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Generative AI, an Ally or an enemy for CFOs and Finance teams?
Updated: May 21
There have been a lot of talks lately about Generative AI. Specifically, will Generative AI steal jobs or make us (humans) more productive?
Generative AI can indeed replace some jobs, and we already see it in some cases, but that is the nature of innovation. Although this may sound alarming, I believe Generative AI is here to make businesses' day-to-day tasks more productive and less tedious.
Before we dive deep into the abyss, we first need to understand the difference between AI and generative AI.
Artificial Intelligence (AI) is a broad field that encompasses a range of techniques and applications that enable machines to perform tasks that normally require human intelligence, such as perception, reasoning, and decision-making. AI techniques can be broadly classified into supervised learning and unsupervised learning.
On the other hand, generative AI is a subset of AI that specifically focuses on using machine learning techniques to generate new and unique content. Generative AI algorithms are trained on a large dataset of examples and can create new content similar to the input data.
To give it a bit more depth, here are a few real-life examples to illustrate the points above:
AI applications
Chatbots: are computer programs that use natural language processing (NLP) to communicate with users conversationally. They can be used to provide customer support, answer questions, or even simulate human conversation.
Image and speech recognition: These AI technologies enable computers to recognize and interpret images and speech. Image recognition can be used for facial recognition, object detection, and image classification. Speech recognition can be used for speech-to-text conversion, voice commands, and language translation.
Generative AI applications
StyleGAN: This generative AI algorithm can create high-quality, realistic images. It can generate images of faces, animals, and even entire landscapes.
GPT-4: This is a language model capable of generating human-like text. It has been used to create chatbots, write news articles, and even generate computer code.
MuseNet: This generative AI model can create original music compositions. It has been trained on a large dataset of classical music and is capable of creating new pieces that sound like they were composed by a human.
Okay, with this out of the way, we remain with the question everyone is asking: will Generative AI steal people's jobs?
The fear of job loss due to automation is a valid concern. Over the past two decades, we have seen it with many business categories (e.g., Marketing automation, CRMs, Digital magazines, etc.). In the case of generative AI and finance teams, it is likely to replace human workers partially. While generative AI can automate repetitive tasks, more is needed to replace humans' strategic thinking and decision-making abilities.
In the case of CFOs and finance teams, Generative AI is more likely to augment the work of finance teams and CFOs, rather than replace it. By automating repetitive tasks, generative AI can free up time for finance teams to focus on more strategic tasks such as analysis, decision-making, and relationship management, the type of help that can ultimately lead to better financial performance and improved decision-making.
2023, can we revolutionize Finance Operations with Generative AI?
The short answer is yes, but let's not jump ahead of ourselves here.
In recent years, the finance industry has witnessed a surge in using artificial intelligence (AI) to streamline processes and improve decision-making. One of the most promising applications of AI in finance is generative AI.
As mentioned above, Generative AI uses deep learning algorithms to create new data, images, and texts that mimic existing data patterns. This technology can help finance teams and CFOs perform their jobs better by providing accurate and timely insights, automating repetitive tasks, and enhancing risk management.
To give you more depth, here are a few examples we can think of that generative AI solves:
Automating Repetitive Tasks
One of the most significant benefits of generative AI is its ability to automate repetitive tasks. Finance teams often spend considerable time performing repetitive tasks such as data entry, reconciliation, and report generation. These tedious tasks are prone to errors, resulting in inaccurate financial reports. Generative AI can automate these repetitive tasks by learning from historical data and creating accurate reports in real time.
For instance, it can automate invoice processing, reducing the time and resources required to process invoices manually. It can automate financial statement preparation, reducing the risk of errors and improving the accuracy of financial reporting. These examples only add to productivity and do not steal any jobs.
Enhancing Risk Management Risk
Another great example is enhancing risk management. Risk Management is an essential part of the finance team. CFOs and finance teams identify and manage risks to ensure the organization's financial health. In the case of Generative AI, it can enhance risk management by analyzing large amounts of data and identifying patterns that humans do not easily detect.
To further sharpen this point, it can analyze credit risk by evaluating customer data, credit history, and other factors to predict the likelihood of default. It can also analyze market risk by identifying trends and patterns in financial markets, allowing finance teams to make informed decisions about investments.
Providing Accurate and Timely Insights
This is my favorite one and a feature I enjoy playing with when I use Bursement.
It can provide accurate and timely insights. Finance teams and CFOs need to make critical decisions based on accurate data, and generative AI can provide them with insights that humans can discern more easily.
For instance, generative AI can analyze financial statements and identify areas where cost-cutting measures can be implemented. It can also be used to analyze market trends and identify investment opportunities.
Or take this example, by analyzing historical data and identifying trends, generative AI can create accurate forecasts to help finance teams and CFOs make informed decisions about the organization's future.
I hope this blog post sheds some light on how Generative AI can empower teams instead of replacing them.
Regarding Finance teams, Generative AI is a powerful technology that can revolutionize the finance industry. By automating repetitive tasks, enhancing risk management, and providing accurate and timely insights, generative AI can help finance teams and CFOs perform their jobs much better. While there are some challenges to overcome, such as data privacy and security concerns, the benefits of generative AI are too significant to ignore. As the finance industry evolves, generative AI will likely become an essential tool for finance teams and CFOs looking to stay ahead of the curve.