Finance teams may one day be surprised to hear that closing the books took days or that financial models were run manually instead of automatically. Autonomous finance promises to run routine tasks seamlessly and without human assistance and, while most organisations do not yet have this capability, finance leaders remain optimistic about its potential to transform the department. Two-thirds of CFOs believe autonomous finance will become a reality by 2028, according to a survey by Gartner.
What is autonomous finance?
Autonomous finance systems use emerging technologies such as AI, machine learning and blockchain, that allow the function to operate on its own.
There is a clear distinction to be made between automated and autonomous finance. A forecasting engine that produces a best- and worst-case scenario for the next quarter, based on profit projections, is an example of good automation. But a forecasting engine that is continuously reading transactional data and telling your enterprise resource planning system to adjust the target inventory levels is autonomous finance.
The main difference between the two is the amount of resource required to run each model. Automated finance requires people to set parameters and instruct the technology what to do. In contrast, an autonomous finance system operates independently and is capable of carrying out tasks and making decisions without human involvement.
What does autonomous finance mean for businesses?
These autonomous systems have the potential to transform how the finance function operates. Routine and tedious processes such as transactions, reconciliations, invoice processing and expense management can be fully automated, saving finance teams time and resources. This not only reduces the risk of errors, it also frees finance professionals to focus on more strategic business activities and find new ways to add value to the business.
This would be a welcome move for many finance professionals, particularly given the mounting regulatory obligations and increasing demands for more sophisticated value-adding insights.
Although the benefits of a a self-learning, self-operating finance system are clear, many businesses do not have the skills or technology to operate an autonomous finance function. Finance leaders, while excited about the prospect, hold doubts about the technological capability of their organisations. Most of the technologies needed for autonomous finance are costly and the skills to use them effectively are rare and in extremely high demand.
Many also argue their organisation’s data quality and reliability is not where it needs to be for autonomous systems to work. Most CFOs (61%) still process data weekly or monthly and only 13% have access to real-time data, according to an Aptitude Software survey.
But these challenges are not insurmountable. Finance teams can start with simple processes, such as invoicing or expense tracking, and gradually begin using the technology for more complex tasks. Starting with small, manageable AI projects is a good way to test the tech and demonstrate the benefits of autonomous finance to the wider business.
