Banking finance departments are likely to be the first to succumb to generative artificial intelligence tools. But what comes after that? 

This whole AI euphoria is starting to get a bit long in the tooth – at least for the voracious maw of an always-on cyber-cycle of real-time new media constantly on the prowl for the next big thing. 

It is running about a year and a half now since the first commentators, finews.first included, started parsing out the unexpected, untimely, and always-wrenching implications for the financial industry in a big way. 

Fuel for Equities

In the meantime, terms such as «natural language processing» and «deep learning» have become standard vernacular for the well-versed and less well-versed – so obvious they need little or no defining in normal conversation. And if you don’t know, you just keep quiet and don’t dare ask.

Moreover, the age of everything AI has become propellant, or fodder, for the Magnificent Seven, or is it maybe Six or Five? The choice seems moot and largely dependent on how the US equity rally feels on any given day about that first imponderable Fed rate cut on the far horizon – or just the horizon.

A Bit Humdrum

Still, things seemed to have quietened down and the pace seems to have eased off a bit since those heady days after Chat GPT was imprinted onto our societal consciousness.

That must mean that some real work besides faked term papers, scientific research, and imaginative legal briefs, is getting done behind the scenes, particularly in finance. 

New Age Algorithm

New tech «in» usually equals jobs out at banks, which the few remaining internal bank COOs can happily attest to after their practical extinction about 5-10 years back, something a McKinsey piece from late 2022 indirectly alludes to.

But right now, it looks like a good many functions can start to breathe slightly more easily. AI doesn’t seem like it is coming to do the work of the front-line banker, or even saddling the investment portfolio manager with a bevy of hallucinated ETFs, at least not yet.

Modern Accounting

Instead, it is coming to stick its diaphanous claws in the realm of the finance department, speak the hapless bean counter.

That seems to be the take from a recent media release sent with a Singapore dateline by Nasdaq-listed Blackline, a company that rather prophetically calls itself «the home of modern accounting».

No Joy Left

A product of theirs slated for release in the third quarter of this year may take whatever joy the nominal internal finance department employee might have had in their job by automating journal entries, or the booking of credits and debits and corresponding balances, by using generative AI.

The interesting stuff beyond plain financial statements - recognizing patterns, developing, and calculating new and different metrics and ratios for the consumption of departmental finance and accounting heads and, subsequently management, the public, and investors – will potentially become the purview of artificial intelligence.

Widespread Concern

Besides the ubiquitous retail bot space, where generative tools are already helping to smooth the plight of clients here or there, that is potentially a momentous step. 

UK-based ACCA, or the Association of Chartered Certified Accountants, founded in 1904, seems to be so concerned about such developments that it sent out a media release in early May trumpeting a prominent thought leader it penned and published on the web that maintains AI has the potential to enhance processes and efficiencies but that it could also just as much erode trust.

Integrity is Key

«Just as we trust doctors to take care of our health without understanding the intricacies of medicine – businesses, regulators and capital markets trust accountants and auditors to ensure the integrity of financial statements without scrutinizing every figure themselves,» ACCA maintains.

Ultimately, they said this may lead to a situation where CFOs and senior controllers will have to sign off on the adequacy of controls and oversights for AI Systems as they start to play a greater role in financial reporting, planning, and other key functions.

Big Questions

None of this leaves the accounting profession in a good space, rendering clear questions about the future direction of their work, just as it does writers, actors, artists, and musicians who are also trying to come to terms with the implications of AI. 

Still, on a larger scale, it is a very interesting exercise that has wide-ranging implications and we will have to see how it all pans out. If it goes well, which means smoothly and very quietly in the background, the more technocratically-versed functions in compliance, financial crime, internal audit, risk management, and treasury could well be next.