Generative AI, also known as Gen AI, is rapidly gaining attention in the business world, particularly in finance functions. While artificial intelligence and machine learning have been successfully applied to specific problems, Gen AI stands out for its ability to generate new content and its user-friendly interface. This makes it highly relevant to a wide range of organizations, including their finance departments.
The marriage of Gen AI capabilities with finance functions can bring about increased speed and efficiency by eliminating redundant or manual activities. It allows finance professionals to focus on higher-value tasks. However, the effectiveness of Gen AI depends on the quality of underlying data and well-engineered prompts, as well as its proper integration within the finance function.
According to the KPMG 2023 Global Technology Survey, only 57 percent of respondents believe that Generative AI will play a crucial role in helping their businesses achieve their short-term ambitions in the next 1-3 years. This indicates a need to alleviate fears and support potential adopters who may be hesitant. It is important to help them understand the possibilities and how to implement Gen AI safely.
KPMG professionals believe that CFOs and finance functions are well-positioned to lead the way with Gen AI. Finance departments already play a key role in driving organizational strategy, creating value, and shaping effective enterprise architecture. They are also responsible for data stewardship. Finance functions offer a wealth of opportunities to disrupt themselves and harness the power of Gen AI across various categories, including generating content and insights, extracting information, using smart chatbots, translating languages, and generating code.
By leveraging the power of digital technology, AI has the potential to deliver significant value to finance functions. One real-world example is the use of Gen AI to provide insights and tell stories. Leading organizations are investing heavily in effective business partnering, focusing on competencies such as impactful storytelling, empathy, and leadership. CFOs who can deliver faster and more insightful analysis across organizations, enable tailored commentary, and predict results through text-based reasoning can drive better decision-making and identify risks and strategies for recurring problems.
The true power of Gen AI emerges when it is applied across functions to break down silos within organizations. This allows for scalable AI solutions that unlock cost savings. For example, organizations often face challenges during the period end close process, including inefficient processes, limited access to real-time data, and workforce burnout. Gen AI can address these issues and provide timely and insightful information for better decision-making.
CFOs must also navigate the risks associated with Gen AI, such as data protection, biased decisions, regulatory compliance, upskilling, intellectual property, and environmental sustainability. To mitigate these risks, organizations need a strong Gen AI strategy, operating model, and governance structure. Effective risk management is crucial for organizations to prioritize.
When implementing Gen AI, it is important to take a strategic approach that aligns with existing finance transformation initiatives. Simply implementing AI solutions here and there may not deliver significant long-term benefits. Organizations need to focus on the performance insights and data layer of their target operating model. This often requires working with partners who have the right combination of data skills and experience in maximizing the capability of data within an AI-enabled finance function.
KPMG’s Powered Enterprise transformation methodology is well-suited for the world of Gen AI. It covers key aspects such as vision, data architecture, talent upskilling, value realization, and intercepting emerging technologies. It provides an effective framework for deploying and maintaining responsible AI.
In conclusion, Gen AI has the potential to revolutionize finance functions, driving efficiency and innovation. By embracing Gen AI, CFOs and finance departments can enhance their ability to deliver value, make faster and more insightful decisions, and break down organizational silos. However, it is crucial to address risks and challenges, align Gen AI with finance transformation initiatives, and prioritize effective data management.
