CFOs at middle-tier firms are finding abundant uses for artificial intelligence.
Chief financial officers at mid-size companies are akin to Goldilocks when it comes to AI usage, as it turns out “not too hot and not too cold” works out perfectly for their firms.
That after a new study by Citizens Bank that shows 76% of mid-size company CFOs are “already using AI and applying it in various ways.”
Additionally, private equity firms are using AI at an approximately 100% user rate. CFOs in both organizations recognize the “transformative potential of AI technology”, with 99% of survey respondents saying that AI is well on the way to being an “essential tool” for their companies.
“Mid-size companies and private equity firms are increasingly turning to AI technology to automate processes and improve efficiency within their financial operations,” says Beth Johnson, vice chair and chief experience officer at Citizens. “As AI transforms mid-size companies, Citizens is being very thoughtful about how we implement these new tools and guide clients through an evolving technology landscape.”
Why Mid-Size and Private Equity Companies?
Citizens say that it’s CFOs who are driving their companies toward major AI implementations.
“In mid-size companies, CFOs typically lead the way when deciding if the company will use AI,” the study states. “ . . . .This is likely because CFOs across all industries are under pressure to reduce costs, grow revenue and maintain regulatory compliance.”
Company financial officers are also increasingly seen as key business strategists. “The growing role of the CFO makes them uniquely positioned to drive AI implementation,” the report adds.
In terms of usage, CFOs say they’re deploying AI in financial process areas like cash flow forecasting (56% of CFO respondents), financial analysis (55%), and payment automation (48%).
The variety of applications will likely increase, Citizens says.
“In customer support, for example, AI can now analyze transcribed customer conversations to identify common complaints or questions so companies can proactively collect and address those insights,” the report notes.
The survey found that the CFO leads 87% of AI implementations for financial processes. The chief information officer (CIO) comes in a distant second, leading 41% of such efforts. A CFO who leads AI implementations typically partners with their organization’s chief executive officer (CEO) or CIO.
For CFOs who are just getting underway with AI or who are in their early stages of using the technology, Citizens offers the following tips for robust artificial intelligence implementations in 2024:
Actions to consider in 2024 . . . .
— Evaluate potential areas in your company where AI could help drive efficiency.
— Recognize the added responsibilities CFOs take on with AI implementations by providing the necessary resources, including additional training, tools, or personnel.
— Encourage a company culture that embraces exploring AI as a possible tool for improving financial analysis and decision-making. Establish employee development programs for upskilling and ongoing learning to understand, use, and manage AI and AI-driven financial insights.
— Stay informed on AI-related regulations, and encourage in-house counsel and other relevant teams to stay up-to-date on AI legal and ethical issues.
— Collaborate with industry peers on best practices regarding legal and regulatory compliance and potential privacy violations.
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
