Accounting software is nothing new. Payroll, in particular, has been automated for some time now, taking complicated and repetitive tasks out of the hands of finance teams and allowing them to focus on other aspects of their roles. Artificial Intelligence is now providing the next step forward.
If you’ve read any of our previous blogs in this series, you’ll know that one of the main benefits of automation is increased efficiency. The same applies to finance departments, saving time on data entry and processing, reducing costs and improving decision-making processes. AI can streamline financial processes, ranging from customer onboarding, evaluating eligibility for loans and credit to carrying out compliance checks.
It can also improve cyber-security protection, with the ability to monitor and analyse network traffic 24 hours a day, seven days a week.
Accuracy is a primary concern when dealing with financial transactions, and this is where AI can arguably have the biggest impact for finance teams in terms of eliminating manual errors in data processing and analytics.
AI can process more information more quickly than a human, often finding patterns and identifying relationships in data that a human may miss. This can help with fraud prevention and detection as it will identify anomalies as much as it will consistencies.
The ability to analyse vast amounts of data quickly can also enable companies to get ahead of their competition by developing new products and services at pace.
Personalisation can improve the customer experience with automated tailored customer responses, make better, more relevant and safer product and service recommendations, and earn trust and loyalty through deeper engagement with the customer.
So, automation can significantly enhance efficiency in finance departments. There are, however, inherent challenges and limitations that prevent complete reliance on automation.
Finance often involves strategic financial planning and investment decisions, which may require human judgment and understanding of broader business contexts. Sensitivity and emotional intelligence may also be needed in certain situations, such as when dealing with a customer with financial difficulties.
Given that we’re talking about finance, it’s worth mentioning that the initial costs associated with implementing automation solutions and potential challenges in adapting existing systems can be obstacles for some organisations. This is true for all departments in all businesses, of course, but finance teams are likely to be particularly focused on the financial investment required for new technology, and may see this as a barrier.
There will, of course, always be unforeseen circumstances and exceptions that require adaptability and critical thinking – areas where automated systems may struggle but humans have the capability to solve the problems.
It’s clear that AI can play a pivotal role in finance, automating tasks, managing risks, enhancing customer interactions, and optimising processes, thereby contributing to the overall effectiveness of finance departments. But it can’t think critically, and some aspects of finance, especially those requiring creativity and unique problem-solving, may remain beyond the scope of automation. Limitations lie in handling complex decision-making, unforeseen scenarios, and the need for human qualities like emotional intelligence and the expertise of human minds trained in the field.
A balanced approach that combines automation with human expertise is likely to be the most effective strategy to optimise the outputs of finance teams.
