CFO automation is a topic of growing interest for financial leaders as Artificial Intelligence technology gets more capable of handling manual tasks typically associated with finance professionals.
Many fear that automation will eliminate the need for human labor even beyond assembly lines and reach finance executives and other finance professionals.
While robotic process automation is capable, business and finance leaders would be foolish to remove the human element and fully trust AI automation.
Smart organizations understand that AI and digital transformation will play a key role in growth and success and be valuable tools to empower employees to work more effectively and efficiently.
This post will explore how automation can benefit finance chiefs and their teams.
Automation and Finance
AI and automation technology are uniquely positioned to aid finance processes. When it comes to the finance function of any business, there is a lot of repetition and rules-based tasks that must be strictly followed.
Automation tools can handle these rote processes and free up time for finance leaders and teams to focus on developing and implementing new strategies to make the business more efficient and profitable.
In fact, in many cases, finance automation doesn’t require AI technology to be effective and efficient. For example, automated accounting processes don’t require AI since they follow a predictable set of rules and a set schedule.
Companies might have a difficult time parsing the terms AI and automation. They might think they are synonymous, but they are not. While AI powers automation, some automated tools don’t use AI.
An easy way to differentiate between AI and automation is to visualize the task. If forward-thinking or prediction are occurring, AI is involved. An automated accounting process doesn’t necessarily require AI since the task is rote and predictable.
The Introduction of AI in the Finance Industry
Recently, there has been an influx of AI tools. The most notable and headline-grabbing tool is the content generator ChatGPT. While AI is starting to get a lot of media and public attention, companies have already been using AI solutions in finance.
For example, banks and other financial institutions utilize Machine Learning algorithms to detect fraud. Combined with automation, AI has the potential to radically change financial processes.
When AI’s predictive reasoning is combined with the automation already used to handle accounting and other financial tasks, organizations could potentially fully automate the financial side of their business.
While AI offers incredible advantages and benefits to organizations that adopt this technology, there still isn’t a robust AI solution that can replace a CFO or a human team of finance professionals.
However, the day is coming when AI technology can produce results that make business leaders consider replacing these positions entirely. There are definite benefits to this idea.
For one, improving productivity would be simple. AI never sleeps, rests, uses the bathroom, and doesn’t have sick days or distractions. In addition, AI can process more information more efficiently than humans.
Yet, with all of that being said, it would be foolish for organizations to replace their CFO or finance teams with AI. There is a common misconception that AI doesn’t make mistakes. This is not true.
AI technology is only as good as the training data it receives and the developers who build it. AI can make mistakes, and due to the critical nature of financial processes, completely turning these tasks over to AI automation without human checks is a mistake.
A financial leader should fully explore all of the ways that AI and automation can be used to help employees complete their tasks more accurately and efficiently. Still, humans should never be removed from the process.
As the chief financial officer, it is up to the organization’s CFO to identify and implement the technologies that can benefit the company and the finance team. There are several innovative tools that can drastically improve productivity, reduce errors, and automate rote tasks.
CFOs must understand the difference between AI and automation and how the two technology concepts intersect and work together. There are two common approaches that can be problematic for businesses.
One is an overreliance on automation and AI that leads to issues that could have been avoided if humans were involved in the process. The second is a rejection of automation and AI, leading to missed opportunities and workplace inefficiencies.
Like anything else in life, there is a balance that your organization must strike between automation and AI and human labor. The most effective approach is to empower employees with AI and automation tools.