AI's Impact on Finance and Accountancy: 5 Key Changes and 4 Ways to Respond

From automating repetitive tasks to enhancing portfolio management and risk analysis, AI is changing the game in finance. Bernard Marr, futurist explores key changes, to help finance leaders navigate this rapidly evolving landscape.

5 Ways AI is Affecting the Finance and Accountancy World:

Automation of Repetitive Tasks 

Robotic process automation (RPA) streamlines and automates mundane tasks like data entry, document analysis, invoicing, and reconciliation. Generative AI can also create financial documents such as reports, statements, and summaries, by synthesising data inputs and using natural language generation.

These technologies reduce errors and free up time for finance professionals to focus on more strategic activities, so teams can work more efficiently, productively, and effectively. 

Improved Financial Modelling 

AI and generative algorithms can develop sophisticated financial models, enabling more accurate predictions, simulations, and scenario analyses. This enables accountants and finance professionals to make better-informed decisions based on reliable insights, which can improve financial planning, budgeting, and forecasting. 

Advanced Portfolio Management 

AI algorithms can analyse data to generate optimal investment strategies tailored to individual investors' preferences, creating personalised portfolios and improving overall investment performance. This technology enables organisations to develop better investment strategies, minimise risks and ensure maximum returns on investments. 

However, there are risks of using AI for portfolio management. AI models can over-rely on past data, which may not accurately predict future market trends — and AI algorithms can be susceptible to errors, which can lead to incorrect investment decisions and significant losses. 

Real-Time Financial Insights 

AI-powered tools can process large amounts of financial data in real time, generating actionable insights that allow accountants and finance professionals to respond swiftly to market changes or emerging trends. This provides organisations with the ability to identify market opportunities, provide more personalised customer service, and optimise financial performance. 

Fraud Detection and Risk Management 

AI can analyse large volumes of data and identify patterns or anomalies, significantly improving the ability to detect fraud, assess credit risk, and make more informed investment decisions.

4 Ways to Respond to AI in Finance and Accountancy

Develop Expertise in AI and Generative Technologies 

Finance professionals should invest in understanding and mastering AI and generative tools to stay ahead of the curve and leverage these technologies effectively. This will enable them to take advantage of the benefits of AI and generative technologies and leverage them to automate tasks, improve financial modeling, and reduce risks.

Of course, accountants and other team members must use their professional judgment when assessing the outputs of generative AI tools like ChatGPT. Verification and fact-checking are crucial parts of working with these tools.   

Foster a Culture of Innovation and Adaptation 

To fully harness the potential of AI, organisations should cultivate a culture of agility and innovation, encouraging their finance and accountancy teams to remain open to change and continuously seek ways to improve processes.

For instance, leaders can encourage employees to attend training sessions and conferences on AI and provide opportunities for them to experiment with artificial intelligence technologies in a safe and controlled environment. This will help to foster a culture of innovation and drive the adoption of AI technologies that can improve efficiency, reduce risk, and optimise financial performance. 

Prioritise Data Quality and Management 

High-quality data is essential for obtaining reliable results and insights from AI — and that’s why organisations must ensure that data used by AI and generative algorithms is accurate, consistent, and secure.

Leaders must prioritise data management practices to ensure data is collected, stored, and managed effectively. 

Address Ethical Concerns and Ensure Regulatory Compliance 

Organisations must develop guidelines and policies to ensure the responsible use of AI and generative technologies. This should include rules about maintaining transparency and addressing potential biases.

And because the financial industry is highly regulated, every effort must be made to conform to relevant rules and industry standards when using artificial intelligence technology.

Embrace AI for the Future of Finance and Accountancy

The impact of AI on the finance and accountancy world is significant, providing organisations with the ability to automate tasks, generate reliable insights, and improve financial performance.

With the right strategies and tools, finance and accountancy professionals can navigate this rapidly evolving landscape and thrive in the years ahead.

Bernard Marr is a world-renowned futurist, influencer, author and thought leader in the fields of business and technology.

Main image: Bernard Marr