AI Revolutionizes Financial Reporting: Insights from KPMG’s Global Survey

NEW YORK, 4 December 2024 – Artificial ​Intelligence (AI) is starting an era ​of transformation in the ​financial sector, reshaping everything from ​financial information to risk management. According to KPMG’s latest global survey, IA ​adoption has increased significantly, and organizations have increasingly used ​this technology to increase efficiency, improve decision-making and generate significant investment benefits. The study provides a detailed review ​of the maturity of the IA, implementation issues and ​its important implications for financial ​functions.

Research context

Between April and September 2024, the KPMG study covered 2,900 companies from ​23 developed and ​emerging economies. The study examined how organizations integrate IA into their financial processes, focusing on adoption ​trends, AMI and operational issues. In particular, the survey found that 71% of respondents are already using IA in funding, and ​this figure is expected ​to increase to 83% over three years. This growth highlights ​the recognition of the CEW ​as a determining ​factor ​in modern financial functions.

The broad scope of the study highlighted the fact that companies implement ​the impact assessment not ​only in financial reporting but also in cash management, fraud detection, tax compliance and risk assessment. These applications reflect a shift from labour-intensive ​traditional practices to agile and technological strategies.

Maturity ​framework AI

In order to assess organizational readiness for IA adoption, KPMG has developed a three-level IA maturity framework: leaders, implementers and principles. Leaders, representing 24% of respondents, have already achieved the advanced integration of IA, with significant ​operational and strategic benefits. Enforcement officers, representing 58%, are ​actively implementing and making extensive use of ​the CEW through processes. In the meantime, ​18% of companies are classified as beginners, exploring AI’s potential by facing barriers ​such as ​limited resources and technical knowledge.

Organizations classified as leaders have a clear advantage in using IA to achieve a competitive ​advantage. For ​example, 57% of leaders report ​that their IA initiatives exceed the expectations of the BIS, far exceeding ​their less mature counterparts. This segment is characterized by strong CEW strategies, ​extensive training programs and effective data governance frameworks that enable them to capitalize on the transformative power of ​the CEW.

Transforming finance through AI

IA integration revolutionizes funding by ​automating routine tasks, improving ​analytical accuracy and providing predictive information. These tools allow finance professionals to ​move ​from transactional to strategic planning. For example, real-time analysis tools allow companies to dynamically monitor financial performance, offering granular ideas on income models, cost factors and potential ​risks.

One of the most striking applications of IA is forecasting and budgeting. When analyzing historical data and external variables, AI systems generate very accurate forecasts, ​allowing companies to make proactive decisions. In addition, machine learning algorithms detect anomalies and models ​that can mean ​fraud, ​thus ensuring a ​safer financial environment.

How AI Leaders Drive ROI

The ​survey highlights the success of IO leaders in achieving a higher IO. These organizations report greater efficiency, better decision-making and reduced operational costs. The data highlight several key areas where leaders highlight:

• Fraud Detection: AI systems detect and mitigate fraud risks in real time, ​significantly reducing financial losses.
• Cost Optimization: ​By streamlining operations, AI minimizes resource wastage and ​enhances productivity.
• Enhanced Decision-Making: AI-driven insights enable data-informed decisions, improving outcomes across ​financial processes.
• Real-Time Reporting: AI tools accelerate financial closing cycles, offering timely insights to stakeholders.

The survey reveals that AI leaders invest significantly in data quality, ensuring ​that AI models are trained in accurate and complete data. They ​also give priority to the ethical ​use ​of IA, building trust among stakeholders through adherence to transparency and ​governance standards.

Overcoming barriers ​to AI adoption

Despite its potential for transformation, the adoption of AI in the ​financial field is ​not without difficulties. The KPMG survey identifies several obstacles, including:

• Data ​Quality and Privacy: Ensuring data ​accuracy and safeguarding sensitive ​information ​remain significant concerns for organizations.
• Talent Shortage: A lack of skilled ​professionals proficient in AI technologies hinders implementation efforts.
• Governance and ​Ethical Concerns: Establishing robust frameworks to manage AI responsibly is a priority for many companies.

Organizations address these challenges through specific initiatives. For example, 74% of managers have implemented principles of responsible ​use of IA, while many invest in training programs to bridge the ​talent gap. ​Collaboration with ​academic institutions and AI solution providers also helps ​companies ​overcome technical barriers.

Evolution of financial reporting

AI fundamentally ​changes ​the financial information landscape. By automating ​data collection, analysis ​and information, ​AI reduces manual effort and accelerates closing ​processes. The survey indicates that almost 70% of organizations use or ​test impact assessment tools for financial reporting ​and compliance. This change increases transparency, improves accuracy and ensures consistency of reporting, ​which is essential for ​compliance.

In addition, AI-based information tools provide customized panels that ​meet the diverse needs ​of stakeholders, ​from ​leaders to investors. These tools provide ​real-time updates on key financial measures and foster a data-based ​decision-making culture. As regulatory requirements become more stringent, AI’s ability to ​ensure compliance and minimize errors becomes essential.

The Way Forward for ​AI in Finance

As ​AI technologies evolve, their role in funding will continue to grow. New innovations, such as ​the IA generator and ​advanced machine learning models, promise to further improve the capabilities of financial systems. For example, the generic CEW can help prepare financial reports and ​investor presentations, save ​time and ​improve consistency.

The KPMG survey concludes ​that organizations ​should favour a strategic approach ​to adopting AI. This includes the development of clear objectives, investment in technological infrastructure and the promotion of ​a culture of innovation. Companies that adopt these principles are ready to remain ​competitive in an increasingly digital and data-based economy.

In conclusion, the KPMG survey highlights the transformative impact of IA on the financial function. By enhancing efficiency, improving accuracy and enabling strategic decision-making, AI empowers organizations ​to navigate safely in complex financial landscapes. With the acceleration of adoption, the financial sector is set to enter a ​new era of innovation and growth, driven by the unlimited potential of artificial intelligence.