Mind-blowing advancements in technology and generative AI have catalysed profound disruption within finance functions over the last six months.
But how can CFOs architect the AI future of finance without getting carried away or left behind?
Ludmila Rufitskaya, CFO of Decathlon Brazil and Justin Merrit, Vice President of Product Management at Planful share their thoughts on the trajectory of transformation, and the starring role humans are set to play alongside their AI tool counterparts.
First things first, it’s time to put the age-old question of hype versus reality to bed.
While it’s true that “AI is nothing new, it’s been around fifty to sixty years” says Merrit, “the difference is that now technology has caught up to the point where we can start having really meaningful types of applications developed that use AI (...) like chat GPT and generative AI frameworks.”
Rufitskaya agrees “the changes are real and they’re happening soon.” AI-driven analytics for deepening market understanding and price positioning are already driving the future of finance at Decathlon’s to new heights.
“For me, personally, it's a goldmine. Estimation of pricing elasticity has always been a very obscure topic, where we're more piloting with our heart, instead of doing the analysis with our brains. I'm very excited to have better models based on larger numbers of inputs that I can use in my work.”
Whether or not your excitement outweighs your trepidation, drifting directionless into AI transformation could be as damaging as the risk of over-hyping its potential. Both mindsets position AI in competition with human ability, when the key lies in the sweet spot of collaboration. As Merrit says:
“AI doesn't threaten your job, but someone who knows how to effectively use AI certainly can.”
Knowing where you can add the value of human ingenuity to the use of AI in finance reflects the changing role of the CFO from bean counter to business strategist. Rufistkaya sums it up as a shift away from reading and explaining to executing, action planning and monitoring.
“Right now we have a lot of time that's taken up by just reading the statements, highlighting the deviations, highlighting the trends. In the next two years, this job will be partially or completely automated (...) What will not yet be automated is how to transform those conclusions into an action plan and how to execute and really act on those findings.”
It seems the more we lean on machines, the more we’ll need CFOs to deliver a decidedly human touch with “more expertise, authority and responsibility taking,” says Rufitskaya.
So what does the trajectory of AI in finance look like, and where will CFOs be called upon to have the most steer?
“When we use AI products we can see that they base themselves on the past” says Rufistkaya. “It’s extremely difficult to get AI to take into account daring, unexpected events, or major trends that will accelerate in the future.” She also describes AI as extremely generic and lacking in context. “The human will always be compensatory for those two flaws.”
The secret sauce for CFOs is leveraging the predictive power of GenAI to secure a competitive edge.
“If we have GenAI providing baseline information we end up with more confidence in the predictable,” says Merrit. “This actually kind of pushes the envelope of performance for businesses. GenAI in particular can help us remove uncertainty between the business leader and what we're suggesting.”
Businesses are better positioned to become outliers and outperform one another as a result:
“It frees up additional funds, it frees up that ability to look at stretch goals we have as a business and maybe even stretch those further, which I think is really exciting, because it can really help increase the pace at which businesses are able to grow and innovate.”
It’s all well and good feeling secure enough that robots won’t replace your own role as CFO, but what’s in the GenAI revolution for the rest of your team?
There’s no denying that low level analysis will increasingly become more automated, but it might not be all bad news for younger talent in particular:
“I’m looking forward to that because I can see that in my team, I have a lot of talented young people that deserve better than just spending hours picking up on deviations,” says Rufistkaya.
Reducing inefficiency seems to be biggest selling point for members of the team that might be twitchy about the implementation of AI in finance:
“When your business is growing, every day there are new responsibilities. I leverage this growing load of work to convince my team that any new technology will be of help to us. Everybody feels that they have too much to do, everybody feels that their priorities are chaotic.” says Rufistkaya. “If you identify people who are not very open, maybe it's a sign that they already don't have enough workload in their area.”
So unless you’re not busy enough (.... said no one in finance ever) more time to do more is always a blessing. And it’s not just an open mind you need to factor into hiring decisions when it comes to setting your team up for success in the future of finance. It’s important to factor in what GenAI can’t do.
“Focus on people with communication and leadership skills,” says Merrit. “You need people who have more of an understanding of the spirit of accounting and topics like ESG. Those things are complex topics to understand and get a handle on.”
Topics we can’t trust machines to have all the answers for just yet.
A lack of vision rather than a lack of capability seems to be the biggest threat to letting AI in finance outdo us in the modern world:
“If you don't have the skills to envision the future and the possibilities in your area, to give the new prompts to AI and find new solutions, that puts you as a specialist at risk in the modern world,” says Rufitskaya.
CFOs should instead rise to the challenge of finding opportunities to be creative, and push back on the perception that there are none in finance.
Visionary skills can be honed and developed much like any other, according to Rufitskaya, by getting together with like-minded humans:
“Creativity is a collaborative process (...) If you want to develop with steam, develop collaborative dreaming”
If collaborating with other humans optimises effective collaboration with AI, then retaining our humanness will only become more - not less - important for the future of finance.
“The key is to keep being human,” says Merrit. “Keep being curious, keep trying new things, and keep remembering that change happens around us. We can either be a part of it or not.”
Check out the Talks recording below which featured Ludmila Rufitskaya, CFO of Decathlon Brazil and Justin Merrit, Vice President of Product Management at Planful share their thoughts on AI in Finance.
Chris is the founder and MD of GenerationCFO.com and creator of the Digital Finance Function Model and a contributor to many articles on our platform. Chris focuses on the shift toward digital transformation in accounting and finance, shows you what good looks like, then helps to get you there!