Artificial Intelligence (AI) has the potential to considerably evolve data-rich industries such as financial planning. This technology could be instrumental in enabling the sector to be more efficient, more effective and to grow at a faster pace. However, much of the potential of AI is still yet to be seen so is it actually having an impact right now on the industry as we know it?
The field of AI is incredibly broad. It is not limited to processes like automation but could potentially expand into a much wider range of other functions and systems, many of which could prove groundbreaking. The heart of any AI system is the ability to absorb information and instructions and apply machine learning drawn from human behaviours. The end result is that the AI can evolve and respond to challenges or situations in a way that is almost entirely human.
Why does financial planning need AI?
There is constant pressure in financial planning to improve analysis and the insights that can be drawn from it. The more accurate and timely the insights that can be generated in a business context, the more business decision making is improved. Better informed decision making is proven to lead to more positive results, which is why financial planning has so much to gain from AI.
Change as a result of AI in financial planning
- Improving reporting processes. The use of AI is already making reporting more accurate and also providing more opportunities for reporting in real time so that data is always up to date.
- Ensuring compliance standards are met. Underestimating the importance of compliance can be fatal for any business. With AI, compliance processes can be automatically triggered so that there is effectively always someone with one eye on whether the business is within regulation and the law.
- Boosting productivity. Smart AI helps to ensure that resources are being used in a way that optimises what’s available, reducing costs and capitalising on opportunities to increase productivity. Improving productivity is likely to become even more linked to AI in the coming years as technology develops.
- More accurate forecasting. Integrating AI will help to reduce the volume of manual intervention required in forecasting and, as a result, increase the accuracy of that forecasting and minimise the potential for errors.
- Effective multitasking. An AI can run a much greater number of scenarios and simulations than any manual process can handle in the shortest amount of time.
- The analytics element. In terms of generating more accurate analytics for better financial planning, AI can be a key component in delivering predictive and prescriptive analysis that enables performance analysis, whether past, present or future. It will be instrumental in enabling financial planning insight into the key metrics that define an enterprise and may provide fundamental input for the business’ common strategic vision.
The end result of the changes that AI can bring into financial planning is likely to be well-managed big data and real-time data, globally standardised processes, more effective automation and insights that lead to better decision making capabilities. These are advantages that few in the industry can afford to overlook.