How CFOs see the future of artificial intelligence in finance and strategy

Authored by Heidrick & Struggles and 麦肯锡 : Giulia Iuticone , Susie Clements , Cristina Catania , Andrea Tricoli , Enrico Muti , Davide Grande .

Artificial intelligence is a pressing topic for CFOs as they consider the impacts of the technology on the finance function – alongside their own role in implementing it across the organisation. Indeed, it was undeniably the hottest topic this year at the World Economic Forum. Optimism about AI outweighed risks in general, and, as a firm, we note that we remain particularly busy in our client work through our AI, Data & Analytics Practice across all industries and in bringing in consultants via our On-Demand Talent team to help organisations assess their AI readiness and jumpstart their AI strategy. CFOs and leadership teams remain keen to understand where the competitive advantage lies; what implementation looks like; and perhaps most pressingly, the talent they need to integrate AI, and where they are going to find it.

Responding to these issues, cross-industry CFOs met at an invitational event in Rome, co-hosted by Heidrick & Struggles and McKinsey & Company, to discuss the ownership of AI strategy within their organisations, its potential finance function use cases and the current skills challenge.?

Clearer ownership for AI

CFOs are already recognising the advantages of AI’s problem-solving and decision-making applications within the finance function. A survey of financial officers across the world by Heidrick showed that 68% are currently using AI for at least one activity, with 92% expecting to employ it in some form within two years. But despite this, only 11% of CFOs surveyed have ownership of the AI strategy within their organisation – with 20% believing there is no owner at all.

The matter of ownership is muddied by the range of possible implementations of generative AI. “Different functions of the organisation make different uses of GenAI, and some are more advanced than others due to the drive of individual managers,” said one CFO at the event. “Where ownership lies depends on the business itself,” pointed out another. “In my organisation, any strategic topic that arises across functions is eventually escalated to the executive level.”

AI in the finance function

“I see great potential for AI applications in FP&A, strategic planning and budgeting,” said one event attendee. “I would say that Finance is the area with the biggest potential.” And potential is the operative word. Among the Financial Officers surveyed by Heidrick, only 12% currently use AI in audit; 17% in accounting and reporting; and 12% in FP&A. Projected usage two years into the future sees those figures rocket, with 69% in accounting and reporting, 44% in audit, and 50% in FP&A – a substantial increase on the current figures.

The range of uses for the finance function goes far beyond accounting and audit, of course. Shareholder management can be facilitated by GenAI, with initial drafts of internal and external financial reports being generated by the technology. AI can also to be used to extract information from complex documents, enabling automation of invoice and contract matching to detect potential discrepancies.

While the internal finance applications of AI dominated discussions, one attendee pointed out that the CFO role is also impacted by how external parties use it, describing the fallout of a press release about their company’s guidance on turnover. “It generated a stronger-than-expected impact on our stock price because press releases are being read by artificial intelligence rather than people. We are now talking to machines, and the way we communicate financial information must be adapted accordingly.”

The talent quotient

Whatever the use case, attendees were united in the belief that talent is the key to implementing AI. “To upgrade finance teams and enable digital adoption, you need people who can interpret data strategically; have interpersonal skills and drive influence; and who are able to understand and embrace technology and bring it into the finance function,” summed up Heidrick’s Susie Clements.

But there is a general paucity of talent in the space, with 39% of financial officers saying there are too few people with AI expertise available at every level. Almost half (45%) said their company’s strategy for accessing that expertise was founded on collaboration with external technology partners and vendors.

To implement AI effectively, CFOs need to build a cross-functional team with technology, business and analytical skills. “Bring in people with business and leadership skills first, who will be capable of interacting with technical experts,” advised Heidrick & Struggles. “And there are other ways to fill in technical talent, such as training select finance people in data science and analytics.”

Heidrick & Struggles also highlighted the need for tech saviours who can work as reverse mentors for members of the finance team. “Technology is evolving very fast,” added another attendee. “We need to create a learning organisation where we stimulate discussions on how to use these technologies, involving both young and mature generations. Continuous-learning organisations are those where the status quo is constantly challenged to evolve.”

The CFO as AI lead

There is clear argument for the CFO to be at the vanguard of implementing AI across the organisation: they are responsible for resource allocation, and implementing these technologies at scale requires substantial investment.

Leadership roles within this space are evolving rapidly, and the CFO needs to approach AI with more than a financial perspective. As an enterprise-wide leader, and second in command to the CEO, the CFO also has a part to play in making sure the AI strategy is consistent with the business strategy and purpose, that it is being ethically used, complies with legal requirements, and that security, privacy and bias risks are being managed.

With 42% of respondents to Heidrick’s AI and financial officers survey saying they are not yet sure how to do these things, the CFO learning curve looks steep yet exciting.