How AI super-powers finance systems

Digital technologies are transforming every aspect of our professional and personal lives.

While certainly disruptive, and often the brunt of doomsday futurists, innovations like artificial intelligence (AI) present enormous possibilities to make things work better. They also add some exciting sparkle to traditionally dour (but very important) professions such as financial management.

Shiny new image aside, AI is set to transform the financial management sector into a body of strategic, informed, and responsive consultants.

Winds of change

There is no doubt that the COVID-19 pandemic has accelerated digital transformation, encouraging many finance professionals to harness the benefits of AI to meet their clients’ changing expectations.

The well-timed Sage CFO 3.0 research surveyed South African CFOs and other senior financial decision-makers for their views on the role of digital technologies, such as AI, in navigating uncertainty and preparing for the new working world.

A clear majority of respondents (87%) are involved in their companies’ digital transformation processes and say that success in their roles will require advanced financial management technology. What’s more, 86% of CFOs believe that financial management technologies can help their businesses reduce risk and identify new opportunities.

Given this definitive shift towards full-scale adoption and implementation of relevant digital technologies, financial firms need to digitise their processes, people, and practices to maintain synchronicity with their clients.

Human and digital workforces unite

Traditional financial management processes rely on monthly, quarterly, or yearly cycles that throw professionals into number-crunching chaos as deadlines approach. No matter how experienced these professionals are, their manual slog is prone to errors, particularly when the work is repetitive, cumbersome, and stressful.

The power of AI is that it provides a seasoned human workforce of financial gurus with digital tools that can crunch the numbers without making mistakes, mine financial data for actionable insights, and improve professional relationships with clients. What’s more, it can do all this continuously and in real-time, not just at certain points on the financial calendar.

This means that AI can make financial management smarter, faster, and interestingly, more human. Accountants are no longer resigned to the back rooms with their abacuses. Thanks to the support of AI-enabled tools and processes, today’s accountants and financial managers have the time and knowledge to give their clients valuable attention and advice.

It’s important to remember that the transformative application of new technologies and digital tools is only realised when people put them to use and experience their benefits.

Continuous compliance builds trust

Financial management is monitored by audits, assurances, and regulations to ensure compliance. In a traditional set-up, these watchdogs of financial activity are often more reactive than proactive, catching up with most wrong-doings (and wrong-doers) after the fact.

An AI-empowered financial management system continuously checks for irregularities. Its ability to disseminate volumes of data in real-time to flag potential problems – as well as opportunities – keeps financial managers in control and accountable to their clients.

It’s essentially a continuous audit – which might sound like a horror movie to some who are all too familiar with the painstaking job of combing through transactional records to find anomalies. But therein lies one of the transformative benefits of an AI-enabled financial system: Its ability to continuously review large volumes of financial data and detect irregular activity in real-time provides financial managers with on-the-money information.

Freed from doing the grunt work and armed with intelligence, finance teams have time and knowledge to ensure consistent compliance, make informed, relevant decisions, and ultimately, build greater trust with key stakeholders.

24/7 intelligence

Forecasting, in the traditional sense, is a resource-heavy process that requires time and money. Given its costs and requirements, commissioning or obtaining reasonably accurate forecasts is only doable once or twice per year. At least that was then.

Now, AI-powered forecasting can dive into an ocean of data, analyse it at high speed (without compromising accuracy), and deliver actionable, predictive insights. AI-enabled financial systems continuously pull data from a variety of relevant sources, such as transactional records and customer demographics, to feed finance teams with intelligence. These insights don’t just inform better decisions in the present; they help financial professionals make better predictions about the future.

AI doesn’t sleep. It’s always watching and detecting patterns or exceptions that could affect future plans – and flagging them in good time for immediate action. For example, in tough economic times, AI can analyse data to forecast a business’s cashflow and deliver predictions that will inform relevant action to help steer the business towards new opportunities.

Also, by analysing customer behaviour data, AI can uncover patterns that improve customer acquisition and retention strategies with informed insights. As a result, financial management firms can fulfil their new roles as advisors and help their clients prepare for financial challenges – as well as business opportunities – well in advance.

Smarter, faster finance teams

Financial systems that are super-powered with AI can perform myriad impressive actions that deliver real value. Its ability to mine data for predictive intelligence at breakneck speed is not to be scoffed at.

However, AI’s most valuable transformation has less to do with numbers and patterns, and more to do with people. Many financial professionals still worry that AI will replace them. This could not be further from the truth. By harnessing the powers of AI, financial leaders and management firms are themselves super-powered with time and intelligence. These valuable commodities are crucial to meeting their clients’ increasing demands for strategic advisors who can help guide their businesses now and into the future.