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Finance executives in 2023 will have an abundance of resources at their disposal to help them run their organisations. With AI-generative technology now emerging onto the list, the developing technology provided by chatbots, which operates on billions of data points, based its output on more information than any individual could ever hope for. This, along with a workforce shortage, has prompted numerous groups to consider how generative AI can complement lagging job markets.
Even in the CFO function, where demand for interim CFOs has more than doubled, adoption and practical application remain challenging. The complete scope of a CFO's responsibilities is still much above the capability of any easily available combination of technology.
The following are six aspects of the CFO function that no technology can completely replace. The human aspect offered by a person's personality and job experience continues to distinguish the finest from the rest.
#1 Financial Decisions-making
While new technological advancements such as AI can provide valuable insights on data sets and process improvements, decision-making entails weighing factors other than data. These variables include recognising the executive team's organisational goals, making judgements based on prior experience, measuring stakeholder engagement, and understanding an organization's risk tolerance.
These multiple, sophisticated procedures can be aided by technology, but they are ultimately dependent on the executive's leadership style, skill set, and work experience.
#2 Values, Ethics, and Culture
CFOs are responsible for ensuring that their organization's financial goals and allocations are consistent with the company's ethics, morality, and values. Priorities such as providing staff perks to encourage wellbeing, organising company-sponsored events and happy hours to create camaraderie, and choosing charity or different ways the organisation are all components of a company's ethics and culture plan.
Unlike AI, the CFO function necessitates making decisions based on knowledge of the organization's culture, stakeholders, and regulatory needs. Although AI can help identify potential ethical risks and violations, it cannot make ethical or moral decisions on the organization's behalf.
#3 Creativity and Innovation
This is one of the list's most human-centered features. A person who has strong ideas, is able to convey them, and is clear on how their ideas should be developed out is one of the most useful members of any team. Leadership, particularly CFOs, must always innovate in order to generate value for the organisation. While AI can assist in the generation of insights and ideas, it cannot replace the creative thinking and problem-solving skills required for all levels of innovation.
#4 Leadership and Communication
The finest CFOs are excellent communicators, whether with workers, investors, their staff, or the CEO. A significant attribute is the ability to translate financial information into easily understood formats for various stakeholders.
While AI can assist in the automation of some of these tasks, it cannot replace the interpersonal communication skills and emotional intelligence required for top-tier leadership and communications. Building and sustaining good relationships involves human abilities such as empathy, trust, and the capacity to cooperate and exchange ideas, which AI cannot completely replicate.
#5 Regulatory Adherence
While AI and other forms of fintech can aid in the automation of compliance tasks, they cannot replace the human expertise and judgement required to assess and stay current on the latest compliance standards.
Any CFO who is ready to entrust their organization's compliance adherence completely on technology may be placing themselves in jeopardy. If an error occurs, few CFOs will be able to avoid a severe regulatory issue or error by blaming ChatGPT or comparable technologies.
#6 Risk Management and Tolerance
While generative AI can assist in the identification of risk, it cannot yet replace the experience and expertise that CFOs have in evaluating mitigation solutions. While AI tools allow a company to collect and analyse historical data, assessing future risk still requires the CFO's input to define the necessary parameters.
Furthermore, AI like ChatGPT will be limited in how frequently data sets are updated, so current economic and global events may not yet be reflected in its analysis. Finance executives continue to have an edge in judging real-time developments and rapidly repositioning their organisations.