Autonomous Finance illustrated: What the future holds?

Introduction

In the bustling offices of BankCorp, a leading Financial Services company headquartered in the United States, the company’s CFO, Mary Reynolds, was at the forefront of a transformative journey. Over the last two years Mary and her team had been executing on their vision of moving from a traditional finance function to one that was truly autonomous – and working to shift the mindset of internal and external stakeholders alike. Now she was preparing to present the results of this work to the board alongside her team. She quickly reviewed the talking points for the session.

From data silos to real-time insights

John, her Chief Data Officer, would cover the improvements in insight generation as a result of the program. A few years ago, despite investments in data visualization and reporting tools and improvements in data processing times, the organization was still struggling with data silos, a weekly batch process and a lack of transparency. It took time, but the company had fully shifted to a cloud-first architecture which improved processing time and better supported AI applications. A finance data management platform was adopted to ensure data could be held in a configurable, centralized solution to support detailed queries and business insights. Now, business events are instantly and correctly allocated and accounted for, allowing finance to monitor changes to reporting, KPIs and balances in real time. This has improved capital allocation and forecasting while also allowing the finance team to make data available at the right time and the right level of detail via self-service reporting tools. John would present the following benefits:

• An increase in the ability to make data-driven decisions, in real time
• Better quality forecasting that helped reduce collection issues by 20% and customer defaults by 10%
• Improved anomaly detection, reducing the time and resources needed for reconciliations

Defining Autonomous Finance

While the exact definition differs slightly, at Aptitude, we believe an Autonomous Finance function is one where:

• Systems are self-learning, self-improving, efficient and interoperable
• Tasks are optimized and intelligent
• An enterprise-wide data platform supports real-time insights, enabling finance to be a strategic and trusted advisor to the business

From manual processes to autonomous systems 

Next up, BankCorp Chief Accounting Officer, Hannah, would talk about the changes in her department. Three years ago, as a first step in the autonomous finance program Hannah oversaw the implementation of a cloud general ledger supported by an accounting engine and subledger. This centralized the application of accounting rules and established the automation and financial controls that laid the groundwork for autonomous finance. It also empowered the team with tools they could use without relying on IT. This change, combined with the implementation of an AI solution, enabled the front office to introduce new products and offers, while also allowing the finance department to immediately assess regulatory and accounting requirements. Over the last year, they had been able to implement a daily close through completely touchless accounting and were targeting a continuous close for next year. Hannah would be sharing the following benefits:

• Successful move away from a period end close to a daily close for better business decision making
• A 50% reduction in the cost of the finance technology stack as a result of a reduction in data storage requirements and the decommissioning of legacy systems
• A reinvigorated, empowered finance team with the real-time data access and time to support strategic business goals.

Reducing the cost of compliance

Next up would be Julie, Head of Regulatory Compliance, in charge of making sure BankCorp adhered to all regulations including SOX, payment, consumer, lending, ESG, privacy and more. Given the increase in regulations over the last decade and the data volumes and levels of detail required, BankCorp implemented a cognitive automation tool to enable natural language processing for contract analysis and  extraction of relevant compliance information from documents. Machine learning algorithms analyzed the vast amount of data to identify patterns, anomalies and potential compliance risks. Finally, Julie and her team created an immutable audit trail of ESGrelated activities, transactions, and reports, ensuring transparency and authenticity. Julie would be sharing the following benefits:

• 20% reduction in time taken to identify and rectify compliance related discrepancies, reducing reporting time
• 60% reduction in time spent by internal and external audit teams, reducing the cost of compliance
• With better, real-time finance data, Julie worked with a cross-functional team to identify the most impactful investment areas to support the company’s move to net zero
• Finance can now facilitate contracts that are proposed or reassessed and settled in real time.

Finally, Mary would end with an update on the People and Culture aspects of the shift to autonomous finance. As anticipated, this was one of the most challenging aspects of the autonomous finance program, but Mary was proud to see how far they had come. Finance and IT were now working in lockstep to execute on a shared vision. The Senior Leadership Team had increased communication and created working groups designed to collect feedback, communicate learnings and share results across the company and establish a culture of experimentation around new technologies. Tangible results included:

• An 15% increase in finance team satisfaction

The overall business benefits of autonomous finance were clear, and Mary couldn’t wait to share the news with the board.

Making the vision a reality

While the story of BankCorp is  fictional, it serves as a compelling illustration of the potential benefits that organizations can realize by implementing an Autonomous Finance program. While the specific challenges and solutions may vary, the underlying themes of improved efficiency, enhanced decisionmaking, and reduced costs are universally applicable to businesses of all sizes. As CFOs continue to navigate the complexities of the modern business landscape, autonomous finance offers a promising path forward. By leveraging advanced technologies such as AI, machine learning, and automation, organizations can unlock new opportunities, mitigate risks, and drive sustainable growth.