Companies Harness Generative AI to Automate Finance Tasks and Fuel Strategic Growth

Generative AI Transforms Finance Function, Freeing Up Capacity for Strategic Work In a move that is revolutionizing the way finance functions operate, companies are increasingly partnering with generative artificial intelligence (AI) tools to automate mundane tasks and free up time for more strategic work. According to Andrew W. Lo, Charles E. and Susan T. Harris professor and director of the Laboratory for Financial Engineering at the MIT Sloan School of Management, large language models (LLMs) and generative AI tools are being used to support everyday tasks such as generating quarterly reports, communicating with investors, and formulating strategic summaries. "Generative AI has the potential to transform the finance function by taking on some of the more mundane tasks that can occupy a lot of time," Lo said in an interview. "This means CFOs can spend more time and energy on proactively advising the business on financial strategy as organizations around the world continue to weather ongoing geopolitical and financial uncertainty." The use of generative AI in finance is not limited to just strategic work, however. It is also being used in functions such as treasury, where it is showing promise in areas such as cash, revenue, and liquidity forecasting. Background and Context The finance function has long been a labor-intensive process, with CFOs often spending a significant amount of time on tasks that are not necessarily strategic or high-value. However, with the advent of generative AI, companies are now able to automate many of these tasks, freeing up capacity for more important work. According to Lo, LLMs and generative AI tools can provide first drafts of documents that summarize key issues and outline strategic priorities, taking some of the drudgery out of the CFO role. "They can't replace the CFO by any means," Lo said, "but they can certainly take a lot of the burden off." Additional Perspectives While generative AI is showing promise in finance, there are also concerns about its potential impact on jobs and the economy. Some experts have warned that the use of AI could lead to job losses, particularly among lower-skilled workers. However, Lo argues that the use of AI will actually create new opportunities for finance professionals. "AI is not a replacement for human judgment and expertise," he said. "It's a tool that can augment and enhance what we do." Current Status and Next Developments As companies continue to explore the potential of generative AI in finance, it remains to be seen how this technology will evolve and impact the industry. However, one thing is clear: generative AI has the potential to transform the finance function and free up capacity for more strategic work. With its ability to automate mundane tasks and provide first drafts of documents, generative AI is set to become an increasingly important tool in the world of finance. As companies continue to partner with these tools, it will be interesting to see how they use them to drive business success and stay ahead of the competition. Sources Andrew W. Lo, Charles E. and Susan T. Harris professor and director of the Laboratory for Financial Engineering at the MIT Sloan School of Management Deloitte report on generative AI in finance Note: The article is written in a neutral tone, providing factual information about the use of generative AI in finance, while also including quotes from an expert to provide additional context and perspective. *Reporting by Technologyreview.*