AI in Finance: Threat or Invaluable Assistant?

Welcome Message

Welcome to the first issue of Balanced AI Insights! As a practicing CFO and AI enthusiast, I'm excited to launch this weekly newsletter, arriving in your inbox every Tuesday. Our mission is to explore the responsible and effective integration of AI into finance, helping you navigate this transformative technology with confidence and insight.

My AI Journey: From CFO to AI Advocate

As a tech-savvy CFO constantly seeking ways to optimize processes and do more with less, my journey into AI began almost a year ago. I was a full-time CFO back then and I kept hearing from my boss "Use AI" and "Do more with less". Well, easier said than done.

I switched to Fractional CFO later on, and since I got some space in my calendar, I started to explore what "Use AI" actually means for professionals like me. After hundreds of hours of courses, webinars, and tutorials, I've started to figure out meaningful ways to integrate AI into my day-to-day CFO tasks.

Several months ago, I adopted what I call an "AI-First Approach". This means that whenever I encounter a new task, I first consider how AI might assist. This approach has allowed me to continuously experiment and discover valuable use cases that I can then automate.

This ongoing exploration has not only transformed my work but has also revealed the potential of balanced AI adoption in finance. I'm excited to share this experience and insight with you through this newsletter.

Main Feature: The Balanced View

Embracing AI in Finance: Finding the Right Balance

In recent conversations with fellow finance professionals, I've noticed a recurring theme: anxiety about AI's role in our field. Many view AI as a threat to their jobs. While I understand these concerns, my experience has led me to a different conclusion.

I've come to see AI as an invaluable assistant – always available, relatively inexpensive, and incredibly efficient. Far from taking our jobs, AI is making our work more engaging by shouldering the burden of repetitive tasks and allowing us to focus on value-adding activities. Think about the typical CFO job description: attention to detail, ability to work under pressure, and capability to meet tight deadlines. These often translate to hours spent reconciling statements, double-checking reports, and processing vast amounts of data – necessary but rarely exciting tasks.

By embracing AI as a powerful tool, we can enhance accuracy, free up time for strategic thinking, respond more quickly to market changes, and develop new skills in data-driven decision-making. The future of finance isn't about AI replacing humans; it's about humans and AI working in tandem, each leveraging their unique strengths. Our roles will evolve to focus more on interpreting AI-generated insights, making strategic decisions, and providing the ethical oversight and contextual understanding that AI cannot.

As we continue this journey together, I encourage you to view AI not as a threat, but as an opportunity to redefine and enhance your role in finance. In the coming weeks, we'll explore practical ways to implement this balanced approach, ensuring that AI becomes a powerful ally in your professional toolkit.

Poll: What's your AI spirit animal?

Choose your AI spirit animal based on how you view AI's impact on finance jobs:

A) 🦕 Dinosaur: "AI will make us extinct! Time to panic!"

B) 🦊 Fox: "I'll outsmart AI by learning to work with it. Adapt to survive!"

C) 🦥 Sloth: "AI can't replace my unique ability to... wait, what was I saying?"

D) 🦸 Superhero: "With AI as my sidekick, I'll save the finance world!"

Reply with your choice! And remember, no matter which animal you pick, there's always room for evolution in the AI jungle. 😉

Case Study: Balanced AI in Action

Streamlining Post-Acquisition Reporting Integration with AI

A company recently acquired a promising startup. The CFO faced the challenge of quickly integrating the startup's financial reporting and budgeting into the parent company's systems, despite different accounting systems and report formats.

_{What AI helped with:}

While long-term plans involved migrating systems, the CFO implemented an AI-powered solution for immediate integration. The AI-assisted approach included:

• Report Format Conversion: AI tool trained on both companies' report formats for quick conversion

• Data Mapping and Reconciliation: Automated mapping of financial data with discrepancy flagging

• Automated Draft Consolidation: Production of draft consolidated reports

• Budget Integration: Assistance in translating the new company's budget to the parent company's format

As a result, consolidated reports were produced within weeks of the acquisition, rather than months. The finance team could focus on analyzing the combined business rather than struggling with data integration, allowing for faster realization of synergies between the two companies.

