According to a recent survey, 89 per cent of businesses are not yet using AI in the finance stream due to a lack of qualified internal resources. (REDPIXEL.PL/Shutterstock photo)
From health care to manufacturing organizations and insurance services, finance teams are slow to adopt artificial intelligence, a recent survey by the Association of International Certified Professional Accountants and Oracle shows. In fact, 89 per cent of businesses are not yet using AI in the finance stream due to a lack of qualified internal resources.
“The profession is slow to evolve,” says Éric Nguyen, senior manager at RCGT and leader of the firm’s Artificial Intelligence and Advanced Analytics practice. “We’re still in the awareness-raising phase. Many businesses have not changed their practices, and innovative projects are not all that common.” [See Canadian companies slow to adopt AI technologies, report says]
This sluggish adoption of AI has led to missed opportunities: 46 per cent of businesses using AI have seen an increase in sales, compared to 29 per cent of those that have held back, according to the survey.
A RAPIDLY GROWING SPACE
Thanks to the emergence of algorithms, AI applications are multiplying at a rapid pace. Take chatbots for example, or the Internet of Things. Because of AI and the implementation of learning algorithms that can improve the analytical capacity of systems, even robotic process automation (RPA) has turned into “intelligent automation” by reducing the need for manual intervention. For example, “cognitive RPA” can process email containing invoices and determine the relevant and important information to extract and enter in a system for optimal processing, just like an accountant would.
Other apps are leading the way on tax returns and bookkeeping. Instead of having to enter the figures from all your slips, the Visor app can “read” the information from documents uploaded by scanning or photographing them. Botkeeper, a fully automated bookkeeping platform, combines AI with machine learning to generate a personalized tax report by itself. (It’s also available 24/7.)
“In addition to driving down costs, AI adds tremendous value and improves efficiency,” says Nguyen. “An algorithm can analyze millions of transactions in just a few seconds, while a person would take months. There’s no denying, humans will be free to concentrate on more demanding—and more interesting—tasks.”
NEW EXPECTATIONS, NEW HORIZONS
That’s good news, because demand has changed. In a 2018 Sage survey of 3,000 accountants in eight countries, 83 per cent of the respondents said their clients have higher expectations than they did five years ago, with 42 per cent expecting to receive strategic advice. This could be why accountants are starting to pay attention to AI-powered automation.
Nguyen compares the fate of non-AI adopters to that of manual craftsmen during the Industrial Revolution. “It’s difficult and expensive to transform an established business,” he says. “But those who don’t transition to AI are going to be the craftsmen of the 21st century, fighting a losing battle against far more sophisticated adversaries born in the high-tech era.”
A recent Deloitte report confirms that 70 per cent of the businesses surveyed have started to use RPA to increase productivity (38 per cent), improve customer experience (18 per cent) or deliver automation at a significant scale (16 per cent). Cost reduction is no longer the first priority for businesses that implement RPA. They now want to hone their performance and remain competitive in the market, the report says.
In 2017, Japanese insurer Fukoku Mutual Life made headlines by replacing 34 employees with IBM’s Watson Explorer platform, in an effort to improve decision-making and customer service. The group is projected to increase productivity by 30 per cent and save millions of dollars per year within two years.
THE FUTURE OF AUDIT
But it’s not all gloom and doom for humans—far from it. AI will provide insightful recommendations or course of action, but accountants still need to be the decision maker by applying their professional judgement and taking into account the legal, social, or ethical implications.
“Auditing is a highly regulated practice, so it makes sense that we’d be slower to adopt change, especially because new assurance tools will be required,” says Nguyen. “But now, more than ever, we’re going to need people capable of performing engagements outside the box of just financial statement audits, such as auditing algorithms or client AI-enabled processes.”
For Ngyuen, algorithm auditing will be a major challenge in the next five years—one that CPAs are ideally positioned to address.
LEARN MORE ABOUT ARTIFICIAL INTELLIGENCE
Read the CPA Canada publication A CPA's Introduction to AI: From algorithms to deep learning, what you need to know to understand the buzzwords and how AI might impact your work.
And join senior leaders to explore emerging technologies in accounting, finance and business at the National Technology Forum 2019 in Toronto, Ont.