Artificial Intelligence and the Future of Finance: The CFO perspective

In conversation with Terrence Wampler of Workday, Professor Erik Brynjolfsson, from the Stanford Digital Economy Lab recently made a bold prediction about the impact AI is likely to have on finance leaders. “AI is not going to replace CFOs,” he told Wampler, “but CFOs who use AI will replace those who don’t.”

It’s not only Ivy-League academics who appreciate the significance of this moment. CFOs themselves recognise that AI and ML are already changing the rules of the game and proving a decisive competitive edge. At Workday Elevate, we sought out finance leaders from across the Workday customer and partner community to find out how their roles are changing and what the future has in store for finance teams.

Reducing the administrative burden

AI and ML are already helping many organisations to automate manual, repetitive and labour-intensive transactions and processes, while also detecting anomalies and making recommendations. As a result, finance teams can now process high-volume transactions with increased speed and accuracy, reducing what used to take months or weeks to hours or minutes.

“Manual tasks should not be done by human beings because we need the experts to make expert judgments. We don’t need the experts to do data collection,” said Camillo Werdich, CEO and Founder of Sinpex, a Germany-based compliance software company.

While automation in itself has been transformative, Sam Allen, Checkout.com’s Finance Transformation Director, believes this is just the beginning. “I think AI and robotics will do things we haven’t even thought of asking,” Allen said. This was echoed by Stuart Collins, the CFO at BDO UK: “We’re just scratching the surface of what these new tools can do.”

The evolving role of the CFO

For Brian Montgomery, Senior Director, Finance at Workday, AI and ML are nothing new. “Certainly in my time, maybe 30 years doing this, automation and technology have transformed and changed the look of a finance function in quite meaningful ways,” he said. “AI is the next phase of that evolution.”

Richard Coombes, a Partner in Deloitte’s Human Capital Consulting practice, agrees and is already seeing customers using AI and ML to improve executive decision making. “That's not only using past data to say here's the trend, and make a decision based on that,” he said, “but actually now starting to look at predictive data to say here's my future workforce needs and therefore the skills I require, so smarter future decisions.”

Montgomery agrees and believes the biggest impact AI and ML will have is giving finance leaders real-time insights into what is happening in the business. “Actually, on a day-by-day or even an hour-by-hour basis, AI is starting to tell us, here's what's happening now in your business and seeing what the right thing to do with that new information is.”

AI and ML analytic capabilities are also helping financial institutions meet regulatory requirements and battle cybersecurity threats, two key initiatives that otherwise often involve tedious and time-consuming tasks.

“Reading and analysing regulatory documents and extracting information from them – these are things that AI can do better than human beings,” Werdich said. And unlike people, AI doesn’t grow fatigued.

A need for speed

For Ed Downing, Head of FP&A at financial services company Equiniti, speed is everything. “I guess it's all about availability of data and the speed of responsiveness of an FP&A function or a commercial finance function,” he said. “If you're removing some of that administrative burden or reconciliation burden, improving the quality of the data, then it means that you're already one step ahead. You don't need to wait for someone to assemble a report and check it reconciles before you can then look at the insights and take action.”

Nigel Bryan, Head of Financial Control, NFU Mutual also sees the FP&A function as being one of the earliest beneficiaries of AI and ML, and predicts that it will “increasingly become part of that world”. He foresees that the ability to scenario plan using external and internal data will become a key part of what finance needs to do and will result in “less time looking backwards, more time looking forwards.”

The zero-day close

As well as accelerating FP&A processes, Montgomery is seeing the gears turning faster across the whole of the finance function. As a result he thinks it’s possible to run the finance function in a fundamentally different way and has set his sights on ‘the close’, “probably the most common pain point we all have.” 

Montgomery predicts ‘the close’ could soon be a thing of the past. “We’re now working on decreasing the time it takes to close the books down to zero days,” he said. “ML is transforming our ability to do that in a really efficient way that not only does it faster but improves the process and gets us to better insights in a shorter space of time.”

Equiniti’s Downing highlights a couple of practical ways that Workday is helping to improve the richness of the data on the financial transaction. “When someone is raising a purchase order, and maybe there's a certain supplier or a certain description in the purchase order, then [Workday is] suggesting a particular project code or suggesting the cost centre that it should go to,” he said. “When that transaction ends up in the ledger, it's already accurate. So it just improves the data that's captured against each of those items so that performance reporting becomes more complete.”

As someone who has been a finance leader for over 30 years, Brian Montgomery knows that it’s not always been that easy. Particularly when it comes to getting insight into the business. But AI, he says, is starting to shine light into parts of the business that were difficult to see before. “ML can look at every single transaction. It's been able to do that for a while, but the big change is that it can now give us insights into what's happening in the business from looking at all of the transactions. And that's really, really powerful.” From a finance team’s perspective, it means they can not only determine what's happened, but also shape the future and help the company achieve its strategic goals in a much more efficient and meaningful way.

Creating value 

Richard Coombes thinks AI will be a boon for productivity, not only in the finance function, but across the whole of society. “Productivity in the western world has pretty much flatlined over the last eight, 10 years. There's a huge opportunity and potential in AI to drive productivity in a way that's healthy, that benefits individuals at work and benefits society but increases productivity in the workforce.”

Montgomery believes that CFOs will be in the vanguard of that societal shift. “Accountants, finally, it's our moment. I think it's an incredibly exciting time to be a finance professional because of technology. It allows us to turn our focus into creating value for a business. And isn't that what we all want in our day-to-day work: to be somebody who's creating value for the company we work for?”