How AI improve your financial management?
Artificial intelligence has never failed to surprise us with its advanced abilities, technological supremacy, and irreplaceable presence in almost every industry.
One of the tremendous achievements of AI is reforming financial management and making CFOs’ jobs easier.
We can already see the shift happening from paper bills and files to cloud-operated accounting applications.
The advent of AI in financial planning can make this whole process more rapid, precise, and efficient.
Challenges of financial management
It is the finance team of the organization which mounts the pressure and responsibility of budgeting and spending on their shoulders.
You can see their number crunching and micromanaging every expense report to keep unnecessary expenses away track what goes out and comes in.
They have a crucial role in making smart financial decisions and thereby pushing the company to make better profit margins.
Right from creating spending policies to approving expenses, they scrutinize every bill created internally and limit their expenses within their budgets.
It is possible to diversify the roles and responsibilities that come along with financial management.
But in real-time, this can become highly chaotic and unmanageable and soon their offices will be surrounded by papers and file cabinets.
Expenses come from all directions, be it a PPC advertising cost or payroll. Let’s not rule out the fact that different vendors prefer different payment modes.
So when a company uses multiple systems to pay these bills, expense tracking will be horrific.
As tracking gets irregular, making sure that budgets are met will be an impossible task too. As a result, inaccuracies and inconsistencies would slowly peak into the financial system leaving the whole organization in poor financial shape and management.
Financial management requires one to have an up-to-date and transparent view of their accounting status.
It’s indeed a challenge for the finance team to meet the complex goals and produce positive outcomes when they are equipped with inefficient and outdated tools.
How AI applications are redefining finance management?
To avoid the mayhem that has been pictured above, financial experts prefer AI financial technology.
There is a plenitude of AI applications in finance that even regular consumers get to use, e.g. AI-powered chat systems in bank applications. One doesn’t have to be a technical genius to use them.
What are the other functional AI financial software and solutions that have been adopted by the financial management team?
1. Market prediction and trading
The algorithms of artificial intelligence are strong enough to analyze an avalanche of data and sharply predict future trends.
This trait is great for investors and financiers whose job is to foresee the upcoming risks and opportunities and make financial decisions accordingly.
One great example is AI finance software for trading that predicts the price of the stocks based on influencing factors.
2. Personalized financial management for customers
Customers don’t prefer going to banks to enjoy their services. So, AI financial technology takes banks closer to their customers.
The banking application has been designed to personalize the experience for customers.
While personalization has been existing already for a long time, AI adds its touch by eliminating the need for an actual person to offer personalized support and assistance 24/7.
3. Credit eligibility check
Financial institutions rely on credit scores to find out who is more likely to return the borrowed money on time.
With an increasing number of applicants and loopholes in the current credit system, lenders have a hard time weighing the factors and delivering the funds to the most eligible person.
Being one of the crucial and time-saving AI applications in finance, AI-based tools can accurately predict and pick reliable borrowers and thus it helps banks not lose their money or chase defaulters.
4. Risk management
As a part of financial management, the finance team has to prevent fraudster activities to not lose their money.
The current safety protocols don’t offer much scope to mitigate such risks and they are well-known for triggering false positives.
It takes a lot of effort from the cyber-security team to keep up with the growing hacking trends.
AI finance software lets them set dynamic and cognitive rules and triggers with high degree of accuracy to catch dubious activities at the drop of the hat.
AI technologies to transform your finance management
We have already noticed many AI applications in finance dominating the industry and becoming an integral part of the financial ecosystem.
These AI financial software take corporate finance automation to new heights and drive away manual work.
Some of the ingenious tools that you can implement as a part of your financial management are below.
1. OCR (Optical Character Recognition)
This is an AI-based tool that can scan documents and convert them into text. They can be handy for accountants who enter invoices manually into their payment software.
It can pick up the text from a handwritten invoice with unintelligible texts, a printed hardcopy bill, or a PDF document that’s already digital.
