Generative AI in finance : 2023 lookback, 2024 outlook

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A year of significant developments in finance modernization

2023 was a game-changing year for business, with inflationary pressure, a better than expected economy and market performance, and an explosion of interest in generative artificial intelligence (AI) for the enterprise. For many chief financial officers (CFOs), it was an intriguing year in how AI could have an impact on and transform the future of their finance organizations. In 2024, CFOs are beyond the education stage. This is the year to experiment, prove value, and begin adoption of AI and generative AI in finance.

Progress made in 2023 and looking ahead to 2024

The finance organization’s engagement with generative AI in 2023 involved a journey of understanding the technology, identifying potential applications, and launching pilot programs. Many organizations discovered a “solution void”—a gap between the technology’s capabilities and “ready-to-use” applications for finance. While the potential of generative AI in finance is recognized, practical solutions remain in development.

We predict the void will begin to close in 2024, as more complete applications of generative AI emerge for finance organizations. Software companies will likely play a critical role in providing AI-integrated tools that offer more direct applications in financial operations. The scaled rollout of generative-AI-enabled applications that support workplace productivity, such as Microsoft Copilot, Google Duet AI, and Amazon QuickSight, will help finance professionals become more familiar with generative AI, incorporating this technology into their daily work. That’ll help inspire more ideas for applications in finance and turn the innovation wheel to further close the solution void.

CFOs’ focus for 2024

CFOs in 2024 should prioritize strategically integrating generative AI, with an awareness of the solution void:

1. Productivity gains: Encourage your teams to use corporate-approved generative AI tools for daily note-taking, brainstorming, writing, and summarization. The more familiar your teams are with what generative AI can do, the better equipped they will be to adopt this technology in finance broadly.
2. Think big: Given public familiarity with tools such as ChatGPT and Bard, there may be a tendency to think of generative AI as synonymous with those applications or to use terms such as “chatbot” or “automated writer.” The potential of generative AI is much bigger, with the potential to transform end-to-end processes in finance. When gathering ideas or use cases for generative AI from your teams, challenge them to set transformational goals versus
3. One tool in the kit: Utilize generative AI as part of a diverse toolkit, ensuring it complements other financial tools, such as machine learning, predictive forecasting tools, modern enterprise resource planning systems, etc.
4. Emphasize change management: Foster understanding and trust in AI within organizations, recognizing the technology and solutions that use it are evolving.

Clarifying misconceptions about generative AI

Addressing misconceptions is crucial as finance professionals explore generative AI:

1. Understanding complexity: Acknowledge that while generative AI is promising, implementing at scale in finance is more complicated and potentially costly than many CFOs may think.
2. Beyond a stand-alone solution: Recognize that AI is a vital part of a larger solution set and not a cure-all.
3. Capabilities beyond narratives: Generative AI’s utility extends beyond narrative generation to include advanced data analysis and coding.

Immediate steps to take

To effectively utilize generative AI, organizations should:

1. Collaborate early and effectively: Engage with technology teams to understand AI policy, capability, and internal priorities.
2. Allocate resources for pilots: Dedicate budget to explore AI through practical use cases, particularly focusing on areas that are between system boundaries.
3. Adopt a broad perspective: Consider generative AI within the context of the entire organization, using it as a tool to address specific gaps in the finance process automation landscape.

2024 is going to be an exciting year for business, with generative AI at the center of new ways to serve the customer and shareholder and improve operations and profitability. CFOs are poised to be at the center of the journey, both for growth of business and the evolution of their finance functions.

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