Generative AI

Transforming financial practices: Unveiling the potential of generative AI in accounting

Financial practices are rife with tasks that are repetitive, detail-oriented, and often tedious. As a result, global corporations have been increasingly relying on technology to streamline their work, automate repetitive tasks, and deploy intelligent solutions to improve their efficiency. With its rapid development, integrating generative AI in accounting and finance has become a key talking point for value creation by leveraging financial data and optimising financial analysis.

Let us explore the transformative role of generative AI in accounting and how you can leverage generative AI solutions in your finance and accounting operations.

Applications of generative AI in accounting and finance

We can categorise any applications and use cases of generative AI in accounting and finance into three categories, namely automation, augmentation, and acceleration. Leveraging AI for financial analysis will either automate routine tasks, augment the team's abilities with data-rich insights, or accelerate financial analysis for enhanced efficiency.

Building on this, the main ways the accounting and finance industry is leveraging generative AI solutions include:

Financial reporting

Finance professionals often work on repetitive and tedious assignments, ranging from drafting contracts and credit reviews to creating comprehensive financial reports and quarterly summaries for various stakeholders. Generative AI offers a solution to streamline this process, making it easier and more efficient for finance professionals to sift through numerous documents and generate reports. This enables them to allocate their time and attention to more strategic tasks. As a result of this increased accuracy and speed, finance leaders can be more strategic in resource allocation, improving financial controls, and managing cash flow.

Virtual assistants

Virtual assistants serve as an excellent illustration of AI's integration into accounting and finance, particularly in personal finance services. By leveraging generative AI, these virtual assistant chatbots can engage in natural conversations and effectively address customer inquiries using extensive knowledge databases.

Capital markets research

Finance professionals have to effectively navigate through company filings, reports, and intricate data to grasp global market trends and risks. Generative AI tools serve as valuable research assistants in this regard, enhancing financial analysis capabilities by swiftly identifying trends and summarising crucial information.

Improved data analysis

Although advancing data analytics capabilities have been enhancing financial data analysis efficiency, generative AI solutions take it to the next level, processing vast amounts of data to extract valuable insights that were previously inaccessible. Finance professionals can now upload raw data from ERP systems to generate insights and automate reporting to highlight key data points for different stakeholders.

Regulatory compliance

The current regulatory landscape in the finance and accounting industry is highly dynamic, with existing regulations changing and new rules emerging every year. Failing to understand and implement these changes can be detrimental. Generative AI provides valuable context for understanding the revised regulations and assists businesses in discerning the adjustments required to ensure compliance.

These are just some examples of how generative AI is changing the landscape of financial practices. Looking to the future, generative AI in accounting and finance can revolutionise the landscape by:

• Transforming the core processes that encompass various finance workflows.
• Reinventing business partnerships by changing how companies offer financial insights to different stakeholders.
• Improving risk management and mitigation by finding anomalies, such as fraud or non-compliance, and generating potential financial scenarios to build effective response strategies.

Benefits and challenges of generative AI in financial analysis

As the use cases of generative AI in accounting and finance continue to evolve, the benefits it can offer the accounting and finance industry are becoming apparent. Six significant benefits of generative AI in financial analysis are:

• Informed financial decision-making
• Optimised spending
• Proactive risk management
• Advanced fraud prevention
• Regulatory compliance
• Lower risk of audits and penalties

On the other hand, to fully realise the potential of generative AI in accounting, corporations must focus on responsible and ethical use of AI solutions and overcome the challenges of:

• Potential for errors and bias
• Lack of transparency or the "black box" problem
• Data privacy and security
• Potential over-reliance on technology
• Ethical considerations with data use
• Legal liability

Despite these challenges, financial leaders are rolling out innovative ideas with the help of generative AI to help improve efficiency and empower their employees to augment their capabilities and productivity.

How can Infosys BPM help?

As AI transforms the finance industry, leveraging Gen AI finance and accounting is crucial to improve operational efficiency, be agile, and stay compliant in the dynamic regulatory landscape. From managing transactional queries and generating financial summaries to financial planning and analysis and anomaly detection, the Infosys BPM AI-first platform can support CFOs navigate the complexities of financial analysis and reporting, reimagine business processes, and reinforce AI ethics.