Finance Operations Lean Heavily on AI: KPMGFinance Operations Lean Heavily on AI: KPMG

New research from KPMG International has found 71% of organizations are using AI in their finance operations, with ‘compelling’ levels of ROI and a wide range of benefits being recorded. 

The research, published in the KPMG global AI in finance report, covered 2,900 organizations across 23 countries. It builds on a study conducted earlier in the year covering 1,800 organizations in 10 countries. 

Of the 71% of organizations using AI, 41% said they are deploying it to a moderate or large degree, an increase by 5% from the original research conducted in April. 

KPMG expects this will rise further to 83% over the next three years.

For the study, KPMG created a maturity framework to categorize respondents into three AI-readiness groups: Leaders, the more advanced and mature in their deployment of AI (24%), middle ground Implementers (58%), and beginners (18%). 

Of the leaders group, 95% said they are expecting to selectively or widely adopt AI within financial reporting in the next three years. For the other two groups this figure was 39%.

Financial reporting was identified as the most common usage area for AI, but this is widening to include treasury management, risk management and tax. 

As the use of AI in finance grows, the dividends multiply, KPMG said. When starting out, finance teams reported two to three benefits, but by the time they reach the leaders stage, that number is seven, according to the report. 

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Furthermore, 57% of leaders say ROI is not just meeting but exceeding their expectations. Even amongst less advanced adopters, nearly a third (29%) reported the same.

“Our research confirms it,” said David Rowlands global head of AI at KPMG International

“AI is truly a global phenomenon that is being adopted by finance teams across markets and sectors. The benefits it can bring, and the return on investment it can deliver, make it a key strategic focus.”

The journey is only going to accelerate, he added, as new capabilities come on stream. 

For example, the use of generative AI has grown with the percentage of companies with no intention to use the technology falling from 6% to just 1% in this survey. 

Companies are experimenting with piloting or using AI for treasury and risk management, but for tax management companies are slightly behind, with fewer than one-third of piloting or using AI in this area.

Common barriers that all companies reported encountering when adopting AI include data security vulnerabilities (57%), limited AI skills and knowledge (53%), gathering consistent data (48%) and costs (45%).

Rowlands said while there are barriers, companies should act now to reap the benefits.

“Businesses need to proceed with robust governance in place and a clear focus on the outcomes they’re looking to achieve, but the potential benefits are multiplying as we get further into a new era powered by AI,” said Rowlands.