KPMG global AI in finance report

As featured on BusinessMirror:  KPMG global AI in finance report

In companies around the world, Artificial Intelligence-empowered finance teams are emerging — a development that is generating a rich range of benefits to organizations. These include increased efficiency and accuracy, reduced human error, faster and better data-based decision-making, lower costs, and improved regulatory compliance.

KPMG conducted a global AI finance study in April 2024, surveying CFOs and finance executives from 2,900 companies across 23 countries and territories and six industries. The research shows that the use of AI is rapidly expanding across finance: 71 percent of companies are using AI in finance, 41 percent of them to a moderate or large degree. Organizations in North America, ASPAC, and Europe are furthest ahead, while those in the Middle East, Africa, and Latin America, comprising mostly emerging markets, are the furthest behind.

Companies are turning to AI in every area of finance. According to the findings, the accounting and financial planning groups are furthest ahead in using AI because of the potential benefits it brings to many of their activities, from improved data processing and financial reporting to real-time insights and predictive analysis. Currently, nearly two-thirds of companies are piloting or using AI for accounting and financial planning.

Other areas of finance are following suit: nearly half of companies are now piloting or using AI for treasury and risk management. This can generate better debt management, cash-flow forecasting, fraud detection, credit risk assessment, and scenario analysis in the treasury and risk management functions.

In the Philippines, finance functions are embracing AI to improve operations and stay competitive. AI streamlines financial reporting, optimizes cash flow management, and enhances fraud prevention. By automating routine tasks, teams can focus on critical functions like forecasting and decision-making. AI also offers deeper insights into financial performance, enabling more informed decisions. This shift is transforming finance departments into more agile and efficient teams, ready for the future.

Leaders are moving fast to develop different uses for AI that will free up financial staff to focus on high-level tasks. These use cases show the art of the possible for other companies exploring AI options.

On average, leaders have six use cases for AI, almost double the number that others have developed. Leaders are well out front in the use of Gen AI for composing documents and summaries. Leaders are also ahead of others in more mundane uses of AI, such as for administrative tasks, performance evaluation and training, and data entry — use cases for about half or more of leaders. 

Financial executives are not naïve about AI. They know it comes with a set of limitations and risks. And Gen AI is heightening their apprehensions due to its ability to independently generate content and analysis from massive data sets.

In fact, concerns about Gen AI are greater than those around traditional AI across most spheres. Cybersecurity and data privacy are the most prominent concerns given Gen AI’s potential to draw on sensitive and proprietary data. By introducing new tools and systems, it also expands the attack surface for bad actors to exploit.

Gen AI has become the ‘hot ticket’ in the AI arena, generating huge interest and discussion. However, Gen AI presents unique challenges and is more complex than some forms of traditional AI to embed into processes.

But while it is tracking further behind traditional AI, Gen AI is firmly on the agenda for financial reporting.

Leaders are far ahead — almost four out of 10 are already selectively or widely adopting Gen AI in financial reporting, compared to only a tiny minority (3 percent) of others. Considerably more leaders are prioritizing Gen AI for financial reporting over the next year compared to traditional AI. As a result, 95 percent leaders expect to be selectively or widely using Gen AI in financial reporting in three years’ time — compared to 39 percent of others.

As with AI overall, progress is somewhat slower in the 13 additional markets surveyed. Nevertheless, the fact that half of organizations in these countries expect to be selectively or widely using Gen AI in the next three years is a striking statistic that demonstrates the scale of the shifts to come.

At KPMG, we have made major investments in AI technology through our alliances with Microsoft and other major technology providers that help to place KPMG firms as leaders in AI understanding and deployment.