How to unlock the power of AI in Finance
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
The future of work continues to evolve with AI-based solutions leading the change. To get an in-depth perspective on this shift we sat down with Adam Shilton , senior business advisory consultant at Thinc and founder of Tech for Finance, to hear his insights. Here's what we learned …
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The ever-evolving relationship between AI and Finance
Finance has a complicated relationship with technology, particularly AI. However, Adam made it clear during our conversation that AI is not simply a disruptive force but when put to well-thought-out and considered applications can be a highly transformative one as well.
Because it offers finance professionals new ways to engage in decision-making and create strategies it also improves outcomes. As Adam explained, “The real revolution is not just in time saved but in the quality and depth of the insights that can be derived.” It’s about quantity and speed but much more about quality.
How to overcome the challenges in adopting AI for finance
Adopting new technology is never straightforward, especially in a highly regulated and core business area like Finance. If taken together and identified early, with proper change management frameworks and trusted internal relationships, making positive changes is not only possible but also becomes likely.
Embracing trust and security
As Adam told us “Firstly, there's the trust factor. When you're dealing with financial data, you want to be absolutely certain that it's secure and accurate.
This is especially important in industries that are highly regulated, there’s a reluctance to adopt new technologies that haven't yet proven their reliability.”
A way to overcome this is to build trust with proven use cases and ensure a wide stakeholder base whose concerns can be noted and worked on.
Filling in the skill gap
Secondly, as Adam notes, there's a skill gap. “Many finance professionals are not trained to interact with these new technologies. They need to learn not just how to use the tools, but also how to interpret and act on the insights generated.”
That is key. There is a technical element to overcome but that is an area where people can be upskilled. The next level up is making full use of the new technologies and capabilities to help with strategic elements of the business, like decision-making and the planning cycle.
Being conscious of costs
“Thirdly, there's the cost factor. Initial setup and implementation can be expensive, and not all companies are willing to make that investment without guaranteed ROI,” Adam said.
While the implementation of revolutionary tools can be expensive and time-consuming, which is also a put-off for some organizations, being able to accurately demonstrate how they can add value requires specific use cases and practical examples where customers or clients benefit from the new tools and ways of doing things.
Making small steps to create big change
When it comes to AI adoption and other automation technologies, Adam advised starting small.
“Pick a project or a specific use case where you think automation and AI can bring immediate value,” he suggested. In this way, you’re able to assess the effectiveness and usefulness of the technology before committing more resources to it. It’s similar to the agile methodology of minimum viable product and iteration to achieve the project goals.
So what sort of use cases might there be and what sort of outcomes could we hope for?
Key takeaways from our conversation
1. Accelerating processes and shifting roles in finance
“The real revolution is not just in time saved, but in the quality and depth of the insights that can be derived,” he told us. This implies a shift in roles, as finance professionals can now focus more on strategy than on number-crunching. There are quick wins to be had where AI accelerates traditional processes and gives us a clear area to focus on.
2. Challenges in technology adoption
According to Adam, the main challenges in adopting new technologies in finance are trust, skill gap, and cost. He points out, "When you're dealing with financial data, you want to be absolutely certain that it's secure and accurate." Moreover, many finance professionals are not trained to use or interpret AI tools yet, and initial setup can sometimes be costly.
3. Starting small for successful adoption
For those hesitant about adopting AI, Adam advises starting small with a specific project or use case that can demonstrate immediate value. He suggests, "Once you start seeing the benefits in that specific area, it becomes easier to justify further investment."
4. Generative AI's practical applications
Adam explains that one of the quickest wins in using generative AI in Finance is in text-based administration tasks. He mentions, "You can use ChatGPT to tell Noteable what you want to do with the data," which shows the technology's adaptability and utility in areas that already exist, including complex data analysis.
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5. Evolution and accessibility of AI
We found it interesting that Adam perceives a shift where AI is becoming more accessible to smaller businesses. He discussed specific examples of existing technology within tech stacks that could be enhanced or adapted to better work to AI’s strengths.
Accelerating processes and shifting roles in Finance
While the potential of AI in Finance is as staggering as it is unpredictable, the adoption rate is still a work in progress and will continue for a long time. Have you gotten on the AI train already or are you still on the fences?
This was the tenth article in our new series "Demystifying AI in Finance & Accounting". Remember to subscribe to catch the upcoming articles and read the previous ones below.
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Anders Liu-Lindberg is the co-founder and a partner at Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 11,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 300,000+ followers. I am also an advisory board member at Born Capital where I help identify and grow the next big thing in #CFOTech. Finally, I'm a member of the board of directors at PACE - Profitability Analytics Center of Excellence where I support the development of new analytics frameworks that can improve profitability in companies around the world.