Generative AI is a game changing technology that promises to reshape the finance industry as we know it. It has the potential to significantly transform finance and accounting by automating processes, enhancing decision-making, and creating new efficiencies.
- Generative AI, a subset of artificial intelligence, has taken the world by storm. Generative AI powered by advanced models like Large Language Models (LLMs) has the ability to produce content such as text, audio, video, images and code in a matter of seconds.
- A 2024 Billtrust report that surveyed 375 CFOs across the U.S. revealed that generative AI has moved well beyond the exploratory phase, with 65% CFOs now integrating AI into their strategy.
- According to various reports, 20-40% of finance and accounting tasks could be automated within the next couple of years, leading to significant cost savings.
Artificial Intelligence (AI) has been around for years, with consumers and organizations using it alike in voice assistants, chatbots, automation and performing tasks based on predefined rules and patterns. But Generative AI, a subset of Artificial Intelligence, has brought in a new era with the ability to create new and original content by learning from large datasets. Unlike traditional AI, which might classify or predict outcomes based on existing data, generative AI can generate original outputs by learning from examples and then creating something new.
The finance and accounting sector is in a position to reap substantial benefits due to the advancement of Generative AI. It can automate a wide range of tasks in finance and accounting in the areas of Account payable and Receivable, Report Generation, Fraud detection and Compliance. Gen AI can analyse vast amounts of financial data, identify trends, and generate precise financial forecasts leading to better decision-making and reduced financial risk. AI Models can summarize lengthy financial documents, such as earning reports, market analysis and investment research papers, for quicker consumption. Generative AI can help in the area of Conversational Finance by significantly enhancing the performance and user experience of financial conversational AI systems and chatbots by providing more accurate, engaging, and nuanced interactions with users.
As organizations are starting to harness Generative AI technologies for automation, fraud detection and customer engagement, the global financial impact of Gen AI in finance and accounting sector is significant. According to recent reports, the overall AI market in finance is projected to reach a global revenue of approximately $26.2 billion by 2027, expanding at a CAGR exceeding 20% from recent years. Automation in accounting can save up to 20-40% by reducing the need for manual labour and minimizing human error.
While the future of Gen AI looks promising, it is important for the finance professionals to consider the limitations of Gen AI. The usage of large datasets with potentially sensitive information raises data privacy and security risks. Generative AI models can produce incorrect or “hallucinated” outputs, leading to misleading information. These models trained on biased data can perpetuate or even amplify those biases, leading to potentially discriminatory outcomes.
Overall, generative AI is anticipated to continue reshaping the finance and accounting industries, with a significant impact on global revenue and transformative cost efficiencies in daily operations. This trend shows the promise of generative AI to evolve from experimental to essential in high-stakes financial applications.
