The finance function has traditionally been viewed as a bastion of conservatism, slow to embrace new technologies. However, the rapid advancements in artificial intelligence (AI) have begun to challenge this perception. A recent Gartner survey revealed that 58% of finance functions are now leveraging AI, marking a significant increase from the previous year. This surge in adoption underscores the transformative potential of AI in revolutionizing the way finance teams operate.
Despite this increase in adoption, there are still barriers to AI adoption in finance due to data accuracy challenges and talent shortages. In this blog post, we’ll explore the main use cases finance leaders are leveraging AI for and tools that can help to overcome barriers to adoption. But first, it’s important to understand how AI can impact finance functions.
The Benefits of AI Adoption in Finance
The allure of AI for finance functions is undeniable. By automating routine tasks, enhancing data analysis capabilities, and improving decision-making, AI can deliver substantial benefits. Here are some key advantages:
- Increased Efficiency: AI can streamline processes such as accounts payable, accounts receivable, and financial reporting, freeing up valuable time for more strategic activities. For instance, AI-powered robotic process automation (RPA) can handle repetitive, rule-based tasks like data entry and invoice processing, reducing manual effort and errors.
- Enhanced Accuracy: AI-powered systems can identify and correct errors in financial data, reducing the risk of costly mistakes. Advanced algorithms can detect anomalies, inconsistencies, and fraudulent activities, ensuring the integrity of financial information.
- Improved Decision-Making: By analyzing vast amounts of data and identifying trends, AI can provide insights that can inform better business decisions. For example, AI-driven predictive analytics can forecast future revenue, expenses, and market conditions, enabling finance teams to make proactive decisions and mitigate risks.
- Risk Mitigation: AI can help detect and prevent fraud, ensuring the financial health of the organization. AI-powered fraud detection systems can analyze transaction data for patterns and anomalies that may indicate fraudulent activity, helping to protect the organization’s assets.
Finance leaders are actively implementing AI solutions to achieve these outcomes. The Gartner survey identified four main use cases for AI across finance functions.
The Current Use Cases of AI in Finance
1. Intelligent process automation (used by 44% of finance functions) — Automation that leverages the AI capabilities of existing automation tools (such as RPA) to enhance information processing.
- Enhanced Efficiency: IPA leverages AI to automate repetitive, rule-based tasks, such as data entry, invoice processing, and account reconciliation. This frees up valuable time for finance professionals to focus on more strategic and complex activities.
- Reduced Errors: AI-powered automation can minimize human errors, ensuring greater accuracy and reducing the risk of financial losses.
- Scalability: IPA can easily handle increased workloads, enabling finance functions to scale operations efficiently and meet growing demands.
- Improved Compliance: By automating compliance-related tasks, IPA can help organizations adhere to regulatory requirements and mitigate risks.
2. Anomaly and error detection (used by 39% of finance functions) — AI-enabled identification and reporting of errors and outliers in large datasets (e.g., internal claims, expenses, and invoices).
- Fraud Prevention: AI algorithms can analyze vast datasets to identify unusual patterns or anomalies that may indicate fraudulent activity, such as suspicious transactions or unauthorized access.
- Risk Mitigation: By detecting errors and inconsistencies in financial data, AI can help organizations prevent financial losses and mitigate risks.
- Enhanced Data Quality: Anomaly detection can help improve the overall quality of financial data, ensuring that it is reliable and accurate.
- Proactive Risk Management: By identifying potential risks early on, AI can enable organizations to take proactive measures to mitigate them.
3. Analytics (used by 28% of finance functions) — The creation of better financial forecasts and results analysis that can lead to improved decision making.
- Improved Forecasting: AI-powered analytics can create more accurate financial forecasts, enabling organizations to make informed decisions about resource allocation, budgeting, and strategic planning.
- Enhanced Insights: By analyzing large datasets, AI can uncover hidden trends and patterns that may not be apparent to human analysts.
- Optimized Decision-Making: AI-driven insights can help finance teams make more data-driven decisions, leading to improved outcomes and increased efficiency.
- Risk Assessment: Analytics can be used to assess financial risks and identify potential vulnerabilities, enabling organizations to take proactive measures to mitigate them.
