Discover how AI transforms the financial industry and how finance leaders can maximize its potential. Forbes Tech Council experts share insights and tips to help businesses stay ahead of the curve in the rapidly evolving landscape of AI adoption.
This article was originally posted on Forbes Technology Council
Author: Alexander Hagerup, co-founder and CEO of Vic.ai, is a serial tech entrepreneur with a strong passion for artificial intelligence.
AI has been a key part of the conversation around the future of business for years. But while some business leaders have been incredibly excited about the prospects, unclear return on investment has left others feeling skeptical. I believe that is about to change.
With the recent advent of generative AI tools and large language models like ChatGPT, the value of AI is more tangible than ever. Early enterprise adopters are successfully integrating AI into their operations and achieving real benefits, leading to a snowball effect of accelerating adoption.
This is especially true for more corporate and highly regulated environments like finance departments, where providing accurate and timely financial information to stakeholders and ensuring compliance with regulatory requirements are critical. Gartner recently predicted that by 2028, 50% of organizations will have replaced time-consuming bottom-up forecasting approaches with AI.
In our view, the “a-ha!” moment for AI is finally here. But how can finance leaders seize this moment, and how can finance departments best take advantage of AI’s full potential?
Why An Artificial Intelligence Cost-Benefit Analysis Is Still Crucial
AI can transform financial operations and drive significant efficiencies, cost savings and improved decision-making. But does it make sense for every business and in every scenario? Will the benefits of adopting new AI technologies outweigh the costs?
Answering these questions requires careful consideration of potential benefits, costs, feasibility, strategic impact and ethical considerations. By taking a holistic approach, finance leaders can make informed decisions about adopting AI and ensure they derive the maximum benefit.
Most importantly, finance leaders should start with the problem, not the technology. They should review every repetitive and manual operation, rank them in order of effort or cost, and then survey the market for solutions to those problems. Ideally, they will focus their technology investments on solving high-stress problems for which there are relatively low-cost solutions with low barriers to implementation.
Next, finance leaders are ready to weigh the ROI. Here’s how they can go about that in three steps.
1. Assess the benefits
Assess the potential benefits of AI adoption, such as increased operational efficiency in the form of reduced processing times, improved accuracy and precision, and increased productivity, as well as improved decision-making and cost savings.
2. Consider the costs
Consider the potential costs, including investment in technology infrastructure, training and hiring of skilled personnel, and potential risks like cybersecurity and data privacy. It's also essential to evaluate AI systems' ongoing maintenance and support costs, if any, to ensure they remain effective over time.
3. Assess the feasibility of adoption
Assess the feasibility of AI adoption in the context of their organization's existing infrastructure and operations. This involves identifying potential barriers to adoption—such as extreme affinity for using legacy systems or employee resistance to adopting new technologies—and developing strategies to mitigate these challenges.
Accelerating Adoption In Finance Departments
Once finance leaders decide whether AI is right for their needs, here are some considerations to help them effectively accelerate adoption.
Finance leaders should ensure that any technology adopted is reliable, accurate and trustworthy. Finance and accounting play a critical role in providing timely financial information to stakeholders as well as ensuring compliance with regulatory requirements, so accuracy and trust are paramount.
Leaders should also get curious about the landscape of solutions on the market. They should have conversations with technology vendors as well as leverage industry partnerships and collaborations to stay up to date on the latest trends and developments in AI. They’ll get valuable insights and perspectives on the evolution of AI and different use cases as well as emerging risks and opportunities.
Lastly, leaders don’t need to hire an army of AI talent to be able to take advantage of what AI solutions can offer. The majority, if not all, of the AI capabilities available will likely be provided as a platform or come as part of a software suite they use for other purposes. Intelligent procurement is usually more impactful than increased headcount.
Revolutionizing accounting with Artificial Intelligence and beyond
Long before ChatGPT came on the scene, AI was already quietly making significant inroads in finance and several other industries, including healthcare, retail and manufacturing. But this new injection of widespread interest in AI will undeniably accelerate that progress.
I predict we’ll see adoption accelerate twofold this year, as businesses continue to cut back on labor and other costs amidst recession and inflation. In finance, we’re poised for significant adoption of AI in spend management, cost and procurement optimization, waste mitigation, and future spending predictions. Elsewhere, we’ll likely see better chatbots in customer service, AI-assisted legal review, automated energy management systems, improved sustainability and so much more.
This new wave of AI technology is undeniably exciting. And we’re only standing on the precipice of what’s possible.