Perhaps most importantly, this balanced AI approach allowed the CFO and finance team to maintain a healthy work-life balance during the integration process. What would normally be a stressful period requiring long hours and weekend work was managed with significantly less overtime. AI can not only enhance efficiency but also contribute to employee well-being!

_{What AI couldn't do:}

I always emphasize that AI is not a magic bullet and needs to be carefully balanced with real human expertise.

In this case, AI failed to notice a crucial difference. Not only was the format of the reports different, but the revenue recognition method in the acquired company also differed from that of the parent company.

As a result, the first iteration of the combined reports perfectly matched in format, but the combined numbers didn't make sense. That was fixed by adding one more step to the reporting consolidation process. But that only emphasizes the importance of balancing AI with human expertise.

Ask the AI CFO

Q: "I'm interested in adopting AI in my finance department, but I'm not sure where to start. What's the first step?"

A: Great question! The key is to focus on your biggest pain point - that task everyone in your finance department dreads. Here's a step-by-step approach to get started:

1. Identify the most time-consuming or frustrating task in your department. This could be complex reconciliations, detailed report generation, or data-heavy analysis.

2. Try using publicly available AI tools (like Claude or ChatGPT) to handle this task or a part of it. Remember the AI-first approach - start by experimenting with AI, and if it doesn't work, you can always switch back to classic tools.

3. Start with a pilot project. Implement the AI solution for a portion of the task or for a limited time period.

4. Measure the results. Compare the efficiency and accuracy of the AI-assisted process to your traditional method.

5. Gather feedback from your team. Understand their experience and any challenges they faced.

Remember, the goal is not to replace your team but to enhance their capabilities and free up time for more strategic work. By tackling a major pain point, you can achieve significant improvements quickly, which helps build momentum and support for further AI adoption.

If you want to shortcut this process and avoid potential pitfalls, consider getting expert help. As a consultant in this field, I can guide you through identifying your department's biggest pain points, selecting the right AI tools, and implementing them effectively – all while maintaining that crucial balance we've discussed. Sometimes, a little expert advice can save you a lot of time and effort in the long run.

Upcoming Webinar: AI-Powered Budgeting: A Practical Guide

Don't miss my upcoming free webinar on September 25, 2024 where we'll dive deeper into practical strategies for integrating AI into the budgeting process.

Register now!

News of the week

This week's biggest news is the launch of the o1 family of models by OpenAI.

I already have access to the model preview in my ChatGPT account. Multiple experts have been experimenting with this model since its launch, and I am one of them.

So far, the model is reportedly best at complex reasoning. It 'thinks' much longer before providing an answer, and users can observe the thinking process.

I must say, it's a bit unnerving, like peering into someone's mind. I've been skeptical about using AI for complex problem-solving before, so I'm curious to see if this will change my perspective.

Closing Thoughts

As we wrap up this first issue of Balanced AI Insights, I want to emphasize the transformative potential of AI in finance when approached with balance and purpose. The key is to view AI not as a threat, but as a powerful tool that can enhance our capabilities and improve our work-life balance.

Remember, the goal isn't to replace human expertise but to augment it. By adopting an AI-first approach and focusing on those pain points in our finance departments, we can free ourselves to engage in more strategic, value-adding activities.

I encourage you to start your AI journey today! Experiment with publicly available tools, tackle those dreaded tasks and don't hesitate to seek guidance when needed. The future of finance is here, and it's a balanced collaboration between human insight and AI capabilities.

We Want Your Feedback!

This newsletter is for you, and we want to make it as valuable as possible. Please reply to this email with your questions, comments, or topics you'd like to see covered in future issues. Your input shapes our content!

Want to dive deeper into balanced AI adoption for your finance team? Or do you want to hire an AI-powered CFO? Book a consultation! 

Did you find this newsletter helpful? Forward it to a colleague who might benefit!

Until next Tuesday, keep balancing!

Anna Tiomina 
CFO & AI Enthusiast