Maybe you’ve seen the humorous “I forced a bot…” meme where people purportedly feed thousands of hours of movie or TV show scripts to an automated computer program – and force it to independently spit out its own script that unnervingly stitches together plausible clichés and stereotyped phrases.
In essence, that ability to read, detect patterns, and create new material is how artificial intelligence (AI) works.
Fortunately, of course, we don’t have server farms spewing out hundreds of Adam Sandler comedies each week (though it can feel like that sometimes).
AI is the technology that’s been “right around the corner”… for at least 30 years. Proponents and enthusiasts excitedly tell us that AI can defeat everything from chess opponents and traffic congestion to exotic diseases and financial fraudsters. And, to be sure, AI has achieved some tremendous and important advances in countless areas of arts and sciences.
But you don’t have to be some mega-enterprise operating a fleet of IBM Watson supercomputers in order to put the power of AI to work. In fact, AI just might have greater value to offer mid-market companies.
The power of AI in finance
Businesses have found countless ways to apply the power of AI – and almost all of them boil down to automating a task, and eliminating the need for human intervention to complete it. However, while standard automation simply follows a set of human-defined rules, AI retains more information about the tasks it has completed, and simulates human thinking to make subsequent decisions without any human intervention.
For accountants, AI can relieve some of the number-crunching they do every day. By automating processes through AI, accounting teams can evolve to serve the business in more meaningful ways and take on more strategic roles. That means skipping the tedious tasks (think: transaction data entry) and spending more time on higher value activities for employers and clients.
At an even higher level, machine learning – a popular strain of AI – applies different statistical and learning models to data sets to create different inferences and outputs. Now imagine having the ability to apply this discipline to finance. Sounds great, no?
The major barrier: Building an AI system requires a level of resources – time, talent, and investment capital – that most mid-market companies lack. When mid-market businesses lack those in-house resources to develop AI, it’s often advisable to consult current vendors and evaluate their AI capabilities. What tools do they have? What can those tools accomplish? And if those vendors don’t have AI capabilities, it might be time to look at alternatives.
What AI can do for the mid-market
What can AI do for day-to-day accounting teams? Bill.com, the leader in digital payments, offers a compelling example. It now offers the Intelligent Virtual Assistant (IVA), a powerful, yet simple, AI solution to eliminate tedious and time-consuming manual work that’s still too common in accounting today.
Using this AI solution, finance teams can automate the way they handle invoices and approvals, avoiding the typical lag times that come with manual processes. IVA detects simple human mistakes, such as duplicate invoices, and can suggest rules and workflows based on patterns it uncovers.
A recent study found 77% of consumers preferred paying with a debit or credit card, versus only 12% who favored cash. Artificial intelligence solutions are helping banks and credit lenders make smarter underwriting decisions by utilizing a variety of factors that more accurately assess traditionally underserved borrowers, like millennials, in the credit decision making process.
Underwrite.ai analyzes thousands of data points from credit bureau sources to assess credit risk for consumer and small business loan applicants. The platform acquires portfolio data and applies machine learning tofindpatterns and determine good and bad applications. Underwriter.ai claims it can reduce defaults by 25-50%.
The lesson here: You don’t need to be a tech-centric company to capitalize on the power and value of artificial intelligence. In many instances, tech providers are doing the legwork to provide integrated access to advanced AI capabilities. And that means mid-market accounting teams can be well-positioned to capitalize on breakthrough improvements.
However, even if midmarket leaders choose the right AI tooling for finance, there will be a need for guidance in other areas as well. You’ll need to be able to supply the right (clean) data, ideally from a single source of truth you have already established. There are also data privacy and access issues that need to be worked through. AI, in that sense, piggy backs onto a well-thought cloud and data strategy.
At Sage Intacct, our goal is to empower finance leaders in financial services to integrate data-driven decision-making across an entire organization, transforming the role of finance to forward-thinking analysts and trusted advisors. Learn more by viewing this newly released webinar: AI and the Future of Financial Management.