This app has a scanner that asks you to place and scan the invoice. Once it scans and reads, it lets you edit, process, or copy the content.
Accounts payable departments roughly process 15 to 20 invoices on an average day.
The odds of making a typo error are too high. This advanced AI financial technology can save their day and improve work efficiency.
2. Transactional bots
Transactional bots are almost like knowledge bots (Alexa, Cortana, and Siri fall under this category) except that the former is limited to performing specialized tasks that can replace a technician.
It’s very resourceful in banks and other financial institutions where customers call in requesting specific operations to be performed (blocking a card, activating a service, or verification). Or it can even be calls made by the bank to customers for verification reasons.
By executing AI in financial planning this way, you reduce the need to hire more agents and quickly process employee requests.
They are built with structured data and limited operations to serve customers, fulfill their obligations and execute them.
3. Artificial neural networks
Performing like neural networks of our brain, artificial neural networks are specially designed to absorb inputs, learn, and adjust them into a different form.
Like a human brain, the algorithms of neural networks are good at understanding patterns, and relationships that exist within a set of data.
The role of neural networks & AI in financial planning contributes to sound and accurate financial decisions that generate more gains.
Hence they find their applications in stock market prediction, loan application eligibility analysis, and prospect list preparation for credit cards.
They are mainly used by lenders to determine the ideal candidate with a low failure rate and high potential to repay the loan.
By feeding the loan applicant’s profile (bank statements, KYC documents, etc.) into this AI finance software, banks can gauge their eligible credit, repayment period, and overall success rate so that they can take appropriate underwriting decisions even with very little information about the applicant.
4. RPA (Robotic Process Automation)
These are software bots that you can teach a job and let them repeat after you.
Financial management is full of repetitive tasks that employees waste their time on. RPA and AI applications in finance can make these tasks happen rapidly and accurately without human intervention.
From ensuring compliance to serving customers better, RPA bots can replace human sweatshops in the finance and banking industry.
Some other routine tasks that RPA can automate are accounts payable, financial audits, report generation, and KYC.
By automating monotonous tasks, your employees can focus on critical tasks and improve their financial acumen and productivity.
Work happens much faster with zero chances for errors and the company can save money and energy.
5. Robo advisors
We have already seen how functional AI in financial planning is. Robo advisors are automated digital applications that gather data and offer suggestions based on that.
You can see them being used in investment-related applications where it runs a survey, collect user responses, and suggest an investment portfolio that suits the user.
Through its questionnaire, it tries to learn the financial state, goals, and capabilities.
It guides the user from there to account creation and then to portfolio setup and management.
Usually, this task requires well-knowledgeable agents who are experts in investment and markets. But this AI finance software replaces the need for that.
6. Cognitive computing
Cognitive computing is the zenith of technology that is capable of understanding beyond the computer language to solve complex issues (like a human brain) and have conversational interactions.
In banking and financial management, they are generally used in creating chatbots to nurture customers and improve vulnerability against security threats.
For sake of maintaining compliance and security, users often face inconvenience while making business financial transactions.
With cognitive AI applications in finance, you can overcome that by implementing applications that maintain the balance between security and user-oriented access.
You can turn your financial management more robust, structured, and lenient.
Furthermore, cognitive chatbots aren’t restricted to limited resources that fetch typical bot responses. They can adeptly answer even complex questions.
Get started with Volopay
Corporate finance automation is an extensive topic that keeps broadening every day and changing things around.
Half of the credits go to Artificial Intelligence for bringing basic automation to the next level through its sophisticated algorithms.
Financial management can be a lot better and safer if you start making use of these tools. At the end of the day, your team should have more control over the finances and maintain its health in stable condition.
As the first step, get your company an efficient payment management system like Volopay that comes with trailblazing AI financial technology including OCR.
Your employees no longer need to type invoices into the system but just scan them and feed them automatically.
Along with this, enjoy making local and international payments at jaw-dropping FX costs and creating unlimited virtual cards for online payments.