At M&A, the accessibility and rapid evolution of AI brings amazing features to the masses. But it's important to mitigate risk, devise new processes and hone new skills, explains Graham Dotchin.
Ready-made tools provide generative AI capabilities to the masses, and those working on trading are no exception. However, only a fundamental rethink of aggressive mitigation of processes, skills and risks allows businesses to enjoy their fullest benefits. Azets partner Graham Dotchin says he will be introducing ICAEW's webinar next week with starting M&A's ready-made tools.
“Generating AI tools are accessible to everyone and are used as widely as searching for the majority of corporate finance staff,” Dotchin says. However, given its ubiquitous nature, using AI on its own does not provide a competitive advantage. “What gives you a competitive advantage is how you apply it.”
He says the impact on the way M&A teams run is inevitable. “It will change the way we work, the skills we need, and the processes we need to follow. But in the end, it will expand what we can offer.”
Free access massive language models (LLMs) such as ChatGpt and Gemini are public tools and the ability to manage the risks presented by generative AI – topics to be touched upon in webinars – is a major concern. Companies need to be able to manage and demonstrate safe use. Confidentiality is one example, he says. “For example, have you checked your settings to prevent your questions or answers from being used to further train your model?
“Think of using AI as a 'push' or 'pull' category. You can push information out and ask AI to evaluate it, analyze it, and review it. They also want information that they already want in the public domain. Is the right amount of information confidential? ”
Another risk is ensuring that AI provides comprehensive answers. “Azetz set up a structure that allows us to test for hallucinations and inaccuracies in information. It's not a complicated process, but it's got behind the market's two years of knowledge.”
Meanwhile, the potential impact on employment roles and skills is very large as AI significantly reduces the time it takes to source information. “If AI can increase efficiency, businesses will choose to reduce costs or use additional time and capacity to add value elsewhere in the process,” Dotchin says. “What I like about AI is its immediacy. If you have questions to explore, I don't want to spend days reaching the starting line. I want to use the power of AI where I go next.”
Dotchin does not believe that the widespread use of generated AI will result in massive reductions across corporate finance. “The advent of spreadsheets has changed the way we work and changed the time people can assign to tasks. It meant we had to serve our customers better. AI is similar.
“From a skill perspective, there is a huge change between people who are asked to process information and analyze and interpret it.”
AI, he says, emphasizes the importance of human demands in corporate finance. “When using audits and taxes, the answers are generally correct or wrong. In M&A, there is always no right or wrong answer. Technical ability is required. But the key skills can manage the process? Can you manage people? Can you read the room and quickly learn how to reach the best solution?
As technology and its governance continue to evolve, many companies face a steep AI learning curve, Dotchin warns:
“Everyone can find information quickly and perhaps free of charge. What is increasingly doing with that information, how do they layer the wounds and battle stories of war, and how do they layer successes in managing that client through the process?”
“We are pleased to announce that David Petry, Head of Corporate Finance at ICAEW,” said: “We will learn how to use these AI tools to understand their limitations and will be the basis for the skill set of corporate finance practitioners, from all involved in M&As, from report processing and draft reports to principals making final investment decisions.
