Ahmed Fessi, CIO at Medius, discusses the potential of AI in achieving peak financial performance.
One third of European businesses have implemented Artificial Intelligence into their operations, recognizing its potential to enhance productivity, efficiency and motivation.
However, despite AI advancements in data analytics, contract management and internal communications within business functions like HR and IT, 61% of finance functions either have no plans for AI adoption at all or are still in an initial planning phase.
Finance operations remain underserved by automation and AI, despite their potential to mitigate risks such as fraud and poor cash flow management, and to streamline tasks like invoice processing and expense management.
Achieving peak operational efficiency for financial teams and safeguarding against fraud necessitates the integration of automation and AI into finance functions. CIOs must spearhead Digital Transformation efforts within their organisations, prioritizing AI implementation in core financial functions to ensure these initiatives provide the right value for finance teams.
A harsh business climate
In the current business landscape, companies face a myriad of challenges, from navigating uncertain economic conditions to meeting changing customer demands. There’s growing pressure on firms to prevent security breaches, optimize investments, monitor profitability and build flexibility into their business plans.
Notably, 65% of firms say they have to demonstrate return on investment (ROI) for their technology spend faster now. Businesses want faster innovation, and to maximize their investments, so they can achieve more results with less time, money and effort in the long run.
But protecting the financial health of a business and its investments is difficult when the looming threat of fraud is risking annual losses exceeding US$300,000 for compromised businesses. Shockingly, a quarter (25%) of finance executives can’t gauge the extent of the impact of invoice fraud on their businesses. This lack of clarity leaves businesses vulnerable to fraud, especially amidst harsh economic conditions that have led to a surge in insolvencies among European businesses.
Relying on manual financial processes can lead to financial mistakes, an unengaged financial team, and a greater risk of financial fraud and loss. Artificial Intelligence can increase financial control for businesses, fortification against fraud and a more motivated financial team.
For financial teams those administrative tasks remaining manual is like choosing a bike over a super car when automation of these tasks can revolutionise financial functions for Accounts Payable.
Fighting fraud demands increased visibility
Fueled by the rise of generative AI, Dark Web technologies like ‘Fraud GPT’ enable criminals to craft phishing emails that are harder for businesses to identify as genuine or fake at scale. In fact, recently a finance worker was tricked with deepfake AI technology into paying out US$25 million to fraudsters. AI has aided fraudsters in broadening their reach, by helping them to produce the code needed for mass attacks, which are more sophisticated and reaching a wider distribution of potential victims.
Yet, when assessing the risks of enhanced fraud, we must also realise that AI provides a toolkit solving a key part of the problem of financial fraud. Businesses, technology providers and regulators need to make AI their strength if they are to combat fraudsters that are utilising the technology. Automation, when done right, can help businesses in validating important vendor data, anomaly detection and creating visibility in the end-to-end cash flow management. Taking away the manual pressure of noticing unusual activity, controlled AI use could be a hidden defense against financial fraud and level the playing field with AI-enhanced attackers.
AI, a valuable asset for finance teams
Putting innovation and not administration at the forefront for financial staff can be revolutionary for staff productivity and motivation. In fact, Medius research has shown that only three in 10 (37%) financial decision makers would say they and their colleagues are satisfied with their role.
For CIOs looking to support their financial teams, tackle the monotony of the role and encourage productivity with less pressure, AI can be an aid to help trigger key efficiencies in financial management. AI is an assistant for financial teams, aiding them in fraud detection, expense analysis, invoice processing and allowing them to prioritize higher-level human-led work.
With processes like touchless invoicing AI can prepare all the hard work, and details for finance teams, and leave the key decision to approve the invoice with the employees. AI and employees can work together to balance human-led decision making with AI-assisted preparation, saving time, effort while boosting productivity and employee satisfaction.
Supporting financial employees involves providing them with the tools they need to easily complete their tasks, such as an AI workmate to assist with automated Accounts Payable operations. Most businesses need employees in the Accounts Payable team to constantly monitor an accounts email inbox for interactions with suppliers – from monotonous in-bound inquiries to time-intensive and manual processes that drain employee motivation. But Medius’s AI workmate can aid those that approve invoices to meet the needs of suppliers without employees facing monotony, and a constant list of administrative tasks.
AI solutions can even remove the human pressure and risk of manual error associated with detecting fraud. With research showing that in the first half of 2023 alone criminals stole £580 million through fraud, businesses need to prioritise their protection against fraud, or risk debilitating losses. AI-powered fraud detection algorithms that analyse patterns in data and detect anomalies, can build a crucial risk management structure in a business, and prevent both internal and external fraud. These solutions remove the pressure from employees to spot sophisticated fraud schemes themselves. At Medius, our Fraud and Risk Detection Solution uses AI to spot duplicate payments, or fake invoices and alert financial teams to the potential fraud risk.
Stronger defenses against harsher attacks
As businesses continue to battle harsh economic conditions, internal business pressures and a rise in cyberattacks, updating core financial functions shouldn’t be the last priority. When fraud losses could be the difference between insolvency and survival, CIOs need to be ready to tackle increasingly sophisticated fraud attacks with the most advanced defenses and tools in place to increase visibility of cash flow.
No business should be unaware of how much fraud is costing their business. When financial teams are overwhelmed with monotonous administrative tasks, AI can be a crucial helping hand and provide a key opportunity to manage fraud, risk, invoice processing and transform the financial functions underpinning supplier-business relationships.
