Much of the commentary around the development of technologies such as robotics and artificial intelligence centres on the transformation of the workforce. The finance function potentially holds broad applications for these tools.
The development and implementation of 'cognitive technologies' has the capacity to transform everything we do - and might be something for CFOs to consider.
Deloitte's research report, Crunch time III: The CFO's guide to cognitive technology, identifies five cognitive technologies shaping the finance function.
The report says that cognitive technologies do things that are similar to things done by human beings. “They grind through data, carry out tasks and deliver reports. They listen, read, interpret, speak and analyse. The smartest ones also learn," the study states.
However, Deloitte's figures show only 42 per cent of CFOs say their teams are familiar with such emerging technologies. This suggests there is some scope for CFOs to embrace them in the future. The five technologies identified by Deloitte are:
1. Machine learning
As Deloitte's report notes, this technology can, “detect patterns in vast volumes of data and interpret their meaning."
2. Robotic cognitive automation
The report describes this as, “rules-based automation of routine tasks combined with analysis of unstructured data and capabilities that mimic human learning and decision making."
3. Natural language processing (NLP)
Many people will be familiar with bot technology, which is an example of NLP. It understands the text we type and uses this to provide information.
4. Natural language generation (NLG)
This technology is almost the reverse of NLP as it draws on data to generate narratives. For example, using the numbers in a financial statement to generate meaningful commentary about what the results say.
5. Speech recognition
This software 'hears' human speech for transcription purposes.
Rise of the software bots
QUT Professor Michael Milford is an authority in robotics and will be speaking at renowned tech summit CeBIT Australia next year. Milford, who is also Chief Investigator for the Australian Centre for Robotic Vision, outlines the application for robotics in finance.
Milford says it is not so much robots, robotic process automation (RPA) – essentially software bots – that could transform the finance function in two stages.
“Short term RPA will be used to develop software agents to take over procedural tasks such as credit card approvals and claims or loan approvals. This is relatively 'dumb' technology that follows rules to automate processes," he says.
RPA has the potential to not only replace humans in the data entry process but also perform other tasks as well. For instance, it could be used to cross check a consumer's credit score across many sources or to standardise other low-level tasks.
“At this stage RPA will be used to realise efficiencies, but major changes won't be required and the introduction of this tool doesn't have to be company-wide. RPA is attractive for CFOs as a first foray into this area," says Milford.
In the long-term, more intelligent robots could be able to analyse and optimise workflow and devise a more efficient process.
“We're just starting to see these sort of technologies being rolled out in finance teams," says Milford.
He says smart robots could be used to optimise the customer experience. This could begin with collecting all data about a customer from their first encounter to the business until the most recent interaction or sale.
“It will be possible to assess delays or any bottlenecks in completing an order and use this information to improve outcomes in the future. Businesses will also be able to look at data produced by different offices and compare the information so that more efficient processes used in one office can be applied to other offices to improve company performance," he says.
Guiding CFO thinking
With so much happening in this area so quickly, it may be difficult for CFOs to know where to start and how to guide their thinking.
Milford says this process should begin by building awareness of what is out there in terms of new technologies. He says it is important to closely evaluate the different merits of software providers when it comes time to select a partner to implement robotic or other processes in the business.
“If CFOs are informed, it will give them the ability to talk meaningfully about things like error rates with vendors when choosing providers."
The business may also benefit by having the right culture in place to allow new technologies to be properly accepted by staff and embedded in the business.
Milford suggests starting with manual, mundane tasks to allow staff to focus on higher value-added processes.
Down the track, the challenge could be to assess how the workforce could need to change. This includes investigating new skills that might be introduced to the business to make the most of technology investments.
Broader business benefits
Aside from the specific tools that cognitive processing might introduce to finance, there is a range of other emerging technologies that could transform future business.
Future commercial vehicle fleets could be made up entirely of driverless cars. The Internet of Things offers increasing interconnection of devices and equipment used in businesses. Logistics might be transformed by drone deliveries and large and small drones could increasingly fill the airspace.
Technology might also be used more to monitor employee performance or improve productivity. It might also be used to identify situations in which staff could benefit by further guidance and training to perform to their full potential.
Finance chiefs might also need to be involved in introducing these technologies across the business, especially when it comes to financing them.
Keeping on top of future technologies could allow CFOs to be ready to find opportunities for business transformation that everyone in the business can embrace.
- Robotic-based technologies could take over procedural tasks such as data entry.
- As these technologies mature they could increasingly be deployed to improve workflows.
- Finance executives may need to rethink their talent management by considering possible future cognitive technologies.
- New jobs and skills may be required in finance departments if robotic processes take over tasks currently done by employees.