Is Generative AI Revolutionizing Finance? Here's What Finance Leaders Are Saying

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📈 The Future of Finance

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The Future of Finance: How Generative A.I. is Revolutionizing Forecasting

Generative A.I. has garnered significant attention in the finance community in recent months. Several notable events have occurred, such as a prominent bank banning ChatGPT, a CFO employing ChatGPT to create an FP&A tool, and an MIT researcher utilizing ChatGPT and DALL-E 2 to exhibit FP&A scenario generation. As generative A.I. gains recognition and becomes a more prevalent concept, are finance leaders more inclined to accept and incorporate the technology?

It is apparent that finance leaders are encouraging their personnel to familiarize themselves with ChatGPT and its potential applications, according to Tom Hood, EVP of Business Engagement and Growth for the Association of International Certified Professional Accountants (AICPA). Hood holds regular meetings with AICPA's Future of Finance Leadership Advisory Group, which consists of over 50 high-ranking finance leaders at major US corporations.

As Hood explains, finance leaders are advising their teams to experiment with ChatGPT but are refraining from deploying it within their companies due to security concerns. "Don't use our actual data," he says, but test it out. Finance leaders have recognized that ChatGPT, which has the ability to comprehend natural human language, is advancing rapidly and receiving considerable hype, necessitating their attention even if they initially did not want to pursue the technology. "Their boards are inquiring about it, as well as the CEO," Hood remarks. Furthermore, Hood notes that with Microsoft's investment in ChatGPT, the technology will eventually be incorporated into its applications, including Excel, which some finance teams still utilize.

From the perspective of CFOs, Debbie Clifford of Autodesk emphasizes the swift attention towards generative A.I. and finance. Although her company is not currently employing generative A.I. in the finance function, she believes that they should. "I think this is an area that we absolutely need to explore. It's just moving so fast that we don't have a strategy around it within finance at this point," Clifford says.

Nonetheless, Autodesk's finance team has employed machine learning algorithms. As Clifford explains, they have analyzed significant revenue and spending areas and utilized large-scale datasets to determine what using machine learning algorithms with the forecast might entail. "It's getting better and better," she remarks. "It's a crucial cross-check for us. 'The humans say 10, does the model say 10'?" She adds, "I think that computers can produce better forecasts than humans over time, given the appropriate datasets. However, humans contribute vital judgment that will never be lost."

Katie Rooney, CFO at Alight, discusses how her company's finance organization has utilized predictive models to conduct scenario planning regarding the risk of potential recessions. With regards to ChatGPT, Rooney raises concerns regarding data protection. "As we contemplate the role of the CFO and the finance function, security is becoming increasingly important," she explains. "I spend more time on that area than I did a few years ago. How data is shared is critical. Our data is our clients' data. Therefore, being incredibly thoughtful about that seems to be a key strategy for finance involvement."

Colette Kress, CFO of Nvidia Corp., highlights the increased emphasis on A.I. in business. "We have now reached a point where we believe that A.I. is an inflection point," Kress states during Morgan Stanley's Technology Media and Telecom Conference in March. "Our focus in terms of large language models, recommender engines, or natural language processing that we have done, is not only contributing to that inflection point, but we have also reached a point in time with generative A.I., particularly with ChatGPT, where people understand how it can benefit them even in the simplest cases."

Hood's conversations with finance leaders reveal that "we're going to evaluate how A.I. is impacting or integrated into everything we look at with new technology coming in," he says.

Overall, while finance leaders recognize the potential benefits of generative A.I., they are also cautious of the associated risks and are prioritizing data security. Many are exploring the technology and experimenting with its uses while emphasizing the importance of human judgment in conjunction with A.I. forecasting capabilities. With the technology advancing rapidly and garnering increasing attention, it seems likely that generative A.I. will become a more significant aspect of finance in the coming years.

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