AI’s Seismic Impact On Finance: More Human-Augmenting Than You May Think

Michael Diehl

The continuous integration of data, processes, and algorithms is profoundly reshaping finance organizations. However, confusion on how far-reaching the possibilities can be remains prevalent among CFOs and finance leaders.

For this reason, SAP and the University of Applied Sciences Berlin (HTW Berlin) joined forces to research how artificial intelligence (AI) is changing finance organizations all over the world. I want to thank the 164 professionals, which included finance specialists, CFOs, and other top executives, who participated in our study. With their insight, we uncovered how the true potential of AI is going beyond teaching machines to think, converting image and speech into captured information, and automating rules-based tasks and process.

Prof. Dr. Kai Reinhardt, lecturer and researcher at HTW Berlin and lead author of the study “The Impact of Artificial Intelligence on Competencies in Corporate Finance,” observes, “The impact of AI in talent in finance organizations will be kind of disruptive and go far beyond automating rules-based tasks and processes. While AI technologies will inevitably completely replace associated skills in some standardized jobs within a few years, many finance roles and responsibilities will become much more ‘intelligent’ in that they will be data-driven. This leads to entirely new roles and knowledge structures in corporate finance.”

AI-blog

Source: The Impact of Artificial Intelligence on Competencies in Corporate Finance,” University of Applied Sciences Berlin (HTW Berlin), 2018.

Rethinking the myth of the robot takeover

As they adopt more intelligent use cases for advanced analytics tools and access more accurate and real-time data, CFOs will begin to reevaluate their overall organization, structure, and work experiences. In fact, new roles will gradually increase the capabilities of the intelligent finance function – including data scientist, treasury consultant, systems compliance manager, AI business partner and scenario planner, and scorekeeper.

Respondents indicated that AI strengthens analytics capabilities, which 18% cite as indispensable when interpreting data that cannot be systematically assessed. This skill can then guide problem-solving in ways that initiate actions critical to business success, according to 12%. And perhaps more transformational, 12% foresee that AI will elevate finance’s capacity for constructive, critical thinking to rationally examine potential operational deficits, risks, and opportunities and initiate adjustments when needed.

How deeply will AI change finance roles? Here’s a snapshot of what we can expect:

  • The CFO will drive AI technology adoption across every line of business: CFOs will be a transformational catalyst bringing radical change across the entire organization.
  • Accounting roles will be replaced by new advisory and quality assurance roles: Data scientists will advise decision-makers, and scorekeepers will use metrics to monitor AI-enabled processes.
  • Governance, risk, and compliance managers will uncover the unexpected: Big Data analysis and AI automation will help identify changes in risk, simplify compliance, and detect fraud early.
  • Financial controllers will provide more decision support for managers and investors: They will use knowledge and data in new contexts and resolve people-versus-technology conflicts with new tools.

Positioning your metamorphosis to augment human intelligence

The results of this study make it clear that AI will become a transformational force for the finance organization. Over time, the innovations, instruments, and tools delivered through the technology will not only strengthen finance’s reputation for due diligence and evenhanded decision-making. They will also allow employees to acquire and master skills that make work more meaningful and valuable to the business and its customers.

“The future of AI is not black and white; rather it is a differentiated image of many different shades of gray and nuances,” remarks Reinhardt. “Instead of destroying competencies, [AI] will, therefore, result in new competency areas needing to be set up in financial management. The question now arises as to which specific competencies these will be.”

Explore how AI technologies will influence – and augment – the jobs, roles, and competencies of finance leadership and specialist roles. Read the University of Applied Sciences Berlin (HTW Berlin) study, “The Impact of Artificial Intelligence on Competencies in Corporate Finance.”

Phase 2 of the HTW research will look into concrete steps finance organizations can take to get ready for intelligent technologies. I invite all finance professionals to participate in the associated survey.

Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | FacebookYouTube


Michael Diehl

About Michael Diehl

Michael Diehl is a senior director of Global Finance Audience Marketing at SAP, where he lead messaging and customer insights. With 16+ years of experience at SAP, he has a strong track record in technology innovations. His specialties include finance, machine learning, thought leadership, go-to-market strategy, digital marketing, messaging, and positioning.