How to elevate finance value through Generative AI

As featured on BusinessMirror:  How to elevate finance value through Generative AI

Generative AI (Gen AI) is currently causing a buzz across the commercial world. While artificial intelligence and machine learning have been successfully applied to specific problems for some time, the ability of Gen AI to generate new content and its accessible user interface makes it hugely relevant to a broad spectrum of organizations as well as to their finance functions. AI might not be new, but it is moving very fast, and CFOs need to think differently and quickly understand how to leverage it.

A marriage of Gen AI capabilities and finance can create better speed and efficiency by eliminating redundant or manual activities, allowing finance professionals to focus on higher value tasks. But like its predecessors, Gen AI is only as good the underlying data and well-engineered prompts and will only be effective when it is embedded in the right way within the finance function.

With only 57% of respondents from the KPMG 2023 Global Technology Survey believing that Generative AI will be most important in helping their business achieve its short-term ambitions over the next 1-3 years, there is scope to allay some fears and support more risk averse potential adopters to understand what is possible and how to implement safely.

KPMG professionals believe that CFOs and finance functions are well positioned to lead the way with Gen AI. Finance already has a key role in driving the execution of organizational strategy, creating and protecting value and shaping an effective enterprise architecture and are often tasked with data stewardship. In addition, finance functions are ripe with potential opportunities to disrupt themselves and harness the power of Gen AI across five broad enabler categories: a) Content and Insight Generators; b) Information Extractors; c) Smart Chatbots; d) Language Translators; and e) Code generators.

By unlocking the power of digital, AI has the potential to deliver significant value to the finance function.

KPMG professionals have learned from work around the Future of Finance that leading organizations are investing heavily in effective business partnering, focusing on competencies such as impactful storytelling, empathy, and leadership. The ability to tell a story behind the insights is more important than ever.

This can help CFOs a) deliver faster and more insightful analysis across organizations; b) enable tailored commentary and rapid fire ‘answers’ to stakeholder questions; c) forecast through text to reasoning to help CFOs ‘predict’ the results; and d) help identify risks and potential new strategies for tackling recurring problems.

The power of Gen AI is magnified when it can be used across functions to break down silos within the organization, achieving scalable AI solutions across the enterprise and unlocking cost savings.

For example, the period end close process can be challenging for organizations, even those using a cloud enterprise resource planning (ERP) system. Leaders often struggle to get timely and insightful information that supports better decision making. They face issues such as inefficient processes, limited access to real-time data, and workforce burnout, all of which can hinder decision-making.

CFOs navigating the growth of Gen AI must consider the multitude of risks, including data protection, false or biased decisions, compliance with regulations, upskilling, intellectual property, and environmental sustainability. Mitigating these risks requires a strong Gen AI Strategy, operating model, and governance structure. Effective risk management is crucial for organizations to prioritize in order to mitigate these risks.

Implementing ‘point-AI’ solutions here and there across the finance function is unlikely to deliver significant long-term benefits. In fact, it could create a legacy problem for tomorrow. Instead, organizations should adopt a more strategic approach, in which Gen AI can align with, and enhance, your existing finance transformation initiatives and is embedded within your operating and technology model.

By the nature of it, a program of Gen AI implementation is heavily data-ready centric. To get the best results requires focus on the Performance Insights & Data Layer of the Target Operating Model. For most organizations, there’s much to do around data to be able to exploit it to the full. Therefore, it is important to work with partners that have the right combination of data skills, together with the experience of how to maximize the capability of data within an AI enabled finance function.

The KPMG Powered Enterprise transformation methodology adapts well to the world of Gen AI and the disciplines required to deliver it in finance. This is especially so around vision, data architecture, talent upskilling, value realization and intercepting emerging tech — as well as providing an effective framework for deploying (and maintaining) responsible AI.

KPMG professionals can guide you through what is needed to enable responsible Gen AI and other leading practices across and beyond your finance function, including full finance transformation or optimizing your finance operating model.