“AI” has undoubtedly been one of the biggest business buzzwords this year; Collins Dictionary even named it its word of the year. Finance departments aren’t immune to the hype – many have begun using AI to help create efficiencies and improve processes. In this post, we’ll discuss how organizations are using AI tools for finance throughout 2024.
AvidXchange surveyed 500 finance executives in September 2023 to learn more about their priorities for 2024. Unsurprisingly, AI was at the top of that list. Below are the insights they shared with us.
Teams Already Use AI Tools for Finance
Our 2024 Trends Survey revealed that 72% of finance departments are already using AI. Sixteen percent of respondents said their organizations have plans to implement AI in 2024. Eight percent said they are interested in implementing AI but have no current plans to do so. The remaining 4% of respondents said their department does not use AI tools for finance and is not interested in doing so.
Of the various AI tools for finance available today, most finance departments (55%) are using natural language processing (NLP). NLP tools can extract financial data from documents like balance sheets and enter it into financial systems and spreadsheets.
Computer vision is another popular AI tool for finance departments – 48% of those we surveyed said they use it. Computer vision can “see” data in images. Finance teams use computer vision to improve accuracy and speed in data entry.
Most AI Tools for Finance are Developed In-House
The majority (71%) of finance leaders we surveyed said their company is establishing AI technology in-house. Only 29% said they are outsourcing this responsibility.
There are some concerns surrounding AI and proprietary information. These are especially notable in finance departments where financial data and banking information must be protected. Expectedly, most finance departments are building AI tools in-house rather than using public-facing tools.
Lack of Understanding is a Barrier for AI
What are the barriers preventing finance executives from adopting AI in their organizations? We asked in our 2024 Trends survey, and responses included:
• Lack of understanding around the technology – 37%
• Hesitations and concerns on the technology’s regulation/safety – 33%
• Costs to implement the technology – 25%
To address the lack of understanding, 49% of organizations are supporting finance employees with digital upskilling. This refers to workplace training opportunities that give employees a chance to expand their abilities to take on new jobs and responsibilities.
Additionally, organizations are offering mentorship programs (28%) and open forums for feedback (15%) to support finance employees as they learn how to use AI in finance amidst larger digital transformation efforts.
How is AI Used in Finance?
We wondered, “How is AI used in finance departments?” We found the most common applications of AI in finance are currently customer service (67%), fraud detection (64%), risk management (64%) and investment management (57%).
Fifty-two percent of departments use AI for automation. Automation offers finance teams countless benefits including improved efficiency, streamlined workflows and better process visibility. Thirty-nine percent of finance departments utilize AI tools for compliance-related tasks.
Finance Leaders are Comfortable Using AI Tools
Despite Gartner’s recent report stating that only 11% of finance managers display digital competency, a majority (60%) of the finance leaders we surveyed said they are “very comfortable” using AI tools. Only 12% of survey respondents said they are “hesitant” or “very uncomfortable” working with AI. The remainder (28%) said they feel “somewhat OK” using AI.
What are the Best AI Tools for Finance?
Implementing AI tools for finance involves careful planning and vetting. Since finance departments deal with sensitive data, they must ensure that whatever AI tools they use comply with industry regulations, data privacy laws and internal compliance policies.
Because of this, the best AI tools for finance are those that can be licensed for private organizational use, never sharing your internal data with a public audience or allowing public tools to train themselves with your proprietary information.
Other considerations include:
• Easy integration with your existing accounting system
• Scalability and flexibility as your business changes and grows
• Support and training opportunities for staff
• Security features such as encryption and access controls
Check out AvidXchange’s complete 2024 Trends Survey by downloading our free whitepaper, “2024: Anticipating Tomorrow’s Trends.” And learn more about how finance departments are using AI in our report, “The Ultimate Guide to AI in Finance.”
Learn more about automating your accounts payable processes with AI solutions for finance by scheduling a demo with one of our AP automation experts.