Negative Effects of AI Implementation for Finance Teams

Finance teams are buzzing with excitement as they explore the potential of generative AI technology.

Many professionals in the field are optimistic that AI adoption will lead to a more efficient, streamlined, and faster Financial Planning & Analysis (FP&A) processes. By harnessing the power of AI, finance departments can expect improved decision-making, quicker data analysis, and enhanced forecasting capabilities.

But is it all good? Or are there negative effects of AI implementation for finance teams? In this article, we’ll dive into the specific concerns we currently see many finance professionals dealing with. Let’s get into it!

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Will AI Take Over Financial Analysts’ Jobs?

A recent report by ResearchAndMarkets.com predicts that the Global AI in Banking market is projected to reach an astounding $64.03 billion by 2030. This only underscores the substantial impact AI is expected to have on the financial sector, which has seen a surge after the launch of ChatGPT and the many more AI tools since.

Whether or not AI will play a big role in finance teams is not a question anymore, but the big question now is: will AI replace financial analysts? Well, the answer is not as dire as some may fear. While the introduction of AI will undoubtedly bring significant changes, it most likely won't lead to a complete displacement of financial analysts. 

Instead, it will bring about a transformation in their responsibilities, making their roles less manual and more strategic.

AI has the ability to automate FP&A processes that are currently done manually. And not just a few: tasks like data analysis, data entry or simple auditing can take tremendous amounts of time, but are not too difficult and impact-making. AI could now do these tasks for you.

While AI will undeniably bring sweeping changes to the field of financial analysis, it should not be seen as a threat to their expertise. AI will handle repetitive tasks, allowing financial analysts to apply their cognitive abilities and domain knowledge to navigate the increasingly intricate financial landscape. AI is certainly a tool that fits modern CFO’s tech stack.

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Will All Decisions Be Made by Robots in the Future?

The answer is a resounding no. While the rise of AI brings significant advancements, it does not signal the eradication of human decision-making. In fact, it is the "bigger" and strategic decisions that are likely to remain firmly in human hands.

The purpose of AI in finance is to augment human capabilities by providing valuable insights, data analysis and predictive modeling. The goal is to enable more efficient, accurate and informed decision-making, rather than replacing it overall.

Financial decisions often require a deep understanding of context, a consideration of various factors and a blend of analytical thinking and intuition. While AI excels in processing vast amounts of data and identifying patterns, it may struggle with the subtle intricacies and nuances that human decision-makers can grasp.

But that’s not all. Ethical considerations, long-term vision and the ability to evaluate potential risks and consequences are areas where human judgment and values play a crucial role. The human element in decision-making ensures that factors beyond pure data analysis are taken into account.

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Will We Lose Creativity and Originality?

AI is very good at doing repetitive, “simple” tasks. That might mean that we will lose all creativity and originality, as a lot of things will be done by the same artificial intelligence. But does it have to?

Fear not, instead of losing these qualities, we will find ourselves with more time and space to nurture them, setting us apart from our competitors. As AI takes on time-consuming, routine tasks with efficiency and precision, it frees up our valuable time and mindspace. Automation is a good thing, and today’s FP&A teams should have an automation-first mindset.

Imagine a world where you don’t have to do administrative chores and other boring tasks. Suddenly, there will be so much room in your head. So much room to think about the bigger ideas. Creative ways to save on costs, create better budgets or original ways to work around risks.

AI could even aid in this creative journey. By analyzing vast amounts of data, AI can identify trends, uncover patterns and provide valuable insights that fuel our imaginative endeavors. It becomes a trusted right-hand man, offering us a fresh perspective and inspiring us to push the boundaries of what is possible.

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Is Data Security a Problem With AI?

When it comes to data security, the stakes are always high, whether AI is involved or not. Safeguarding sensitive information is paramount in our digital landscape. In today's interconnected world, organizations must be proactive in safeguarding their data from potential threats. That is true with AI, and without.

At Pigment, we recognize the importance of data security and take this matter very seriously. Our mission is to provide you with peace of mind by implementing enterprise-level security measures to ensure the utmost protection of your critical data.

As one of our many security measures, Pigment undergoes regular audits to assess and mitigate risk factors. Our security practices cover a broad range of areas, including security, DNS health, information leaks, and more. In recognition of our security measures, Security Scorecard rates Pigment with the highest possible grade.

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Will AI Generate Rubbish Results?

When it comes to AI-generated results, the age-old saying is true: garbage in, garbage out. The quality of the results produced by AI is directly dependent on the so-called “prompt” it is fed. It is crucial for you and your team to recognize the importance of feeding accurate, reliable and relevant data into AI systems to obtain actually valuable insights.

At Pigment, we recently announced our new AI feature. Say hello to faster and smarter financial planning. Our AI capabilities enable anyone in your company to leverage a chat-like interface to obtain instant answers to critical questions, based on your own company’s financial data.

By automating tedious tasks and providing complete answers to queries, Pigment AI empowers your team to work faster. It streamlines processes, saving valuable time and allowing you to focus on more strategic initiatives and analysis. Pigment AI is designed to work smarter. It makes confident recommendations and generates impactful reports, helping you make data-driven decisions with precision. 

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Harnessing quality data for smarter financial insights

As we explore the potential impact of AI in the financial sector, it is clear that it will bring significant changes. But, it most likely won’t replace financial analysts. Instead, AI offers an opportunity to transform their responsibilities, freeing them from repetitive tasks and allowing them to focus on more strategic and value-added activities.

With the ability to automate the “simple” parts of FP&A, AI becomes a valuable tool for financial analysts, leaving them space to focus on the more high-level activities. Eventually, finance professionals can use the power of AI to drive better outcomes.

At Pigment, we understand the importance of embracing the future of financial management with AI. Streamline financial planning, enhance decision-making and save time.

Unlock new possibilities and achieve greater success! Learn more about Pigment AI here.

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