Easing financial nerves with artificial intelligence

By Nick JacksonHead of Finance Transformation, Oracle

In 2022, global anxiety seems inevitable. From climate change to the continued impact of Covid-19, we face challenges that affect everyone across the globe. Business leaders are not exempt from this fear. They are expected to build strong and resilient businesses despite adversity, so the weight of responsibility is ever-present.

So it won’t be a shock that financial anxiety and stress have increased 213% among companies leaders in the UK over the past two years, with nearly nine in ten people saying they felt greater financial fear and sadness.

Nearly a third of business leaders have worried about bankruptcy during the pandemic, which undoubtedly leads to anxiety and fear. To beat this and stay resilient and well-positioned for growth, leaders need to focus on what they can control. When it comes to money, better financial control means staying on top of digital transformation. Leaders realize that valuable time is wasted on repetitive financial tasks, depriving those resources of strategic problem-solving issues that need special attention.

So what tech avenues should they invest in to help ease the pressure?

Technology for smart decision making

Robotics, AI, and machine learning are key to relieving leaders from the burden of operational anxiety. In fact, 81% of UK business leaders believe that organizations that do not redesign finance processes will face more risks, including falling behind competitors, increasing employee stress and generating inaccurate reports.

When asked to make high-level financial decisions in response to a crisis, business leaders cannot afford to waste time getting bogged down in operational details or making process-heavy decisions. By taking control of where energy and precious human resources are invested, smarter decisions can be made, alleviating fear and building resilience.

Digital transformation through the integration of AI and machine learning is revolutionizing financial processes and, therefore, the business at large. Like our recent search on the impact of technology on our relationship with money, more than three-fifths of UK business leaders would trust a robot rather than themselves to perform finance-related tasks. Additionally, 77% say they want the help of a robot for key financial tasks; the main four being approvals, budgeting and forecasting, reporting and compliance, and risk management.

We are seeing a wave of investment in AI and robotic process automation, as more and more leaders accept that these new technologies represent the way forward. To take full advantage of them, finance leaders need to ensure they are integrated into core finances, not just securing them as one-time savings. Doing this correctly puts this technology to work; allowing algorithms to learn behaviors, anticipate and predict. It also allows finance managers to manage risk more robustly and identify trends more easily.

AI to drive business transformation

As Clement Christensen, Director of Gartner, puts it, “AI will likely be the most important investment you will make in finance over the next 10 years.”

Further away warn analysts, “Through 2024, companies will be forced to accelerate their digital transformation plans by at least five years to survive in a post-Covid-19 world.”

However, to reap the real benefits of digital transformation, the use of AI must go beyond simple financial automation. As Deloitte recognizes that “by 2025, the role and value of the financial organization will be less about manual transaction processing and more about automating and streamlining processes. Finance will focus less on posting journal entries and reconciling data, and more on delivering value and services that drive improvements across all business activities.

In today’s digital workplace, using AI and robotics to automate day-to-day business processes such as invoicing or expenses should be seen as a low-level must-have, not the pinnacle of modernity. In short, “AI should do more than just modernize. It should transform your business,” says Christensen of Gartner.

Leverage data and take back control

From RPA (Robotic Process Automation) to smart chatbot applications, blockchain and IoT, new financial technologies are delivering improved visibility, compliance, reporting and experiences for higher-level employees.

These technologies are proving to be truly transformational in the way they facilitate high-level analysis and decision-making. A company’s data is its most valuable asset, especially in today’s climate of uncertainty. In finance, understanding risks and ever-changing market trends is critical to success. However, few finance teams make the most of their data. They don’t have the time, resources, expertise, and tools to sift through mountains of data to extract useful insights, especially when they’re still focused on repetitive operational tasks.

Embedding AI solutions into financial data can reveal insights and opportunities otherwise lost in swaths of information that humans alone cannot tap into. AI can be used to leverage data to improve financial performance, optimize cash flow, and increase agility in accounts payable, accounts receivable, purchasing, and inventory. These programs are able to discern subtle patterns from data sets, which no human could spot or transform into information with the same efficiency.

Finance professions will evolve

Using robots to facilitate our tasks has the potential to reshape the way we build organizations. This will strengthen the role of finance professionals, enabling them to fulfill different roles that bring even more value to organizations. Traditionally, the finance function was a pyramid, the base of which was a large number of employees performing transactional processing, often at the start of their careers. The majority of this work will now be done by AI systems. The days of manual accounting will soon come to an end.

But that doesn’t make the finance professional’s role redundant. On the contrary, it signals the start of a more rewarding career in finance, pushing teams to focus more on creating value for the organization instead of the stress and boredom of working on lines of data in Excel spreadsheets. This will require an understanding of tools and systems, how to use them and how to get the most out of them. The adoption of AI systems will mean that financial professionals will develop new skills, whether it is data analysis, cybersecurity or manipulation of ML algorithms. It will also put more emphasis on developing the soft skills we need to be better business partners and to think more strategically.

Facing challenges head-on

By automating processes and pulling important insights from robotic colleagues, the CFO’s office has more time to play a strategic role. This means more bandwidth to drive initiatives and exert greater influence over business direction.

As Gartner’s Christensen warns, time is running out to embrace AI for finance transformation. As businesses seek to navigate an uncertain post-Covid world, their crucial energy is being spent where it’s needed most and leaders are taking control of operational burdens. In doing so, they can seek new and innovative ways to respond to the challenges of ongoing and evolving external crises.

Fear can make or break. But in times of crisis, there are opportunities. There’s only one solution for businesses to secure their financial future: embrace next-generation technology. It is crucial that they use AI to their advantage for transformation, not as a one-off, but as a long-term strategic imperative. This will ensure that they don’t just survive, but thrive throughout the crises presented in our modern world.

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