Shamus Ray, founder and CEO of UK-based audit technology company Engine B, has a firm view on what artificial intelligence (AI) will mean for accounting and finance in the coming years. I have.
“I think there's going to be a big shift in skills and culture, and it's going to happen quickly,” Ray said.
He said financial professionals “are going to do more business partnerships and have different skills.” He added that they will communicate with companies and work through hypotheses and plans “without hiding behind the numbers.”
This is because AI and related technologies will automate much of finance. It's already happening. So far, this change has affected relatively basic tasks. But the technology is moving to increasingly complex tasks. And the pace of transformation is accelerating.
So where is AI being used? What can we expect in the next few years? And where should financial professionals pay attention?
Where to start with AI automation
AI automation can improve efficiency and speed, especially in operations where processes are streamlined.
“Processes that will benefit from AI and financial automation are those that currently require a high degree of manual input, involve large datasets, and are time-critical in nature,” says PDO (Petroleum Development Oman) Finance said Haifaa Al Kaifi, Director, FCMA, CGMA. ). “My advice before committing to AI or finance automation is to make sure you map all your key processes.”
If you follow the process, you will find opportunities for improvement that can be easily implemented, Al-Khaifi said. “There are good tools for this. I am personally a proponent of using Lean methodologies and have had great success with Agile methodologies. You will be able to choose the appropriate process.”
PDO has already deployed automation solutions extensively, she said. “In my department, we implemented user query-based automation tools to enable staff to self-create dashboards using multiple datasets.” We also implemented machine learning to read the extracted documents. is in use, and PDO plans to implement a solution to forecast operating expenditures.
Paolo Lo Monaco, Group CFO, ACMA, CGMA, Dubai-based Al Khayat Investments (AKI), said technology in general has been enhancing the finance function that creates value for businesses over the last few decades. said. That effort began with desktop automation and continued with robotic process automation (RPA), freeing finance professionals from simple, repetitive tasks. Desktop automation is the use of software robots to automate tasks on individual users' workstations, such as logging into a website or extracting data from email. RPA is used to automate many repetitive, rules-based tasks, such as invoice processing and payroll management.
“Recently, we've seen a move towards intelligent automation, combining all the basic automation with artificial intelligence and analytics,” says Lo Monaco. “This means we can develop more touchless processing and intelligent workflows to significantly reduce the cost per transaction for all repetitive financial processes.” (Sidebar: AKI’s Digital Transformation )
Automate risk analysis
Over the past year, interest in generative AI, exemplified by ChatGPT, has exploded, Lo Monaco added. “There are now a growing number of programs that can explore and interpret large data sets to generate valuable insights, immediate responses, and summary reports.”
AI will also be applied in more advanced areas such as risk analysis. “If you are part of a large or medium-sized organization in the US and want to see what risks your business faces over the next six months, look at all your competitors using generative AI. “We can do that,” he said. Form 10-Ks containing a company's risk factors are published on the US Securities and Exchange Commission's (SEC) website, and AI can examine hundreds of these to generate a complete picture and provide insights. I can. He added that AI will also be critical in areas such as fraud detection, as it can analyze vast amounts of information and look for patterns that humans cannot spot.
Staffing requirements
Not all AI works behind the scenes. The rise of AI assistants (such as Microsoft's Copilot) also means big changes. An AI assistant is a software program that performs a variety of tasks, from dictation to research to report writing, following voice or text commands. Their capabilities are growing rapidly, and in the coming years financial professionals will be powered by AI that will take over some of the more mundane parts of their jobs.
This will inevitably lead to changes in staffing requirements for finance departments and accounting firms. Ray said that traditionally, junior staff members have done a lot of transactional, monotonous work. As a result, staff turnover tends to be high. “That's what will happen. Where the financial industry used to have a pyramid-shaped staff age profile, it will now become a diamond-shaped one,” he said.
strategic framework
“Financial institutions need to establish strong data and risk controls to support the secure use of AI and generative AI,” Al-Khaifi said. “Implementation of AI and artificial AI must be done in accordance with a clearly defined AI risk strategy that addresses ethical principles.”
Lo Monaco said AI should not be viewed simply as an add-on, and if it is, it is unlikely to become a reality. “For a successful AI digital transformation, it is critical to have a clear AI strategy aligned with finance.” Plan your vision, set goals, and set clear metrics for success. He said it is necessary to have one. “Of course we have to take our staff with us,” he added. “It’s really important to connect the AI vision with a clear talent strategy in terms of what is needed.” [for] Change management. “
We also need transparency around AI, not just blind trust, Lo Monaco says. “A review program should be in place to ensure accuracy of responses. Therefore, it is important to maintain proper quality control by finance teams and ensure that the system does not provide black box-like responses. Very important.”
The next few years should be a very exciting time for finance. One thing that could slow the progress of AI is regulation. “I think the accounting industry will remain in its current state for much longer than necessary because of regulators,” Ray suggested.
AKI describes itself as a new kind of family business operating across a diverse portfolio of industries and partnerships. Founded in Dubai in 1982, the company has grown from a single pharmaceutical company to a diversified company with a presence in nine countries in the Middle East and North Africa (MENA) region.
Paolo Lo Monaco, AKI's Group CFO, ACMA, CGMA, said the company has identified two high-level areas of digital transformation that support AKI's “future financial vision”.
“One is a shared financial services center, which we call the ‘Finance Factory.’ This is essentially our financial operations, where AI can support our efforts to automate all trading processes. Here, AKI is a newly established financial center with end-to-end processes that streamline the identification of key cost drivers and automation efforts supported by RPA. It said it started by reviewing the purchase-to-pay process provided by Excellence. AKI also implemented a dashboard to monitor Finance Factory's process performance, both in terms of cost per transaction and service level agreement (SLA) process performance. This approach allows AKI to closely monitor cost per transaction across plants and leverage technology to improve material efficiency as the group scales.
“We are currently in the process of extending this approach to other financial operations within the factory. [areas], it starts with accounts receivable and then general ledger integration,” he said. “Next year, we also plan to move into treasury operations. Therefore, the first pillar of our digital transformation is to reduce the cost per transaction in treasury and treasury operations. Real-time finance that enhances your financial planning and analysis capabilities to impact financial performance.”
“We recently launched the Qlik Sense self-service financial dashboard,” added Lo Monaco. It is an AI tool that allows both financial and non-financial users to interrogate the system in real-time to deeply investigate the financial performance of a business, and what financial teams should intervene to improve the financial performance of the business. Allows you to quickly identify areas.
He explained: “This enhanced capability and focus is a key element in realizing our vision of repositioning the finance function as a trusted value creator for stakeholders. This requires reskilling the function, so AKI That's why we recently collaborated. [AICPA & CIMA] Establishing the AKI Finance L&D Academy to review the finance competency framework and strengthen the skillset of finance teams for the future. ”
Rhymer Rigby is a contributor to FM Magazine and author of The Careerist: Over 100 Ways to Get Ahead at Work. To comment on this article or suggest an idea for another article, please contact Oliver Rowe. Oliver.Rowe@aicpa-cima.com.
AICPA and CIMA Resources
podcast
“Hybrid Intelligence: Working with AI, not against it”; JofaAugust 17, 2023
