The Finance Team in a Post-AI World
Posted by Sjoerd-Jaap Westra
The fourth industrial revolution is underway, and the development and use of artificial intelligence (AI) are going to play a big role in shaping future workplaces.
As with previous industrial revolutions, employees are concerned about job losses. AI has the potential to perform many essential tasks with improved accuracy and efficiency compared to a human worker. The World Economic Forum (WEF) is predicting that by 2020 we will already start to see new technologies contribute to significant job losses in some industries. It predicts that 4.7 million jobs will be lost in office and administrative roles, and 1.6 million jobs lost in manufacturing and production (Statistics are the total for the top 15 economies).
There are also likely to be new roles that do not yet exist. The WEF predicts that approximately 65 percent of children in elementary education today will work in jobs that don't yet exist. Many of these will be created by the new technologies such as AI.
How Will AI Affect Finance?
AI has already had a significant impact disrupting advisory roles, with robo-advisers offering a highly competitive alternative to human financial advisers. Despite this, the WEF predicts a net positive employment outlook for roles in Business and Financial Operations, predicting there will be a small increase of 492,000 jobs available across the top 15 economies.
However, in the long-term, it is more likely that there will be a decrease, with roles that are primarily process-driven being the biggest casualties. It is feasible that some finance jobs, such as Accounts Payable, could be almost entirely automated in the future, with humans reduced to a supervisory role and AI doing most of the work.
Increased Automation Is Inevitable
The large volume of data available to finance teams, plus the benefits to decision-making provided by insights into that data, make it certain that AI will become a mandatory tool for finance functions in every industry.
Many businesses are already enjoying the data, analytics and reporting benefits of an advanced financial system -- such as Unit4's Office of the CFO Suite -- and future advances in AI will only result in software that provides an even bigger advantage.
As technology improves, AI will become smarter and faster at providing analysis, and the competitive disadvantage that businesses not using it will experience will become more pronounced. Businesses don't want to replace their employees, but they do want to make better financial decisions, and AI will allow them to do that faster and cheaper than a whole team of humans.
There Will Be A Shift in Demand for Skills
As finance teams start to use AI more, we will see a shift in the demand for skills. Computers excel at complex analysis, but they lack the creative thinking and abstract thought processes necessary to take full advantage of the information they create.
This shift means we will see a decline in administrative and number-crunching roles but a greater demand for skills such as creativity, decision-making, problem-solving and critical thinking. This demand is reflected in the recent WEF report The Future of Jobs, which predicts these will be among the top 10 most valued skills in 2020. There will also be more roles for individuals with skills in coding artificial intelligence, and individuals who can bring an understanding of both AI and finance will be in high demand.
The logical long-term prediction is that the finance function as a whole will shrink with increased automation, but those who remain will be both higher-skilled and more diversely skilled.
AI Will Influence the Hiring Process Itself
The hiring process itself will not remain untouched. We are likely to see finance teams using AI to actively seek out and recruit skilled workers who will perfectly suit their job description and work culture. Using machine learning, artificial intelligence will be able to find employees who are a better match than a recruiter ever could. AI might be replacing some jobs, but it will also be responsible for placing people in jobs.
There are many other uses for artificial intelligence. For example, businesses could use AI to examine worker behavior, relationships and history to determine their likely loyalty, and calculate the risk of them leaving for another company.
CFOs Must Consider Their Strategy for Automation
AI is already replacing humans for many tasks, and this process is likely to accelerate. Such are the benefits of AI that businesses that don't make use of these technologies will fall behind. Those that do take advantage will experience better decision-making and easier regulatory compliance.
CFOs should already be working with IT to pinpoint the processes and roles that can be automated using AI and putting a plan in place for developing or acquiring the necessary technology.
Additionally, CFOs must not forget their responsibility toward their current employees. They must work with HR to put a plan in place for the change, reskilling and upskilling employees where appropriate to enable them to continue to provide value for the business.
As always, hiring and training strategy should be aligned with the business's strategic objectives. Depending on the existing team, their expertise and the business's future goals, this may mean making new hires in some areas.