The Future of Intelligent Finance

According to a recent report by McKinsey&Company, digitalization and generative artificial intelligence are entering their third wave, and the intelligent automation revolution has arrived. Enterprises can significantly improve productivity, especially in financial operations, by integrating unstructured content into the structured data analysis capabilities of artificial intelligence.

For Chief Financial Officers (CFOs) and their teams, this era is full of opportunities, but also comes with risks that cannot be ignored. The best CFOs are adept at balancing risks and opportunities, and those who can effectively achieve this balance will have the opportunity to write a new chapter for the leadership in the AI era. An effective AI strategy is not just about choosing tools, but also requires a deep understanding of business value and ensuring that every technology investment brings clear returns.

Firstly, payment and cash flow management are two prominent areas. According to Gartner's research, organizations that have successfully implemented AI strategies are leading in customer payment forecasting. The study shows that 46% of organizations have successfully utilized AI for customer payment forecasting, demonstrating the enormous potential of AI in improving efficiency. An estimated $44 trillion in funds are locked in the global supply chain at any time. Effectively managing these funds, and even improving their efficiency, can greatly support investment, expansion, and diversification strategies. McKinsey has listed enhancing working capital management as one of the three key focuses of artificial intelligence investment, alongside predictive cash flow forecasting and identifying growth priorities and acquisition targets.

Secondly, natural language based tools and the ability to generate comprehensive financial scenarios are changing the rules of the game. For example, these tools can be used to ask: "How can we ensure that the board of directors has $750 million for acquisitions or R&D investments in the second half of this year? Which three scenarios can ensure that we achieve $500 million in free cash flow in the fourth quarter of this year?" Combining predictive and generative artificial intelligence can provide necessary analysis and narrative for businesses, providing a clear path to achieving business goals.

In addition, fraud detection is also an important application area. With the popularity of electronic payments and the complexity of supply chains, the threat of fraud is increasing. Artificial intelligence can detect abnormal patterns from large amounts of transaction data, significantly reducing the risk of false rejection of legitimate transactions and improving the accuracy of fraudulent payment detection. Automation is also an area that requires significant improvement. In the future, payment systems driven by artificial intelligence will pursue complete autonomy, from predicting future payment behavior patterns, to automatically initiating dispute management to address unpaid situations, and then to automatically reconciling accounts.

Of course, technology itself is not the only factor that brings differences, the key lies in how to combine technology, financial partners, and effective processes. Artificial intelligence tools can only be maximally effective in the hands of teams that understand how to use them and have effective processes. In addition, they also need to have access to a wide range of internal and external data. Whether it's benchmarking with industry peers, risk modeling, or analyzing supplier behavior to optimize payments, the ability of artificial intelligence tools to absorb and analyze large amounts of data and generate various forms of scenarios enables users to take action faster, improving cost-effectiveness and insights.

Overall, for many enterprises, the most effective and least risky investment strategy is to invest in platforms and technological tools that already integrate artificial intelligence capabilities and have the ability to leverage these capabilities. There is no doubt that every enterprise has enormous potential, and those enterprises that dare to take strategic risks in technology investment have begun to reap results.