71% of organizations use AI in their financial operations
- 57% of executives say the return on investment exceeds their expectations, compared to 29% of others.
- Financial reporting is the most common area of use, but it is expanding to include cash management, risk management and taxation.
- Nearly three-quarters of executives have developed principles and guidelines for the responsible use of AI.
HONG KONG SAR – Media OutReach Newswire – December 4, 2024 – New research from KPMG International reveals the considerable scale with which artificial intelligence (AI) is being deployed in the financial operations of organizations – with compelling levels of ROI and a wide range of benefits, including better data and decisions, faster information and reporting, reduced costs and greater operational efficiency. The KPMG report reveals that organizations are making the most of machine learning, deep learning and generative AI and that the ROI of these technologies meets or exceeds expectations.
The research, published in the KPMG Global Report on AI in Financecovered 2,900 organizations in 23 countries and built on research conducted earlier this year with 1,800 organizations in 10 countries. A maturity framework was created to assess respondents into three AI readiness groups: 24% of organizations qualified as leaders, while 58% were intermediate implementers and 18% were beginners. KPMG has also developed a AI Maturity Benchmarking Tool designed to help organizations assess their progress on the AI transformation journey.
AI Deployment Grows, AI Generation Is a Key Future Priority
71% of organizations use AI to some extent in their financial operations. Currently, 41% of them use AI to a moderate or significant degree – and this figure is expected to rise to 83% in the next three years. Just six months after the first wave of research, the spread of AI is already visible. While in April 2024, 40% of organizations in the original 10 countries were using traditional AI in their financial operations to a moderate or significant extent, this figure has increased to 45%.
The use of Gen AI has also grown. The percentage of companies that have no plans to use Gen AI has now fallen from 6% to just 1%. Generation AI has become a top priority for the future, with 95% of executives and 39% of others expecting to selectively or broadly adopt it in financial reporting over the next three years.
Adoption everywhere
KPMG’s research also highlights the extent to which AI is used around the world. While American, German and Japanese companies are well ahead in the use of AI, other major economies, such as Italy and Spain, are lagging behind. The same dichotomy is evident in emerging markets, with China and India leading in the use of AI, and Saudi Arabia and African countries further behind.
Adam Scriven, Head of Financial Transformation, Hong Kong at KPMG Chinasaid: “Developing AI capabilities has become an imperative for CFOs and finance functions in the digital age. It is essential to recognize that AI is a capability and not a technological product. We all need to embark on the AI journey, learn and develop better capabilities. KPMG helps clients build the right foundation of data and systems, modeling and analytics to harness the power of AI. KPMG also co-creates AI solutions with clients to help them build their capabilities and move forward together on this path.
Alan Yau, Head of Audit Innovation at KPMG Chinasays: “AI in financial reporting is transforming the industry with improved accuracy, efficiency and real-time insights. As a megatrend, AI enables predictive analytics and data-driven decisions. Talent development and retention are crucial in this evolution. Organizations must prioritize continuing education to equip their workforce with AI skills, driving innovation and adaptability, to drive sustainable growth and maintain a competitive edge in the market.
The use of AI extends across finance
Businesses are turning to AI in all areas of corporate finance. Financial reporting is the most common area of use, with almost two-thirds of companies testing or using AI for reporting, accounting and financial planning. But other areas are following suit: almost half of companies are now testing or using AI for treasury and risk management. This can drive better debt management, cash flow forecasting, fraud detection, credit risk assessment and scenario analysis in treasury and risk management functions. Tax management, however, is a little further behind. Less than a third of companies are testing or using AI in this area, although around half are in the planning stage.
Leaders move forward
Executives are leading the way, with more than three times as many executives (87%) as others (27%) using AI in finance to a moderate or significant degree. Leaders are moving quickly and have developed an average of six AI use cases, nearly double the number, among others. The main areas of use are data research and analysis (85%), fraud detection and prevention (81%), predictive analysis and planning (78%), and the use of Gen AI to compose documents and other content (75%).
Common barriers all businesses face include data security vulnerabilities (57%), limited AI skills and knowledge (53%), consistent data collection (48%), and costs (45%). ) – but leaders are better able to overcome them through the stages. they took. Their main obstacles are becoming more complex, such as integrating AI solutions with existing tools and overcoming any residual staff resistance.
Reap the benefits and get a return on investment
As the use of AI in finance grows, the dividends multiply. Initially, finance teams report two to three benefits. By the time they become leaders, that number is seven.
Just as the benefits of AI can increase with its use, so does the potential return on investment. As a result, 57% of executives say ROI not only meets their expectations, but exceeds them. Even among less advanced users, nearly a third (29%) say the same.
Stanley Sum, Head of Digital Activation at KPMG Chinasays: “AI is reshaping the finance function, opening the door to potential opportunities and challenges. Therefore, strong AI governance not only helps meet regulatory requirements, but is also an essential element. KPMG supports its clients in their risk management approach, by promoting transparency and the ethical use of AI in governance. By implementing conscious supervision now, we are helping to safeguard the future of finance.
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About KPMG China
KPMG China has offices located in 31 cities with more than 14,000 partners and collaborators, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong , Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. By working collaboratively across all these offices, KPMG China can effectively deploy experienced professionals wherever our client is located.
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In 1992, KPMG became the first international accounting network to obtain a joint venture license in mainland China. KPMG was also the first among mainland China’s Big Four to transition from a joint venture to a special partnership on August 1, 2012. Additionally, the Hong Kong firm can trace its origins back to 1945. This early commitment to this market, coupled with a constant focus on quality, forms the foundation of the accumulated experience in the sector and is reflected in the appointment of KPMG for multidisciplinary services (including audit, tax and consulting) with some of the most prestigious companies in China.
