AI Is Transforming Finance, But It Won’t Replace You

Whenever there’s a new breakthrough in AI, finance professionals can start to feel a little nervous. Digital transformation has had a powerful effect in recent years on how we work, eliminating repetitive tasks from our workflows and helping to improve productivity, profitability, and workplace turnover. This leads many to wonder: Will AI eliminate the need for finance professionals?

While I respect and understand these fears, I also believe they’re unfounded. The profession is changing, as it always has, but it’s now changing in ways that benefit humans, not machines. In the future, well-trained AI may be able to take on some tasks, but situations where human interaction and sound judgment are needed will still be crucial. AI will be a major part of the lives of finance professionals over the coming years, but you won’t necessarily find yourself competing against robots in the job market.

Instead, you’ll need to develop your skills and learn how to leverage new technology to advance your career. But before we talk about that, let’s dive deeper into the relationship between AI and finance.

AI WON’T TAKE YOUR JOB

Computers can flawlessly execute billions of mathematical calculations per second. That’s why machine learning plays such a vital role in automated stock market trading. Humans need time to spot patterns in market data to place trades, but an algorithm can identify those patterns in a fraction of a second and immediately place an appropriate buy or sell order.

If being a finance professional was all about crunching numbers, advanced technology might indeed replace you. But that’s far from the truth. You bring a lot more than that to the table.

• Empathy: You understand customer needs and motivations and know what questions to ask in a conversation.
• Strategy: You understand how your choices support your client’s or your organization’s goals.
• Ethics: You know if a decision is compliant with your company’s values or if it breaches regulations.
• Intuition: Have you ever been in a meeting with a client, sensed that something wasn’t quite right, and called them later to gauge their concerns? A computer couldn’t do that.
• Leadership: A computer can be fast and efficient but not agile or decisive. Those are human qualities, and if you hold or aspire to a managerial position, you’ll need them in spades.

Every company will still need financial professionals, no matter what happens next in AI.

WHAT ROLE WILL AI PLAY?

Of course, the expansion of AI will have far-reaching consequences for the financial industry. We see this happening already in many areas.

• Fraud detection: AI is excellent at detecting unusual patterns in data. This can be used to stop all kinds of fraud, from money laundering to hacked bank accounts. AI is also the backbone of most cybersecurity systems.
• Compliance: Internal controls are a headache for companies, with compliance costs increasing each year. AI can help automate these controls, reducing costs and eliminating paperwork.
• Analysis: Sophisticated AI models will be able to model data in unexpected ways, providing valuable insights for decision makers.
• Customer self-service: Chatbots allow clients to perform complex tasks by themselves, such as rebalancing their portfolios. This service can reduce the workload for some finance teams.
• Credit decisions: AI can quickly evaluate a potential customer’s credit worthiness based on data. Also, machines aren’t biased, mitigating the risk that a customer might be discriminated against on the basis of race, gender, age, or other factors.

None of these tasks can be executed without human supervision. Increasingly, people and machines will work together in a partnership known as symbiotic computing. For example, imagine AI constantly analyzing market data and client portfolios. This AI can prepare reports and issue alerts, but a human finance professional will still be responsible for the overarching strategy.

PREPARE FOR THE FUTURE

Finance professionals will always be in demand. But as AI develops, you may find that employers are eager to hire people who know how to make the most of this technology. Here are a few ways you can keep your skills current and relevant (for more on preparing for new job opportunities, see “Career Changes and the Pandemic,” Strategic Finance, January 2021.

• Ask for mentoring: If your employer is a tech-first company, ask your manager to help you develop your IT skills. Most companies will be delighted to support anyone who wants to engage with new technology.
• Volunteer for projects: Hands-on experience is the best way to stay ahead of the curve, so make sure you’re involved in any exciting new projects such as limited rollouts of new platforms.
• Follow industry news: Publications covering the field of finance will often give you a heads-up on how technology is changing roles like yours. It’s also a good idea to keep an eye on internet forums and to join discussion groups on Reddit and LinkedIn.
• Try out demos: Lots of software-as-a-service platforms will offer a free demo of their product to anyone who wants to take a look. If there’s an interesting new AI platform on the market, go check it out for yourself.
• Embrace change: When companies roll out new systems, they often face internal resistance that can slow down adoption. Don’t be that person. Help your team and impress your supervisors by welcoming new technology and being the first to try it out.

AI will eventually become a tool finance professionals can’t live without. But it will remain just that: a tool. Learn how to wield it properly, and it won’t be a machine eventually replacing your boss, it’ll be you.