By Matthijs Boon, COO at Equals Money
The rise of AI adoption has remained high on the news agenda this year, with the UK Government placing this new technology at the heart of its strategy to drive economic growth.
In the finance sector, AI is shaping the way teams operate and our survey of 1,000 senior finance leaders across the UK and Europe found that 81 per cent of teams increased their use of automation over the past year.
Where are finance directors harnessing AI – and what should teams consider before taking their own steps in embracing automation?
Managing compliance and regulation
Keeping on top of compliance and regulatory requirements is among the top reasons why finance leaders are looking for smarter, tech-enabled solutions.
Almost a third (31 per cent) of European finance teams view compliance and regulatory complexity as their top operational inefficiency, especially when working across different international markets. For example, since Brexit UK-based companies face different regulations for transactions with EU suppliers, with the EU enforcing PSD2 and the UK following its own Payment Services Regulations, which creates an added layer of complexity for businesses operating in both regions.
Using tools such as API-enabled platforms that automatically reconcile transactions against regional regulations can simplify such challenges.
Tackling fraud
Increased protection against fraud is another big motivator, with 72 per cent confident that automation reduces fraud and errors and 37 per cent saying it significantly improves accuracy and fraud prevention.
With the ability to identify and stop suspicious transactions in real time, AI-powered fraud detection can prevent threats before they happen.
Optimising time
Time saving remains a key driver for adopting AI, with almost half of finance directors (49 per cent) citing this as the top benefit for their teams.
In particular, automated tools that detect duplicate payments were used by 37 per cent, while a similar portion (36 per cent) used automation to eliminate manual input. AI is well suited to reconciliation and very good at following rules, so if teams can design, implement and automate those rules, AI can play a greater role in managing their workloads.
Particular tasks ideal for automation include annotating transactions, downloading statements, expenses tracking and uploading receipts and invoices.
Almost all AI adopters surveyed (99 per cent) reported that automation frees their teams to focus on high-value, strategic work. For example, this mean more time is available to spend on priorities such as relationship building, new product development, staff training and upskilling, developing new partnerships, process optimisation activity or improving customer relations.
Essentially, AI frees up time for financial service managers to be truly analytical and provide greater value to the organisations they serve.
Looking ahead
As AI adoption continues to gather momentum, finance leaders are looking towards more intelligent, connected systems.
This includes spend management platforms that bring transparency and policy compliance into daily operations, especially important as companies decentralise purchasing.
AI-powered credit decisioning tools are particularly useful given the economic volatility and varied credit environments across markets, as it helps teams respond to risk faster and more accurately.
Similarly, cross-border payment automation is becoming increasingly popular for international businesses, for whom managing FX, fees and settlement timing across markets can be a major challenge.
Perhaps the most transformative development will be the continued evolution of embedded finance, from automated cash flow forecasting tools to white-labelled virtual cards with real-time budget controls. These innovations will enable businesses to unlock new revenue streams, deliver more flexible and tailored services, and deepen customer engagement as embedded finance becomes a core part of the digital infrastructure.
The right supervision
Despite the wide-ranging capabilities of AI, it’s important to remember that human interpretation remains vital. Plus, when setting up an automated process, it’s crucial to put procedures and checks in place to ensure accuracy and consistency.
Depending on the level of complexity involved, teams should determine the level of human oversight needed for each automated process. For instance, a task such as issuing payments requires less supervision than a process managing inventory or regulation compliance.
However, when used optimally, AI can have a significant impact on the way teams do business, from streamlining processes to enhancing fraud detection.
Automation gives financial services teams the clarity and control to operate in a faster and smarter way. These tools are reshaping finance, transforming it into a greater strategic force.
