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CFOs May Be Slow to Adapt to AI and Other Technology Tools

S.J. Steinhardt
Published Date:
Apr 19, 2023

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Artificial intelligence (AI) and other nascent technologies have applications and implications for chief financial officers, who need to adapt to them, The Wall Street Journal reported.

AI and automation will result in half of all new employees hired by top-performing corporate finance functions having backgrounds other than finance or accounting by 2026, a recent Gartner study predicted—as opposed to only 18 percent of finance staff and 11 percent of their managers demonstrating digital competency today.

A problem may be that some accountants and CFOs may be risk averse, according to one professional.

“Finance people tend to be inherently conservative,” said Myles Corson, the global and Americas strategy and markets leader for financial accounting advisory services at Ernst & Young, in an interview with the Journal. As the technology is moving faster than regulation, “[t]here will need to be guardrails and CFOs would like to see where information is being shared,” he said.  

One observer sees the potential for CFO software and services.

“Certainly, with artificial intelligence, it will have to go through that rite of passage,” said Mark Bean, managing director at THL Partners, a Boston-based private-equity firm with a focus on financial, business and healthcare technology companies. He said that such cutting-edge tools can be especially useful for budgeting and forecasting, saving a lot of time.

Dev Ahuja, the CFO of Novelis Inc., an industrial aluminum company, told the Journal that “[h]aving some quick wins can be a big motivator to get on to larger projects,” referring to his company’s pilot project to develop in-house machine-learning technology for cash flow forecasting.

The pandemic spurred tech adoption for some companies. Bank of America Corp.’s existing CashPro app for corporate clients gained in popularity when COVID-19 hit and workers went remote. “It felt like the pandemic collapsed 10 years’ worth of adoption into two years,” said Faiz Ahmad, head of the company’s global transaction services. The app processed $655 billion last year, up from just $40 million five years ago. 

But, Ahmad said, “Our biggest threat is inertia."

Sixty-five percent of 700 global finance leaders surveyed by corporate performance-management software maker Prophix Software said they plan to be more than half-automated by year’s end—but 62 percent said implementing technology is the biggest obstacle instead of cost.

“Unfortunately, our biggest competitor is actually Excel,” Prophix Software's CEO, Alok Ajmera, told the Journal.