Dive Brief:
- Nearly all (98%) of CFOs responding to a recent McKinsey survey said their departments have invested in automation technologies like artificial intelligence in the past 12 months, but many reported low rates of digitization across the finance function so far, according to a report on the findings.
- In response to a question about the status of their digital transformation journey, the largest number of finance chiefs (41%) said that just one-quarter or less of their processes were automated. Just one in five CFOs are using generative AI tools in particular, and nearly half of those efforts are still in the pilot and experimentation phase, the report said.
- “Despite all the talk around GenAI, the data doesn’t show that finance is adopting it in a big way,” Ankur Agrawal, a partner in McKinsey’s corporate finance practice, said in an interview. “I expect that pace to accelerate in the next couple of years.”
Dive Insight:
The automation of financial processes can help reduce manual errors and improve business visibility, among other potential benefits, Sam Levy, senior vice president of growth and operations at Oracle NetSuite, said in a February article published by Financial Executives International, an association of finance professionals.
“As finance teams face ongoing accountant talent shortages, automating time consuming manual processes can improve overall business productivity and help to attract and retain employees,” Levy said.
Interest around GenAI-driven automation in particular is growing rapidly in the business community, with Gartner projecting that more than 80% of enterprises will have used some form of the technology by 2026.
Still, many CFOs are currently wrestling with a host of risks and challenges associated with GenAI as they weigh potential investments, according to a Deloitte survey released in March.
Close to two-thirds (62%) of CFOs said they anticipated an allocation of less than 1% of their organization’s budget for generative AI next year, Deloitte found. Thirty-seven expected between 1% and 10% of their 2025 budget to be earmarked for GenAI, while only 1% of CFOs expected an allocation of 10% to 25%.
“By taking a cautious approach to GenAI, CFOs may be waiting to see what the technology can do for their business before they commit precious time and money,” Steve Gallucci, global and U.S. CFO Program leader at Deloitte, said in a report on the findings.
Finance leaders responding to a question about top barriers to GenAI deployment within the finance function in particular cited technical skill gaps, adoption risks, and culture and trust issues, among other concerns, the Deloitte study found.
When asked in the McKinsey survey about roadblocks to creating value from data and technology, CFOs reported that their teams face already-demanding workloads, a lack of relevant capabilities, and insufficient resources.
“For all the benefits that digital technology — and gen AI, specifically — can bring to finance organizations, the survey suggests that many of them have room to improve their implementation and use of tech,” the report said.
