Majority of finance leaders bet on AI and ML for the future of banking, study shows

By Puja Sharma

Study from Paro reveals 83% of finance leaders agree adopting AI and ML are crucial to the future of finance, but data, regulations, and talent shortages are slowing progress for some

Paro, a finance and accounting AI-powered growth platform helping companies embrace digital transformation to build for the future, released findings from the 2023 Paro Future of Finance survey of 250 C-suite and senior-level managers on the intersection of artificial intelligence (AI) and finance. The data highlights the critical role of strategic finance services in enabling the transformation required to thrive in the modern digital era.

AI is radically transforming finance and accounting by changing how teams operate and interact. This requires strategic enablement and expertise to adapt to new roles, skills, and processes. The new research shows that finance and accounting executives understand the importance of emerging intelligent technology on future success, with 83% of respondents saying adopting AI and machine learning (ML) is important for their business.

Yet despite leaders clearly recognizing the promise of AI in finance, 42% of businesses still haven’t embraced it. The research revealed many obstacles are preventing finance teams from becoming more strategic, including technology and data challenges, regulatory and compliance issues, resource constraints, and cultural and leadership changes.

“Leaders must harness AI to transform their finance teams into strategic catalysts for future success,” said Anita Samojednik, CEO of Paro. “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 run the risk of underperforming their peers and becoming less competitive.”

Senior finance leaders need more advanced analytical skills from their teams
More than half of all respondents noted that their current finance team lacks advanced analytical skills (53%), followed by lack of data governance and technology proficiency to use tools and software (38% respectively).

It is largely C-suite executives who are flagging the lack of advanced analytical skills, with 59% agreeing on this area of weakness in their company, compared to 43% of owners or partners.

Among respondents who agreed that adopting AI and ML was extremely important for their business, 49% thought that technological proficiency to use tools and software was lacking in their finance team.

Lack of trust and difficulty translating insights undermine data for analytics
When it came to potential concerns or hesitations around AI and emerging intelligent technology, cybersecurity and data security were participants’ primary concern (54%). This was followed by the loss of human judgment or oversight (39%), cost of acquisition or integration, (35%) and lack of transparency or understanding of how it works (33%).

In addition, loss of human judgment or oversight was the most popular choice for AI-related concerns among middle management (55%), compared to roughly a third of owners/partners (35%) or C-suite (31%).

From backward-looking reporting to forward-looking strategic advising
Despite the obstacles preventing finance teams from adopting more strategic approaches, many organizations have embraced the evolving role of finance.

Key Takeaways:

• More than half of respondents’ businesses have already adopted AI/ML technology (57%). Of those that have already adopted it, 57% state the technology has been adopted in predictive analytics and forecasting, 56% in process automation for internal workflows, and 54% in personalization.
• More than half of companies are using AI/ML-driven data for long-term strategic planning.
• 44% of respondents are already using AI/ML technology for recruiting and hiring processes.
• Close to two thirds of finance teams (61%) partner with other business teams beyond transactional support.
• Planning and reporting rank high on participants’ finance function readiness for automation.