4. Operational assistance and augmentation (used by 27% of finance functions) — Emulation of human-judgment-based decisions in operations through AI (often generative AI).
- Decision Support: AI can provide recommendations and suggestions to support human decision-making, helping finance professionals make more informed choices.
- Natural Language Processing: AI-powered natural language processing (NLP) can enable finance teams to interact with financial systems and data using natural language, making tasks more efficient and intuitive.
- Generative AI: Generative AI can be used to create financial reports, summarize complex data, and even generate creative solutions to financial challenges.
- Enhanced Productivity: By automating routine tasks and providing valuable insights, AI can significantly enhance the productivity of finance teams.
These four use cases represent just a glimpse of the potential of AI in finance. As AI technology continues to evolve, we can expect to see even more innovative applications emerging in the coming years.
Recommended: Check out our recent episode of Fintech Corner as Joseph Drambarean, Brett Turner, and Jeff Macke discuss everything you’ve wanted to ask about AI; What’s so special with this new wave of AI and are finance teams being impacted? How do finance teams change the way they approach their jobs with AI in the picture? How to tell if it’s just a shiny new object or a real, here-to-stay evolution?
Overcoming the Challenges of AI Adoption
While AI offers immense potential, its successful implementation in finance requires addressing key challenges. Two primary obstacles identified by Gartner are inadequate data quality and a shortage of AI talent.
- Data Quality: AI relies on high-quality data to deliver accurate results. Ensuring data accuracy and consistency can be a significant undertaking for many finance functions. Challenges can arise from data silos, inconsistent formats, and missing or inaccurate data. To address these issues, finance teams must invest in data governance, data quality initiatives, and technology that improves data quality.
- Talent Shortage: Organizations need skilled professionals to develop, implement, and maintain AI solutions. Finding and retaining AI talent can be competitive. As AI continues to gain traction, the demand for AI experts is expected to grow. To overcome this challenge, you can work with partners that provide solutions with an intuitive user experience. This makes AI technology more accessible to your team and provides expert support when needed.
Enhance Data Quality With Trovata
To overcome these challenges and lay the foundation for AI success, finance teams should leverage a modern treasury solution that connects directly with your banks and automatically normalizes data across a variety of connection types – APIs, SWIFT, H2H, etc. Trovata does exactly that.
Trovata ensures accurate and up-to-date data through our modern, cloud-native, AI powered, API first technology. By eliminating manual data entry and reducing the risk of human error, Trovata significantly improves data quality.
Our platform removes the need to manually login to various bank portals and consolidate data. You’ll establish a single source of truth for all of your bank data. Trovata also provides user-friendly data management tools that empower finance teams to organize and categorize data.
These tools lay the foundation for finance teams to effectively leverage AI to extract valuable insights from their data, identify trends, and make data-driven decisions.
Intuitive AI-Powered Solutions
Overcome the talent digital skills gap and shortage with use-friendly technology. Trovata’s intuitive data analysis features enable you to get immediate answers to your cash data questions.
Cash Reporting: Analyze beautiful visualizations or raw data to answer any cash question, in any context. Tell the story of your cash with automated real-time reporting, enabled by lightning-fast connections to your banks’ APIs.
Cash Flow Analysis: View all your cash inflows and outflows in one place, across multiple banks. Better manage and visualize cash data so you can make fast, informed decisions in a single source of truth.
Cash Forecasting: Trovata makes forecasting simple. Our platform collects and normalizes data, then generates a forecast, all in one platform.
Cash Positioning: A powerful daily cashflow intelligence tool, Trovata’s cash positioning experience ensures your liquidity is put to good use. Leveraging real data, obtain a consolidated view of your live cash position and identify excess cash opportunities across all of your accounts.
Trovata AI: Grasp the power of generative AI to unlock cash insights. All you have to do is ask.
Trovata enables treasurers to save time, dramatically improve data quality, and focus on what truly matters: driving growth, optimizing cash flow, and making data-driven decisions.
Through powerful, user-friendly tools, treasurers can effectively leverage AI to streamline processes and gain strategic insights. Trovata turns the treasury team into a vital strategic partner for the business.
Ready to leverage the power of AI and take your treasury capabilities to the next level? Schedule a demo with Trovata today and see how you can get the most out of AI and unlock new strategic opportunities for your organization.
