After years of advancing quietly and overcoming setbacks, AI has finally exploded onto center stage and is disrupting our daily lives.
The widespread adoption of AI is changing the way we work and how customers interact with service providers. Generative AI tools like ChatGPT are gaining serious momentum as its capabilities and applications rapidly expand and drive business value.
When it comes to the world of finance, CFOs are already championing the success of finance transformation in financial planning and analysis (FP&A) for organizational prosperity.
This, coupled with the fact that AI, advanced analytics, and machine learning are reshaping the face of financial planning and analysis, FP&A professionals might well be wondering how AI will impact the role of financial analysts.
What does AI mean for finance professionals?
The AI frontier is constantly advancing with new and thrilling applications being discovered across all business areas, including corporate finance.
In fact, Gartner identified five of the top use cases of AI in finance for delivering business value and feasibility.
For a comprehensive overview, head over to our practical guide to AI in finance. It’s the perfect way to discover how the fascinating topic of AI is impacting finance teams.
From quickly analyzing vast quantities of financial data to automating routine processes like budget approvals, the use cases of AI in finance are making a positive impact.
Given the incredible potential of AI, should you as an FP&A professional be preparing yourself for AI replacing the role of finance analysts?
AI applications transforming the finance function
Organizations everywhere are jostling to integrate AI into their operations to gain a competitive advantage. Gartner boldly predicts that finance outsourcing for AI process technologies will rise from 6% to 40% by 2024.
It’s an exciting time for those with strategic finance roles given the transformative impact of AI in FP&A and other finance functions. In fact, AI is one of the seven key FP&A trends of Q1 2023.
So how can AI help finance teams deliver greater value to their organizations? Let’s take a look at some of the ways that AI is automating time-intensive tasks:
Automated workflows
High-impact FP&A teams are automating workflows. Historically time-intensive activities like budget approvals and invoice processing are having a much-needed make-over.
Data management
Want someone else to do the heavy-lifting? AI-powered data management collates and processes vast quantities of information, putting crucial data points at your fingertips faster than ever before.
Risk management
AI is a game changer for risk management, especially in financial services. Its ability to learn continuously using new data enables it to help organizations manage credit risks and make access to capital more equitable.
Is AI coming for my finance job?
Humans have long feared machines becoming sentient and taking over.
Surprisingly, the movie industry has played to this fear for almost 100 years, with the 1927 German sci-fi movie Metropolis initiating this movement. But for now, the concept of AI taking over still isn’t entirely convincing, no matter how good the visual effects.
When it comes to the corporate world and strategic operations, AI is revolutionizing business planning and driving efficiencies and profitability in the process. So could AI replace finance jobs?
AI will eliminate low-impact tasks
The real value of AI lies in its ability to carry out repetitive, mundane tasks that leave humans climbing the walls. It’s these aspects of finance analysts roles that will be taken over.
AI can power up finance teams by taking care of some of the more repetitive tasks. This will free up valuable time for more high-impact activities.
Forward-thinking companies perceive AI as a promotion for finance teams and simply “removing the uninteresting part of the work” according to Romain Niccoli, Pigment’s Co-CEO.
Balancing risks with benefits
It’s not all champagne and roses though.
In the words of Nikhil Rathi, Chief Executive of the FCA, “AI can amplify risk as well as benefits. It is vital that this sector can harness the value of AI for the benefit of society at large, to consider the ethical and social dimensions of AI”.
Importantly, regulation is on the horizon as the European Commission’s proposed new legislation will provide more specific parameters for the use of AI.
Where machines fall short
AI can’t replace the complex critical thinking skills or creativity of a seasoned finance analyst. Nor can it prioritize in a way that aligns with your business’ unique needs and goals. And as for data privacy and compliance risks, AI needs to make serious improvements.
How AI is redefining finance roles
We know that FP&A teams play a vital role in organizational success. And now, a growing number of CFOs are adopting AI in FP&A to improve efficiency, reduce operating costs, and open up new business opportunities.
As AI-powered tools become more embedded into organizations, FP&A analysts will have greater capacity for more creative and strategic pursuits.
The opportunity to engage in human-centered activities like setting priorities, influencing decisions, genuine collaboration, and communication will promote FP&A analysts to business partners in the organization.
This makes the concept that AI will replace finance jobs more palatable. However, finance leaders recognize the need to manage AI-related risks and the continued need for humans to interpret AI-generated reports and decisions.
A forward look at next-gen finance teams
Super powers like spotting hidden patterns in data and giving more accurate predictions about future trends make AI the newest strategic partner for FP&A teams.
Next-gen finance professionals are interacting with AI on a daily basis and this will only become more widespread.
This symbiotic mix of humans and machines is perfectly illustrated by Pigment AI, our OpenAI powered FP&A tool that’s making business planning as easy as a conversation.
Learn more about Pigment AI.
