Using AI in Finance

From spreadsheets and calculators to cloud computing, the accounting and finance industries have long adapted to technology. But for students hoping to advance in financial services, the development of generative artificial intelligence offers both new obstacles and chances.

The disruption of the workforce caused by generative AI was highlighted in a study conducted last year by the investment bank Evercore and the startup incubator Visionary Future. Using data from 160 million US employment, the study finds that while complete job replacement is improbable, service industries like banking and law are particularly vulnerable to disruption from AI.

The report indicates that generative AI is instead anticipated to increase productivity, especially for people in high-value professions that pay more than $100,000 yearly.

The difficulty will be in navigating these changes and determining which talents will be in demand in the future for present students and graduates making less than this threshold.

Accounting and finance are quickly embracing generative AI as it automates some operations. Because it can handle sophisticated activities beyond ordinary automation, Stuart Tait, chief technology officer for tax and legal at KPMG UK, calls it a “game changer for tax.”

According to him, using Gen AI for technical analysis and tax research will result in an efficiency boost comparable to switching from typewriters to word processors. According to Tait, the technologies can provide more than 95% accurate tax answers in a matter of minutes.

These technological advancements provide opportunities as well as challenges for workers, including the possibility of some occupations and talents becoming obsolete. “It will help by automating large portions of manual data entry, saving time and allowing people to focus on more value-added and often more interesting tasks,” says Simon Stephens, AI lead for audit and assurance at Deloitte UK. He recommends that early in their careers, junior employees may take on more sophisticated, perceptive work.

Financial training programs are adapting to these changes by sharpening their focus on artificial intelligence. We certainly need finance education to generate people who are fit for purpose in this new world, says David Shrier, professor of practice in AI and innovation at London’s Imperial College Business School.

For example, HEC Paris already teaches students how to analyze financial data using generative AI. It will soon also be utilized in decision-making. As noted by Evran Örs, academic director of HEC’s Master in International Finance program, the goal is to prepare them for the “possibility that gen-AI will replace spreadsheets.”

In a similar vein, Cambridge Judge Business School in the UK has brought in specialized practitioners and technical courses for its Master of Finance program, which targets individuals with prior job experience. The program’s co-director, Marwa Hammam, points out that all students are now taught the fundamental ideas of machine learning as well as its real-world applications in accounting, auditing, asset management, and trading.

Soft skills like critical thinking, networking, and leadership, however, are becoming more and more crucial for finance professionals, experts say, in addition to technical competencies like data analysis.

The director of Bayes Business School’s MSc in banking and international finance in London, Angela Gallo, emphasizes the continued value of interpersonal skills in an increasingly mechanized industry. Although automation has increased productivity, she claims that occasionally it has come at the expense of customer connections. Those relationships could become more important due to AI.

The executive director of France’s Essec Business School’s Master in Finance, Gérard Despinoy, advises recent graduates in finance to hone their programming abilities, especially in VBA, Java, R, or Python. According to him, becoming proficient in these languages can speed up financial analysis, automate repetitive chores, and facilitate the creation of novel financial solutions.

Through coursework, industry certifications, and online learning environments, students can obtain these abilities. The Association of International Certified Professional Accountants’ Chief Executive of Management Accounting, Andrew Harding, emphasizes the value of lifelong professional development for accounting and finance professionals to remain competitive in a changing job market. According to Harding, these professionals must change their perspective to learn, unlearn, and relearn.

AI integration is also generating new job opportunities and career pathways. Career consultant Marc Chapman of Essec lists positions like AI financial analyst and algorithmic trader as examples of how machine learning may be applied to analyze financial data, forecast market trends, and automate procedures. According to Chapman, there ought to be intriguing job options as banks use digitalization to increase efficiency.

Experts emphasize the value of long-term career planning and being prepared to adjust to technology advancements. Finance students, however, shouldn’t undervalue the fundamentals. According to Harding, accounting and finance professionals’ fundamental skills will continue to be important. AI and other such technologies are instruments, not substitutes, that experts may utilize as effective co-pilots.

In fact, a lot of professionals concur that we should view these technical advancements as chances for development. AI is a long way from automating jobs, as noted by Feng Li, professor and chair of information management at Bayes Business School in London. Those who can use AI to conduct their work more successfully and efficiently will have a bright future.

Source link