The Covid-19 pandemic has obviously had a large impact on the UK economy, with many businesses feeling the brunt of it. It is important that businesses adapt to the situation they find themselves in, so that they can survive and thrive in the new normal. One area of business that could need streamlining is the finance department, with many operating remotely or with a smaller team as a result of the lockdown. Artificial intelligence (AI) has the potential to transform finance departments if taken full advantage of, with advancements that can remove the need for tedious tasks and provide more time to prioritise more important tasks.
Despite this potential, 80% of businesses have yet to employ AI because they are worried about not gaining a return on investment, but these fears are unfounded and holding businesses back. Implementing AI can have many positive impacts on businesses, automating data entry, reducing fraud, and helping to enforce corporate policy.
How combining AI and humans can help to tackle cyber fraud
Increased data visibility
Too often, financial data is spread out over different types of documents such as PDFs and spreadsheets. This makes it increasingly difficult to get full visibility of the data, let alone get any real insights from it. One area that this is the case is with expenses, which often sit on outdated and fragmented systems. This can make it difficult for departments to understand and optimise their expense policy. AI and machine learning can help financial managers extract data from receipts and automatically classify it based on spend category and populates reports for analysis in one place.
This data can then be used to create comprehensive reports which provide businesses with insights that can improve their financial planning. On top of this, machine learning (a subset of AI) draws deeper insight as it processes more data, showing long-term spending patterns and enabling finance teams to optimise budget forecasting. This is very useful during an economic downturn, when businesses need to have a grip on their cash flow.
The modern world has made company spending less centralised than ever before, with employees spending money across so many expense categories and using more payment methods than ever before. This growth in the volume of financial data leads to an increase in the risk of fraud and noncompliance. This is a risk few businesses can take, especially when cash flow needs to be conserved.
A study by the Association of Certified Fraud Examiners (ACFE) found that the average organisation loses 5% of its annual revenue to internal fraud. During an economic downturn, this is simply unsustainable. Much of this is accidental, with employees often mistakenly duplicating expense claims or invoices. Businesses are only able to audit around 10% of expense reports manually, so much potential fraud goes undetected. AI provides a solution to this problem, enabling the auditing of every single spend report. It can predict patterns and detect any anomalies that appear in financial data.
Covid-19 has made it more important than ever that businesses are identifying any fraudulent activity and preventing it. Invoice fraud is one example that has seen an increase during the pandemic. Unfortunately, there are nefarious actors submitting fake invoice requests to organisations all over the UK in the hope that they won’t be checked. This can be an even bigger problem for small businesses, with smaller finance teams that are increasingly stretched. Technology can ensure these scam invoices are always caught and can save organisations money in the long run.
Financial services CIOs and business leaders must align priorities for Covid-19 response — Gartner
Enforce corporate policy
This increased visibility into spending patterns means organisations are able to see which corporate policies are working, as well as which policy violations might be justifiable. Using an expense or invoice tool that has AI capabilities to gather and summarise numbers helps finance managers identify trends to make data-driven recommendations for their client’s corporate policies.
It is time that finance departments are granted a technology assistant. AI can help to streamline data analyses, reduce fraud, and focus on more strategic functions to help ensure their business withstands an economic downturn.