Future of Finance: Humans and Machines Unite

Human minds alone are no longer a match for addressing business risk. But neither are machines alone.
Eric DowdellApril 30, 2018
Future of Finance: Humans and Machines Unite

Today, it seems you can’t go even a few days without hearing about the exciting — and also disruptive — implications of emerging technologies and advanced use cases for data and analytics. For finance leaders in particular, the promises of new developments in machine learning, predictive analytics, and automation seem endless.

Eric Dowdell

A new white paper from Accenture highlights some of the impending promise. “In the Finance 2020 organization, humans and machines will join forces to rapidly multiply finance’s clout with the business,” the paper says.

It seems at once incredibly exciting and a tall order for finance professionals to become cool (or frightening?) cyborgs — modern bot-humans simultaneously reporting on the past and predicting the future, leading their organizations with a robotic strength that’s the stuff of science fiction.

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When we read about human ingenuity and decision-making being overruled by data-digesting machines, perhaps it’s not quite Kurt Vonnegut, but it can be uncomfortable. For finance teams, blood, sweat and tears are often involved in driving companies’ analytical decisions. I imagine it is at least somewhat disconcerting to some to relinquish decisions to bots and Big Data.

Yet, we now have the ability to combine human ingenuity with the benefits that machines bring — artificial and natural intelligences uniting. At the same time, the nature of business risk is shifting and expanding on an almost daily basis. Human minds alone are no longer a match for risk.

But neither are machines alone. The two must work together.

Much current research points to the resource constraints faced by today’s finance leaders. They’re asked to do more with less, even though the nature and types of risks seen in today’s business climate are unprecedented.

It seems that many organizations are jumping on board with modern analytical methods, at least in theory. In the Oxford Economics study “How Finance Leadership Pays Off,” sponsored by SAP, 73% of surveyed finance leaders said they believe automation is improving their function’s efficiency and giving employees more bandwidth for value-added tasks.

The modern CFO seems poised to take on the strategic promises of new technologies, but whether such enthusiasm is trickling down into the organization remains to be seen. In a 2017 Forrester Research study of CFOs commissioned by Dun & Bradstreet, roughly a third of participants identified disparate data, organizational silos, and lack of data integration as barriers to creating a data-driven operating model.

Alarmingly, the same study also found that 49% of companies are still using spreadsheets as a primary or “extensive” mode of insight. Trailing behind were more advanced analytical methods such as performance analytics (42% of companies used primarily or extensively), machine learning (28%), predictive analytics (28%), and artificial intelligence (19%).

Dun & Bradstreet’s 2017 Enterprise Analytics study corroborated these findings, reporting that 40% of companies surveyed are still using basic technology like dashboards and spreadsheets for analysis and reporting.

Making the transformation to a data-and-insights-driven organization isn’t easy. And don’t get me wrong. I love a good spreadsheet as much as the next leader. But we can’t escape from the fact that most companies have an overabundance of data yet do a poor job of leveraging it for insights. So, although there is clearly a will to adopt these modern best practices, there still seems to be a gap in realizing their promises.

Three Emerging Roles for Finance in a New Era of Risk

My hope is that modern developments in analytics and technology for finance will help finance leaders bring more of their humanity to work, not less. But this requires an evolution in thinking, and arguably in skills as well.

To truly implement modern technologies successfully, here are three emerging roles for finance leaders that I believe are foundational to achieving human-machine transformation:

The Intrapreneur: This may seem like a skill that finance professionals have built-in. Highly analytical and detail-oriented, they bring a natural facility for data to their roles. Yet, because of the rapidly changing and expanding sources, types, and nuances of managing data, becoming familiar with and communicating data-driven insights is getting both much harder and more essential.

A modern finance leader’s ability to not only understand and interpret this data, but also to bring forward opportunity areas to the greater organization to use the data in value-oriented ways, is a skill sure to increase in value over time.

The Change Agent: Finance leaders pride themselves on their logical and numerically driven decisions, but that quality can quickly become a handicap in the midst of evolving risk.

“While finance must always maintain rigor and discipline around costs, cash and compliance, in the digital world, finance and business experimentation are not an odd couple,” the Accenture study says.

Finance professionals often know more about the inner workings of an organization than any other team. Bringing innovative solutions to the table with the knowledge that finance leaders possess is often invaluable in setting strategic direction.

From influencing investment opportunities in technology, to improving customer experiences, to setting the path forward for how data is used within a company, finance leaders have multiple opportunities to lead the charge in creating positive and needed change.

The Sage: From economic volatility to reputational risk, the future of risk management is highly dependent on rapidly analyzing and making sense of the data at our disposal to make the best decisions.

Increasingly, this must occur real-time rather than analyzed and discussed on a yearly basis. Because risk management is becoming less about programmatically addressing the past and more about dynamically interpreting the future, modern finance leaders must embrace the knowledge they don’t have, the data they haven’t analyzed yet, and the possibilities that may impact their businesses.

They must then bring the rest of the organization on a journey to understand what may happen in the future.

Embracing Gray

The days of black and white are over for businesses. Modern finance leaders who embrace the color gray, I would argue, are the keys to helping their organizations implement truly modern decision-making models to manage risk and drive profitable growth.

By embracing gray in a historically black-and-white profession, they bring the best of themselves and the best of modern technologies to manage risk and drive growth for their businesses.

Eric Dowdell is global head of trade credit business at Dun & Bradstreet.