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AI as the CFO's strategic ally

June 26, 2024

It is technology itself, or rather, its advances, that has allowed the CFO to make considerable role changes in recent years, focusing on a much more strategic position, which seeks to generate greater value in the most pertinent aspects of business decision making, and which is not (only) focused on "explaining" what has happened in the past.

In many cases, it has been the financial department that has taken the first step towards the automation and digitisation of its tasks and processes within the organisation, through the adoption of different types of technology. This has allowed it to "anticipate" everything related to the "world" of data management.

AI challenges for the CFO

We are facing a new great challenge called Artificial Intelligence.  In any of its variants, mainly due to the direct impact it has, both in relation to the tasks of the financial team and the rest of the company, it enables  the conversion of data into strategic information for the business.

The idea is that CFOs can "extend" duties, from a mainly descriptive work model (analysis of the past) to a predictive one (with a focus on the future), thus reinforcing their key role in decision making.

To this end, technology in general and the use of Artificial Intelligence in particular, will allow organisations to perform a more efficient analysis of data, identifying patterns that facilitate the prediction of the company's "future", allowing them to optimise operations, as well as revenues and costs.

CFO skills in the digital era

We are only in the very early stages of change and, while no one can say what the definitive transformations will be, what is clear is that the transition is still a journey with new challenges for the CFO. Technology alone, however disruptive it may be, is never the complete solution.

This is why it is necessary to have a team with the appropriate training and knowledge "transformation" (upskilling/reskilling) capabilities, as it will be fundamental to incorporate new roles and capabilities that did not exist until now, skills that go beyond the limits of the financial department, that impact the entire organisation.

The integration of advanced technology solutions such as Embat, a comprehensive cloud-based treasury management platform, is at the forefront of this transformation; playing a crucial role for finance teams. Through the implementation of Google Cloud's Generative AI in Embat’s  automated accounting and bank reconciliation functionality, we were able to automate more than 90% of accounting entries, which translates into savings of up to 10 hours per week for finance teams and a significant reduction in accounting errors. This advancement turns accounting and bank reconciliation into strategic processes for the growth of medium and large companies.

For the CFO, this means acquiring new skills in the analysis of large volumes of data in real time (not only financial), allowing for the  identification of  trends, opportunities, as well as risks inherent to the business, which otherwise could not be noticed in advance.

This process will improve the company's own decision making, where its input will tend to become increasingly relevant. In other words, the CFO's "journey" will start with past analysis and move towards more accurate predictive and prescriptive scenarios.

Change opportunities for the CFO

In this way, the possibility of "anticipating the future", considering the company's own historical evolution as a basis, will facilitate the identification of business scenarios, adding feedback to the process over time, which will allow the CFO to move from offering a fixed image of the past to offering a dynamic and continuously moving image of what is to come.

Of course, it must never be forgotten that the adoption of Artificial Intelligence itself must be assumed as such;  something that is still a social process, where it must be considered that the speed of change on the part of people is much slower than that of the technology itself.

Ultimately, Artificial Intelligence itself opens up a new and important opportunity for change for the CFO, which will allow him to move towards the development of a more predictive role, where his view of what is to come will reinforce his strategic role in business decision-making.

Will AI significantly change the role of the CFO?

Tomas
Gil
CTO @ Embat
Tomás, with a background in telecommunications engineering, began his career in bank connectivity when he took on the role of CTO at Fintonic Latam, before joining Embat.

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