The integration of AI into finance has numerous benefits, including the following:
1. Increase efficiency and productivity
The list of ways AI can help increase efficiency and productivity in the finance department is already lengthy—and it’s just the beginning. The automation of numerous financial processes—such as data collection, consolidation, and entry—is already a notable add. It helps shift the role of finance from reporting on the past to focusing on the future, through analysis and forecasts that serve the company.
However, that’s merely the start of where finance could implement AI to drive efficiency and productivity. For instance, finance teams are also deploying GenAI to make it easier to find information, fill knowledge gaps, and get work done. Use cases include writing assistance, summarization, analysis, and chat. According to one 2023 study from Boston Consulting Group and MIT Sloan, GenAI improved a highly skilled worker’s performance by as much as 40% compared with workers who didn’t use it. A 2024 PwC report found that 60% of CEOs expect GenAI to create efficiency benefits. And a 2024 NVIDIA survey of 400 global financial services professionals found that “created operational efficiencies” was the AI benefit cited most often by those surveyed at 43%.
2. Improve customer experience and retention
AI helps enhance customer experience and retention by letting businesses deliver personalized, proactive, and integrated interactions across various touchpoints. Personalization is a good example. In a 2024 report by Forrester, 42% of executives surveyed identified the hyperpersonalization of customer experience as a top use case for AI.
AI can help deliver personalization by analyzing customer data, preferences, and behavior to provide the right product recommendations, content suggestions, and offers. Companies can also take it a step further with AI-driven customer segmentation for more-targeted marketing campaigns and promotions. AI can even help make pricing personalized, using real-time insights about individual customer preferences, market changes, and competitor activity to optimize price and discounts.
AI is becoming integral to customer retention with predictive analytics forecasting future customer behavior, lifetime value, and even churn likelihood, letting businesses focus their efforts on proactively addressing issues as they arise.
Lastly, AI-powered chatbots and digital assistants strengthen relationships with customers by answering questions on demand and providing fast, around-the-clock service.
3. Decrease errors
AI in finance can help reduce errors, particularly in areas where humans are prone to mistakes. High-volume repetitive tasks can often lead to human error—but computers don’t have the same issue. Leveraging the advanced algorithms, data analytics, and automation capabilities provided by AI can help identify and correct errors common in areas such as data entry, financial reporting, bookkeeping, and invoice processing.
4. Reduce costs
AI is already showing the ability to help reduce costs. In the NVIDIA survey, more than 80% of respondents reported increased revenue and decreased annual costs from using AI-enabled applications. Further, AI implementation could cut S&P 500 companies’ costs by about $65 billion over the next five years, according to an October 2023 report by Bank of America.
AI can help reduce costs in many ways. Task automation is an obvious cost reduction tactic, letting companies decrease their labor costs, fill workforce gaps, improve productivity and efficiency, and have employees focus on strategic, value-adding activities. Companies also say that better insights and decision-making facilitated by AI is key to decreasing costs. Organizations using AI may be better able to optimize inventory levels and supply chains, detect fraud, identify cost-saving opportunities, and allocate resources more effectively.
5. Improve decision-making
A 2023 study by Oracle and New York Times bestselling author Seth Stephens-Davidowitz shed light on the dilemma faced by business leaders around decision-making—and the results were sobering.
AI’s abilities around data management collection, analysis, and contextualization—just to name a few—help eliminate many of the decision-making roadblocks cited by business leaders.
6. Enhance risk management
AI is particularly instrumental in fraud detection. Trained machine learning models process both current and historical transactional data to detect money laundering or other bad acts by matching patterns of transactions and behaviors.
AI-based anomaly detection models can also be trained to identify transactions that could indicate fraud. AI systems in this case are continuously learning, and over time can reduce the instances of false positives as the algorithm is refined by learning which anomalies were fraudulent transactions and which weren’t.
AI’s capacity to analyze large amounts of data in a very short amount of time is an asset to the finance team. Whether it be analysis of supply chains, operations, or financial markets, AI can help quickly identify potential risks and use predictive modeling techniques to assess the likelihood and impact of possible outcomes.
7. Scalability
A major reason that AI is taking off now, and is accessible to such a broad base of companies, is because of today’s cloud-based AI platforms. AI systems, particularly generative AI, require a lot of computing power. The models are also frequently updated. Those two factors make it very hard to “buy AI” and run it in an organization’s own data center. Cloud computing platforms provide scalable infrastructure and resources for deploying and running AI applications, so companies pay for the capabilities they need and enjoy updates without the need for patching and software updates. For companies that use cloud-based ERP systems, the incentive to use AI technology from the same cloud is substantial. There will be much less concern for moving and preparing data for AI if originating systems reside in the same cloud infrastructure.
Enchant Apps has a team of Oracle Cloud experts across all modules. If you are interested in learning more or have a project where you need Oracle cloud expertise, feel free to contact us!