ML Is Redefining Finance, but What's Holding It Back?
The finance sector stands at a crucial juncture. A recent study from Paro, a company offering AI-powered finance and accounting solutions, brings to light the vital role of artificial intelligence (AI) and machine learning (ML) in shaping the future of finance. The 2023 Paro Future of Finance survey, involving 250 C-suite and senior-level managers, uncovers a stark reality: While most recognize AI and ML's importance, significant barriers hinder its full-scale adoption in the finance domain.
The survey reveals that 83% of finance leaders believe in adopting AI and ML technologies for future success. However, it also highlights that 42% of businesses are yet to embrace these advancements. The reasons range from technology and data challenges and regulatory and compliance issues to resource constraints and the need for cultural and leadership shifts.
Anita Samojednik, Paro's chief executive officer, emphasizes the situation's urgency: "Leaders must harness AI to transform their finance teams into strategic catalysts for future success," she notes. "Today's complex, shifting financial environment is straining finance teams. As a result, they often struggle to provide the strategic insights needed to guide business decisions. Companies that don't evolve risk underperforming their peers and becoming less competitive."
The survey further highlights a skills gap in the current finance workforce. Over half of the respondents (53%) cited a lack of advanced analytical skills in their teams, with an additional 38% pointing to deficiencies in data governance and technology proficiency. Notably, C-suite executives are more likely to identify this gap, with 59% agreeing on this weakness, compared to 43% of owners or partners.
Cybersecurity and data security emerged as the primary concern among participants (54%) regarding adopting AI and ML. This apprehension is followed by fears of losing human judgment (39%), the cost of acquisition or integration (35%), and a lack of transparency in AI processes (33%).
Despite these challenges, the study also uncovers a silver lining. More than half of the businesses surveyed have already adopted AI/ML technologies, mainly in predictive analytics, process automation, and personalization. Additionally, 61% of finance teams collaborate with other business units beyond transactional support, indicating a shift towards a more strategic role.
Image credit: iStockphoto/ALLVISIONN
