Hey, have you heard about these things called AI chatbots? Apparently, it’s all the rage nowadays.
The race for chatbot supremacy is intensifying ever since the emergence of Open AI’s ChatGPT, with large tech companies like Google, Meta, and Microsoft also investing heavily in the development of their own advanced chatbot systems. In addition, many other companies like Morgan Stanley, PwC, Duolingo, and Stripe have realized the potential benefits of integrating AI chatbots into their businesses and products.
And chatbots are coming into the finance function, too. Just this week, Datarails, the financial platform for Excel users, launched FP&A Genius, “the ChatGPT” for the CFO’s Office, that will give companies unprecedented instant insights about budgets, forecasts, variance, and spend.
The generative AI solution provides answers based on complete and consolidated financial data from across the company, allowing executives to quickly answer questions such as ‘How did revenue compare 2022 vs 2021?’, ‘What will happen to the bottom line if inflation is 2x the rate today?’ and ‘How will results be impacted if revenue grows by 10% next year?’
This technology has the potential to transform businesses and finance. According to Bain Capital Ventures partner Christina Melas-Kyriazi, AI is poised to bring about a revolution in various roles across the financial services sector. “I expect to see more companies leveraging AI and machine learning to help forecast better and more accurately.”
Glenn Hopper, who is the author of Deep Finance: Corporate Finance in the Information Age and also serves as the director at Eventus Advisory Group, suggests some of the potential benefits of AI chatbots for the finance department.
Benefit #1: Streamline Financial Analysis
The use of AI chatbots in finance is expected to accelerate financial analysis and decision-making processes. Hopper compared the ability to interact with an AI chatbot to “the way that you would a junior analyst.” Although ERP dashboards can provide an overview of a company's financials, delving into the details typically requires the involvement of financial analysts, which can be time-consuming. However, a fully integrated chatbot that has access to a company's data can answer financial questions and provide analysis without the need for a formal request. “You can ask questions, just like you would have an analyst, and get this information in pretty near real-time,” he said.
Benefit #2: Empower SMEs
The use of AI in finance can level the playing field by providing small and medium-sized enterprises access to data and resources that were previously only available to larger companies. With extensive data and teams dedicated to working with it, large companies have the potential to achieve incredible results with FP&A. They are able to analyze the data and gain valuable insights to enhance forecasting accuracy, explain budget variances, and overall make informed decisions.
When guest starring on the FP&A Today podcast, Hopper shared that he believes we are on the verge of a revolution and compared it to when Quickbooks first came out and revolutionized accounting for small businesses. “I think if someone is going to come along and have a product that is basically the QuickBooks of machine learning that brings this capability to small businesses that otherwise couldn’t have it…I really think this is going to be the next wave,” he said.
Benefit #3: Transform Compliance & Reporting
The implementation of AI technology in accounting and finance could significantly improve compliance and reporting processes. Klarity, a document review automation company, claims in a white paper that AI could speed up manual compliance and reporting tasks such as disclosure review, data matching, and drafting accounting memos up to 10 times faster.
Just earlier this month, PwC announced its partnership with AI startup Harvey to offer legal professionals AI tools to streamline a range of tasks, including contract analysis, regulatory compliance, claims management, due diligence, and legal consulting services.
It’s not hard to see how that could be useful for finance departments, said Hopper. “If you have faith in new lease rules, if you have that loaded into a chatbot and you can ask it, ‘How do I need to record these [leases]?” he said. “There’s a template and…it just vastly streamlines the amount of effort it takes to do that.”
Revolutionizing Finance
While the finance industry has been discussing the potential of AI for quite some time, its implementation has been limited. However, this is about to change rapidly, as businesses gain access to AI-powered tools and insights. This shift will enable finance teams to uncover the true financial narrative of their businesses and make strategic decisions quickly. By harnessing the power of AI, these teams can stay ahead of industry trends and challenges, positioning themselves for success in the years to come.