How generative AI helps finance teams

Generative AI describes AI tools that are capable of creating content, be it text, images or even synthetic data. Such is the power of generative AI that there has even been talk of the “digital CFO” in the context of a piece of software that can negate the need for a human CFO altogether, along with the associated salary and benefits. 

Generative AI’s contribution to decision-making cannot be overstated. Even in a static environment, we have seen how it can increase the speed and reliability of decisions.

But today’s business environment is far from static. A survey carried out by Gartner in 2021 found that two thirds of the business decisions made today are more complex than they were two years ago. This is either because they involve more choices, more stakeholders or both.

AI can be used to increase the speed and confidence of decisions in three ways: 

1. Decision automation. The generative AI system makes the decision on the basis of either prescriptive analytics or predictive analytics. This sort of decision-making is being used in insurance technology (insurance tech) to dramatically speed up the payout process, for example. 
2. Decision augmentation. This works on the same basis as automation, but the system stops short of acting on its decision. Instead, it presents a recommended course of action, or a shortlist of options, to the human user, who can then make the final decision, backed up by the significant analysis that has been performed by the AI.  
3. Decision support. The AI provides data-driven insights and the user considers these alongside human knowledge, experience and “gut feel” to arrive at a solution. 

The complexity of today’s decision-making needs means that standing still is tantamount to going backwards. In the business environment of the 2020s, some degree of AI assistance in the decision-making process is essential.

The businesses that can make the best use of the tools at their disposal and understand which type of automation, augmentation or support is most appropriate are the ones that will leverage a true competitive advantage. 

Finally, when looking at how generative AI helps finance teams, let’s not overlook the simplest but often most impactful aspect. We talked dismissively of “number crunching” earlier because it is something software can do so easily. But automating any task can be hugely beneficial in terms of efficiency, accuracy, and even job satisfaction. 

A mechanical digger can shift as much earth in an hour as would take a human worker 40 days, and it would make a tidier job of it. Data preparation is surely the finance equivalent of shoveling earth, and offloading it onto an automated system is an innovation against which few would push back - it's just one example of workflow automation that can deliver major benefits. Companies from Coca Cola to Netflix have used AI for similar simple but profoundly effective automation tasks such as analyzing customer feedback or providing new product recommendations.

Key takeaways:

• Generative AI tools can relieve finance teams of routine tasks 
• AI doesn’t work in a vacuum, but aids decision-making by adding data-rich insights to human judgment and intuition
• AI tools can make finance work more interesting and satisfying for personnel

Interested to learn more? Download our eBook on AI in finance here.