Generative AI makes CFO’s life simple or bureaucratic? India Inc finance heads weigh in

“Draft a scary email that gets XYZ client to pay for $109,500 of services rendered but hasn't responded to five emails. Their invoices are five months overdue," the input Greg Isenberg fed to a generative AI (artificial intelligence) application and recovered the amount from a dodging client, said his Twitter post.

For CFOs, timely identification and mitigation of compliance related risks; forecasting future trends by identifying existing patterns; what-if analysis or predictive analytics and analysing historical data; assisting in decision-making; reducing 50 per cent time in drafting, editing annual reports, are some advantages that they are experiencing while this technology is at a nascent stage.

India Inc is trying, testing, self educating, and discovering the use of generative AI to drive business and finance transformation.

Sandeep Modi, CFO of mining company Hindustan Zinc, said he is planning to use generative AI for its payables and treasury operations. He also shared that this technology can generate synthetic data that can be used to test compliance systems, allowing timely identification and mitigation of compliance related risks.

Retail chain V-Mart CFO Anand Agarwal said, “We are using it (generative AI) extensively in drafting our annual report which is tedious and takes two to three months in drafting, editing, redrafting, and so on. With generative AI tools, the timeline remains the same, but it streamlines drafting and editing which saves us at least 50 per cent in time.”

On the other hand, healthcare company Apollo Health and Lifestyle’s CFO Ashish Maheshwari is exploring generative AI in accounts payable, forecasting in finance, and procurement.

"Generative AI has the potential to enable CFOs to shore up margins on the finance side," Maheshwari said.

This tool can assist in the development of diversified investment portfolios tailored to specific risk appetites and aimed at maximizing returns, he said.

So, what is Generative AI?

Generative AI is an artificial intelligence tool that is generating human-like content, images, audio and texts. It learns patterns from existing data and uses them to generate unique outputs from it which are realistic and highly complex content mirroring human creativity.

Agarwal of V-Mart noted that it is an “add-on tool through which one can multiply the efficiency of their team”.

While companies have not even hit the tip of the iceberg on the potential of this tool, many CFOs are working with the fact that this technology is nascent and still undergoing tremendous amounts of change as use cases are still being discovered.

“Our finance planning and analytics function is doing a serious case study around how to do what-if analysis or predictive analytics using data in generative AI,” said Agarwal.

The finance chiefs compared this technology to the likes of ‘Internet’ or ‘Google’ in the 90s. They feel that today generative AI may be a novelty, in the next two to five years people will assume it will be the norm, like the ‘Internet’ or ‘Google’.

The flipside: Bureaucracy

According to the finance leaders using generative AI for their finance function and business feel that if the automation is mismanaged, then instead of simplifying the processes, it can complicate them – it can add additional layers of inexactness, and can make the results bureaucratic.

“We double-check, triple-check before going ahead,” said Agarwal explaining how generative AI tools used for drafting legal responses were inaccurate and misleading. “Legal is a sensitive area so we take reference from such tools when we are trying to draft some replies,” he added.

The other flip side is that the vulnerability of data is a grave concern for all businesses trying to leverage this technology.

Modi of Hindustan Zinc also highlighted that this technology can be misused to create cyberattacks evading security systems or violate people's privacy, as it has the potential to memorise and replicate sensitive information.

The biggest challenge for using generative AI is that one needs to expose a lot of data whether it is in terms of numbers, or in terms of intellectual knowledge with AI servers or AI bots. There are multiple ways in which that security can get compromised, Agarwal voiced his concerns.

“Our IT head has warned us not to expose large amounts of data through official channels onto the generative AI cloud servers. That remains a strong vulnerability. And there is no clear-cut answer around how one is going to address the same,” he said.

However, like any other technological advancement, this too has to mature and evolve, and the finance chiefs optimistically feel that it will become far more accurate.

Solution to vulnerability?

Hindustan Zinc CFO highlighted the need to regulate generative AI by data protection and privacy laws similar to the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the US.

The data protection Bill will be an enabler for using generative AI, because the vulnerabilities around data sharing is huge, it will only protect and it will only allow far more secure use of data on any platform, including generative AI, concluded Agarwal.