How AI Co-Pilots Can Future-Proof the CFO Office

Today’s challenging macro environment requires organizations, and their CFOs, to be both nimble and intelligent.

That’s because unpredictable market conditions have made it essential for finance leaders to be prepared for every eventuality, as well as underscored the importance of taking proactive measures to mitigate the impact of any unforeseen events on their firm’s balance sheet and operational bottom line.

This, as generative artificial intelligence (AI) continues to reach new heights of commercialization with promises of process efficiencies and workflow optimization.

Many observers are wondering whether AI tools might be the perfect fit for a CFO office tasked with safeguarding the financial health of the organization while simultaneously optimizing efficiency and return on investment.

Meanwhile others remain convinced that the inherent risks of the technology — including the tendency to “hallucinate” and spread other misinformation, the vulnerability of proprietary data, among other concerns — require a “wait and see” approach rather than a rush to integrate.

So which approach is correct? In a way, both are.

Today’s digital-first CFO already allows finance teams to do more with less, while the necessity of compliance within treasury and accounting operations means that AI governance models need to be properly established. But AI tools do, and will, have a place within the finance team — and there are already opportunities where their applications can help CFOs be more effective.

Read more: OpenAI Takes Aim at ‘Hallucinations’ as More Businesses Integrate AI

A Balanced Point of View

That’s because AI technology has the potential to automate formerly laborious, repetitive and non-strategic tasks such as finance analysis, measuring and predicting performance, and creating key performance indicators.

Still, OpenAI said in March that the accuracy of ChatGPT-4 in business applications is less than 80%, while Google tags its AI solution, Bard, with a disclaimer that explains the tech is “experimental,” and some of its responses “may be inaccurate.”

“We’ve got to be careful how we use this technology in a compliant manner,” i2c CEO and Chairman Amir Wain said to PYMNTS recently, cautioning against rushing full speed and embracing the technology. “We cannot be at the bleeding edge of technology dealing with money and funds. … We need to put a compliant framework around the tool.”

While AI’s full applications may be years away, the technology still represents a compelling evolution in how employees interact with company data and can accelerate their ability to access information by removing bottlenecks and frictions.

CFOs are uniquely positioned to capitalize on AI’s commercialization. Finance leaders have insight into all business units and can leverage their holistic point of view to become powerful strategic advisers, particularly in an operating environment where profitability is increasingly being prioritized over growth.

The biggest role of automation in company finances is helping to make data more visible to the people who need to see it, Nathaniel Katz, CFO at eCommerce software provider Rokt, said to PYMNTS this month, explaining that where the technology has its greatest potential is in making otherwise opaque data points visible to decision-makers.

Any AI strategy should be aligned with existing business strategies, positioned to augment a range of company operations, and aimed at accelerating performance through process efficiencies.

“No matter the ways and means in which AI is being harnessed, it’s incumbent on firms to mull how they can enhance value rather than just chase a trend,” Shaunt Sarkissian, founder and CEO of AI-ID, told PYMNTS.

The goal is to strike an ideal balance, which may require upskilling traditionally risk-averse financial leaders and showing team members the opportunity AI presents to take legacy work out of repeatable processes.

See also: Generative AI Is Evolving Embedded Finance by Accelerating Easy Wins

Augmenting the Finance Department

Balance sheet fundamentals reign in today’s economic environment, while visibility over internal growth levers is becoming more important for finance leaders as their role evolves from purely accounting and closing the books to strategic partner taking a holistic view alongside the rest of management.

“One of the principal roles of the CFO is to protect the balance sheet — it’s your lifeblood,” Pat Dillon, CFO at intelligent supply chain platform Flock Freight, told PYMNTS.

And one of the best ways for CFOs to protect the balance sheet is by ensuring and prioritizing the ability to react quickly and navigate effectively toward the best possible outcome in times of crisis.

Generative AI tools can help finance teams make real-time decisions and allow for cross-departmental agility between decision-makers by surfacing relevant yet disparate financial information.

“[AI is] changing the way that people look at the operational relationship between systems and people,” said James Ritter, CFO at ABBYY, to PYMNTS in a separate conversation.

March’s mini banking crisis, the aftereffects of which are still being felt, has reemphasized the importance of consistently maintaining operational transparency and visibility over processes and performance indicators — all areas where AI can help support, not necessarily replace, existing functions.