging business environment. 

Read the CFO Insights Series from SAP Concur here.   

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