- 72% of Australian and global companies are using AI in their financial operations
- Two-thirds of business leaders saying ROI is exceeding or at least meeting, their expectations
- Financial reporting is the most common usage area – AI so far is less common in tax functions
- Three-quarters of leaders are developing principles and guidelines on responsible use of AI, to overcome potential barriers
The KPMG global AI in finance report – a survey of 2,900 organisations across 23 countries, including 100 in Australia – found that 72% in both Australia and internationally were now using AI in some form in their finance operations. In this country, 35% were using it to a ‘moderate to large’ degree while this was the case for 41% of overseas companies.
44% of Australian respondents (42% globally) said they were piloting AI in financial reporting, with 26% (24% globally) using it selectively. Over the next 3 years, 61% of Australian companies and 52% overseas said they would be using it selectively.
Accounting and financial reporting was the most common usage area – with tax further behind, along with risk and treasury operations.
In terms of ROI, 42% of Australian and 36% of global companies said it was meeting their expectations, while 20% of domestic and 25% of overseas organisations said their expectations were being exceeded. 13% of Australian companies and 11% globally said ROI was lower than they had hoped.
Nikki Stone, KPMG Audit Technology and Innovation Director, said: “The survey reflects what we are seeing in the market – that usage of AI in finance departments is growing fast, with ROI benefits exceeding respondents’ expectations, showing that organizations are finding real value from the use of AI. It is especially encouraging to see that leaders in the AI space are prioritising the responsible use of AI and AI governance, to address the potential harms of AI use as they realise these benefits.”
Details
Specifically on Generative AI, 45% of Australian (and 47% of global) companies were planning how to use it and 36% (30%) were piloting it. But a significantly larger number of Australian businesses (13%) had no plans to use GenAI; only 1% of global firms said this. The key benefits so far of AI take-up were found to be ‘better data-enabled decisions’; ‘real time insight’; ability to predict trends’ and ‘increased data accuracy and reliability’. Robotic process automation was the top Australian answer for the area where most value had been added.
The study showed that companies are turning to AI in every area of corporate finance. Most organisations were using, piloting or at least planning AI for reporting, accounting and financial planning. Treasury and risk management were slightly lower in their usage levels – with the potential benefits seen as generating better debt management, cash-flow forecasting, fraud detection, credit risk assessment, and scenario analysis in the treasury and risk management functions.
Tax management, however, sits further behind. In Australia, 37% were piloting or selectively using AI (only 31% globally) although 38% (48% globally) are in the planning stage. A minority (22% Australia, 18% global) had no plans to introduce it all at all for tax.
David Sofra, KPMG Chief Technology Officer – Tax, said: “AI usage in tax functions is growing steadily but may still be further behind other finance functions for a variety of reasons – including the complexity of tax regulations, a lack of up-to-date data, onerous legacy systems, and the reliance on human judgment for many tax-related decisions.
“This reflects a change that we are starting to see. Six months ago tax leaders were approaching AI tentatively – this is changing with usage growing and many exploring the opportunities it offers, whilst also balancing this with the risks and challenges it presents in a highly complicated tax landscape.”
Concerns
To increase the use of AI, leaders are taking steps to overcome known barriers to its adoption. More than half both locally and internationally said they have developed corporate principles and guidelines on the responsible use of AI.
Other steps included: involving technology leadership in systems integration discussions; creating digital processes to keep up with regulatory and compliance changes; investing in acquiring and developing AI skills and talent; ensuring leadership commitment to AI and communication; ensuring stakeholders understand how AI models work and their limitations.
Importantly, a quarter of both Australian and overseas leaders said they planned to increase AI budgets or shift resources from other activities, in order to address the issues.
Interestingly, there was overall less concern about the accuracy of non-generative AI in Australia than elsewhere. Only 29% here said they had a large concern, compared to 44% globally. It was a ‘small’ concern to more leaders here (46%, compared with 36% overseas). But for GenAI, the figures were more consistent – 43% Australia, 45% global said they had ‘large’ concerns and 46%/48% small concerns.
Audit
Respondents were also asked about their external auditors. More overseas respondents (40%) felt their auditors understood their company’s AI ‘well’ than in Australia (31%), although a higher proportion of leaders here (37%) believed the use of AI, along with D&A and automation, were important in the work of their auditors than globally (32%).
When asked what would you like your auditor to do for your company using GenAI, top answers both in Australia and overseas were: risk mitigation and internal controls; fraud detection; risk anomaly detection and data analysis/quality management.
For further information
Ian Welch
KPMG Communications
0400 818 891
iwelch@kpmg.com.au
