CFOs gain prominence with generative AI

Artificial intelligence and, in particular, generative AI is not just another disruptive technology.

Oliver Thansan
Oliver Thansan
14 May 2024 Tuesday 10:29
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CFOs gain prominence with generative AI

Artificial intelligence and, in particular, generative AI is not just another disruptive technology. It is a new paradigm that also impacts the financial departments of companies. Thanks to these tools, financial directors (CFO) stop being the mere guardians of companies' accounts to elevate their role to a more strategic and proactive position. They become, therefore, a key player in decision-making, the right hand of the general director.

This was the unanimous conclusion of experts and CFOs brought together by La Vanguardia and EY to discuss the impact of GenAI on the role of financial directors. The Dinero Dialogues round table included the participation of Belén Villasante, financial strategic consulting partner at EY Emeia (Europe, Middle East, India and Africa); Eloy González, EY audit partner responsible for audit innovation in Spain; Gregorio Oliveira, Chief Financial Officer (CFO) of the pharmaceutical company Novartis; Marc Cos, CFO of Cobega; and Isaac Cabezas, CFO of Paack.

For some time now, the most traditional AI tools have been used systematically in the finance departments of companies, whether to make projections or a decision tree, but with generative AI a great qualitative leap is made. The takeoff of this technology is now occurring due to a confluence of factors, as Villasante explained. The first is the computational capacity that currently exists and the unprecedented speed at which it is advancing. The second, the high learning capacity of these models, together with the fact that a natural language is used, which makes it accessible to anyone. And the third, the volume of financing it is receiving. “When humans focus on something, the results are enormous,” said Villasante.

In this sense, González pointed out that, according to estimates, in 2025 the volume of global investment in AI will reach 200 billion dollars. And, when it comes to investing, also in AI technologies, the CFO has a crucial role. “The allocation of resources to those investments that generate greater added value and a greater return on investment is its critical role,” González recalled. The CFO continued. It has a central role in the adoption of generative AI, as it has already had in the entire wave of digitalization.

But the role of financial directors is not only reinforced by this decision when investing in one technology or another. “In addition to exercising his traditional role, the board is asking the financial director to, if we are facing a disruption, take the lead and be a driver of corporate transformation,” said Villasante. “We are more than just those who provide numbers, information and compliance,” defended the strategic financial consulting partner at EY Emeia, after ensuring that the role of the CFO has been evolving for years towards a more transversal figure. “This technology represents a tailwind to something that was already happening,” she concluded, echoing the sentiments of the rest of the speakers.

“Due to the amount of information he handles, the CFO will have a more strategic role and his figure will be increasingly associated with general management,” said Cos, while the manager of the transport and parcel company Paack was convinced that AI will help financial teams be more effective, efficient, and make strategic decisions. “Our role will go beyond annual accounts or cost control,” he added. The speakers agreed that the use of generative AI tools will mean an increase in human productivity and an improvement in services which, as Oliveira stressed, must serve to boost sales, to promote business growth. In his opinion, this is where the great potential lies, which forces CFOs to be more proactive, also in risk control.

They also agreed to highlight that the use of these new technologies can make a difference between companies, becoming a first-level competitive advantage. “You have to get on that bandwagon or in the end the market will expel you,” said the CFO of Cobega. Also, as Cabezas pointed out, the ability to be able to analyze a lot of data in real time leads to making better decisions. “And if you make a better decision than your competition, you will be better positioned,” he emphasized, adding that it is not only technology that can give that differential factor, but also how it is implemented, how it is used and how the teams adapt. to her.

With easy but different interaction, generative AI forces teams to learn and re-educate so that they get the most out of these technologies. And there, González stressed, CFOs have a lot to say in their teams, but also in the teams of other departments. “We will have fewer people who are vertical experts and more people with a transversal curiosity. Pushing this curiosity is going to be the great upskill that we are going to have to generate,” stated the Novartis CFO. “The more correct and meaningful questions we ask, the more and better the machine learns and, therefore, the better results are obtained,” he added. In this sense, Oliveira recalled that Novartis decided seven years ago to invest heavily in AI with a team of 50 data specialists in Barcelona and, thanks to the accumulated experience, he was convinced that “there is room for the use of artificial intelligence and space for human intelligence.” The latter, he said, in line with identifying movements that are out of the ordinary. Criterion, knowledge and intuition mark the differential value of personnel in the finance area, all participants agreed. “There is no technology that today surpasses that,” said Villasante.

pants. “There is no technology that today surpasses that,” said Villasante. Taking the gauntlet of Oliveira's statement about the need to have people with transversal curiosity, the EY audit partner advocated taking advantage of this wave “so that financial teams also enter a culture of promoting innovation” and that culture “rooted throughout the company.”

“AI tools are a new member of the team, with different skills, which allow us to be more creative, explore new horizons,” Villasante maintained. In his opinion, with the massive adoption of these tools, with the automation that entails, much of the work will be done by a technological assistant. “And that forces us to do different things, to leave our comfort zone,” he reflected, but not before recognizing that this can generate fear and resistance in some professionals.

For his part, Cabezas assured that it is not only about learning and improving the capabilities of employees, but that we are facing “an organizational and functional change.” The finance area, all the speakers agreed, must have an absolute vision of the business. And that, added the Paack manager, does not mean being a merely accounting team, but rather integrating systems and data management.

At this point, the speakers also addressed talent management. After pointing out that no matter how many tools are made available, the essential thing is to have robust knowledge in finance to make good use of these technologies, Cos said that the new generations that are joining the labor market are going to be very useful, because They are more accustomed to new technologies, but he warned that this competition is of no use if they do not have robust knowledge in finance. González elaborated on this issue to warn that it is at more senior levels where a knowledge gap can be generated. For those people who have been providing value in financial departments for a long time, it is necessary to facilitate their updating in technological matters to minimize this gap, he defended.

Although everyone recognized that generative AI is in its early stages, they were convinced that it represents more of an opportunity, with great potential yet to be explored, than a threat. Although the threats, they acknowledged, are there. Among them, data reliability and security stood out. “The quality of the data is essential. Insight depends directly on this quality,” said Villasante, before pointing out that there are already companies that are creating work groups, combining humans with algorithms, which are responsible for creating the best possible data. “Not everything that GenAI uploads or gives us is reliable,” Cabezas said. Oliveira expressed himself along similar lines. “If I think about ChatGPT, my 13-year-old son is feeding the tool with his knowledge. So, what is the knowledge? ”He reflected, to highlight the need to have quality information because it will be from this information that important decisions will be made for the future. “AI needs data, but AI techniques can be used to improve data. It is a virtuous circle,” Villasante added.

Cybersecurity risks were also weighed when handling confidential data. “What is the scope of data management?” asked Cabezas, who assured that you can have a tool that works with internal data, but you can also use a public tool, which is continuously fed, sharing information “very confidential". “It's something sensitive,” he said, in line with what González expressed. “You have to ensure that governance structures are created so that the data is protected, that it cannot be accessible to anyone, and then it is data that can be trusted,” stated the EY audit partner. Following this reflection, he added that in the future there will be many regulations that regulate AI, data, its use and also biases. And there, again, the figure of the CFO gains prominence because, according to what he said, he will be in charge of ensuring compliance with that regulation that is to come.