The intelligent automation revolution has arrived. According to a recent report from McKinsey & Co, this is the third wave of digitization and generative AI, in which businesses can add new unstructured content to analytical AI’s structured data capabilities. This means we see massive productivity gains for businesses, especially regarding their finance operations.
For the CFO and their teams, there is a wealth of opportunity here, but also not inconsiderable risk. The best CFOs are masters of balancing risk with opportunity; those who can do it well right now have an immense opportunity to write a new playbook for AI leadership. That’s because effective AI strategies involve more than just tools. They require a strong sense of where the business value lies and a keen sense for ensuring every technology investment has a clear return for the business — all things savvy CFOs have in abundance.
Two areas that stand out are payments and cash flow management. Recent research from Gartner compared organizations it saw as leading the way with successful AI strategies and implementations with their competitors. The study revealed that 46% of organizations with the most successful AI implementations leverage AI in customer payment forecasting, illustrating the vast potential for AI in this space.
But it’s not just about forecasting accuracy. It has been estimated that as much as $44 trillion is locked in global supply chains at any time. Accessing these funds, or at least ensuring they are working as efficiently as they can for you, can go a long way in helping you invest, expand, or diversify. McKinsey ranks enhanced working capital management as one of the top three areas for AI investment, alongside predictive cash flow forecasting and growth prioritization/M&A targets.
The real game-changer is the natural language-based tools and the capabilities to generate thorough financial scenarios. For example, you could ask, “What are my options to ensure the Board has the $750 million needed to make that acquisition or R&D investment in the year’s second half? What are the three best scenarios to ensure we achieve a free cash flow of $500 million in Q4 of this year?”
Assuming you have the data, the combination of predictive and generative AI will give you the analysis you need and the narrative to provide a clear pathway to your business goal.
Another opportunity is around fraud detection. Electronic payments are standard in many countries and supply chains are increasingly complex, which means the threat of fraud is increasing. AI can detect unusual patterns from typical transaction profiles, minimizing the rejection of legitimate transactions and maximizing the accuracy of fraudulent payments.
Automation is also an area that is ripe for significant leveling up. The future of payments powered by AI strives for complete autonomy, from predicting future incoming payments based on behavioral patterns to independently initiating dispute management in the event of non-payment to automated incoming payment reconciliations.
When we talk about AI’s transformative abilities, the most significant benefit is its ability to support continuous optimization. Whether it’s benchmarking against industry peers, risk modeling, or analyzing supplier behavior to optimize payment, the ability of AI tools to absorb and analyze vast amounts of data and generate scenarios in a multitude of forms gives you the power to act faster, with greater cost efficiency and insight.
Of course, it’s not just the technology that delivers the difference; it’s the combination of technology, financing partners, and processes. AI tools are most effective in the hands of a team that understands how to use them and has the processes in place to enable them to be used effectively. They also require access to vast amounts of data, internal and external.
For many businesses, the most effective and least risky investment is in platforms and technology tools that already have AI capabilities built in and in the people who know how to leverage them.
There is no doubt that the potential for everyone is significant. The early evidence suggests that those who have taken the plunge and are investing strategically are already reaping the benefits.
It points to a future full of incredible opportunities ahead and we are really excited about it!
Scott Russell is chief revenue officer and a member of the Executive Board of SAP SE.
Cedric Bru is CEO of Taulia.
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