Autonomous Finance: The Impact on the Future CFO

Finance operations have come a long way since the days of spreadsheets, filing cabinets and piles of paper. But for the ultimate in modernization, autonomous finance is on the horizon. A majority of CFOs believe that horizon is not very far off and see the value of autonomous finance. However, the key to its successful adoption begins with a shift in how they themselves think about this transformative technology. 

In this blog we’ll discuss what autonomous finance is, how it differs from automation and the benefits of using it to transform the finance function of your business.

What is Autonomous Finance?

According to Forrester, autonomous finance is defined as “algorithm-driven financial services that make decisions or take action on a customer’s behalf.” Simply put it’s running the day-to-day functions in your finance department with little intervention from humans. Going well beyond automation, which focuses on replacing tedious, repetitive manual tasks with automated ones, autonomous finance leverages advanced technologies like artificial intelligence (AI) and machine learning (ML) to automate decision-based tasks and processes such as investing, forecasting, budgeting and risk management. 

What are the Key Technologies Driving Autonomous Finance?

As already mentioned, AI and ML are two of the technologies powering autonomous finance and probably the ones most bandied about at the watercooler. But there are others. Robotic process automation (RPA), natural language processing (NLP), cloud and advanced analytics are all technologies employed to deliver the benefits of real-time insights, effortless compliance and increased flexibility. 

Here are just a few examples of how these technologies drive autonomous finance.

• Artificial Intelligence can learn from historical data and patterns to make decisions without human oversight.
  
  
• Natural Language Processing enables businesses to better understand the mindset of retail investors.
  
  
• Robotic process automation uses software bots for the automation of many of the repetitive manual tasks involved in finance operations.

How Do These Technologies Impact the Office of the CFO?

While both automation and autonomous finance improve efficiency and accuracy, the technologies behind autonomous finance can dramatically change every part of your finance function: the back office, middle office, front office and office of the CFO.

The role of the CFO will evolve from one of stewardship to partnership. Before autonomous finance, the CFO serves an organization more as a manager of its financial information. After the adoption of autonomous finance, the CFO will partner with other decision makers in efforts to drive growth and reshape business strategies. They will bring data analytics to the table to provide real-time insights that were not as easily accessible or meaningful before the technology was implemented.

It’s important that the CFO have an informed understanding of the way each of the other facets of finance will function and benefit after adoption of these self-learning and self-correcting technologies. The first reason is because the CFO will be the key decision maker when it comes to choosing the best technology tools. Having knowledge of the back office, middle office and front office processes, they can ensure data integrity and manage the risks that may come with moving to autonomous finance.

And secondly, during and after implementation the CFO’s role will expand beyond traditional functions. In this new environment, the CFO will manage and optimize the finance systems that are now autonomous. This includes oversight of the integration of the new technologies, compliance and risk management around security and data privacy. Additionally, they will also find themselves collaborating with other business functions to make sure that the new autonomous systems line up with their goals and strategies. 

The CFOs who are most successful in achieving autonomous finance will shift their thinking in three ways. They’ll be open to experimentation to learn the true value of the technologies. They will trust in the new autonomous system as much as they do in their people. And they will push for adopting technologies sooner rather than later.

What are the Benefits of Autonomous Finance?

Adopting autonomous finance technologies can give your organization a tremendous competitive edge. If your finance operations are completely automated and autonomous, you’ll have more time for more strategic tasks. You’ll also be positioned to expand faster into new markets, meet regulatory demands easily and handle tax issues that may arise.

While competitors plod along, the business that has made the move to enable their finance operations to run autonomously will realize these additional key benefits:

• Decreased costs

You can significantly lower your costs when you have the help of autonomous finance to optimize the way you allocate resources. You can reduce the time and effort needed for customer service, reporting, forecasting and other areas to directly cut down on expenses.

• Increased productivity

Because autonomous finance technologies eliminate much of the time-consuming manual tasks needed for many finance functions, your team can use the time saved to work on more valuable tasks and activities.

• Higher efficiency

Obviously automation streamlines processes by replacing repetitive manual tasks. That means fewer bottlenecks in workflows and far less time spent correcting errors that inevitably occur with human input. Autonomous finance functions add another layer of efficiency with improved reporting, forecasting, cash application and more.

• Improved customer service

Customer inquiries and disputes can be resolved more quickly as they can interact with your systems at any time it's convenient for them. Better customer experiences helps increase retention rates. A study by Salesforce found that 89% of finance leaders believe that businesses that are early adopters of autonomous finance will set the bar in customer service.

What You Should Consider Before Opting for Autonomous Finance

Before you make an investment in the technologies to create an autonomous finance system, you’ll need to take a good look at your existing IT infrastructure to see if you currently have the capacity, the security and the skilled workforce to begin.

Computing infrastructure, networks and storage

Because the technologies you’re about to add to your business use large data sets and networks that demand higher computing capacity, you may need to upgrade your IT infrastructure. This could include replacing legacy systems with high-speed IT systems that are scalable.

Data quality, security and management

AI technology works with large volumes of data. You need to ensure that all the data is accurate and clean. Also, make sure that any sensitive data such as financial or personal information that AI uses is secure.

A ready and skilled workforce

One of the top challenges in moving toward autonomous finance is having the employees who possess the skills they need to work in this environment. They need to be used to working with advanced technologies and be prepared to troubleshoot in the rare case of the technology producing inaccurate results.

Conclusion

Autonomous finance is powered by the integration of advanced technologies like AI and ML as well as others. Combined, the technologies automate many of the time-consuming and error-prone manual tasks and learn over time to make judgment-based decisions and self correct.

The CFO who leads an organization to autonomous finance operations will be equipped to deliver valuable insights for decision making cross-functionally. Rather than simply serving as a steward of financial operation, he or she will bring value as a strategic partner and be instrumental in giving their organization a competitive edge by lowering costs, increasing productivity, streamlining financial operations and improving customer service and retention.

Finance executives, once considered to be among the last in an organization to embrace modernization, now have the opportunity to be future-ready with emerging technologies. They only need to step up and adopt autonomous finance.

Payference is a good place to start. As an AI-powered all-in-one cash management tool, we’re always available to discuss how you can begin the journey to autonomous finance.