What 3 finance leaders make of generative A.I., and how it is affecting their businesses now

Generative A.I. has been a hot topic in the finance community over the past few months. From a major bank banning ChatGPT to a CFO using ChatGPT to build an FP&A tool to an MIT researcher using ChatGPT and DALL-E 2 to demonstrate FP&A scenario generation. As generative A.I. is becoming less of an obscure concept, are finance leaders more willing to embrace the technology?

Well, one thing’s for sure, they’re encouraging their people to get familiar with ChatGPT and the possible uses, says Tom Hood, EVP of business engagement and growth for the Association of International Certified Professional Accountants (AICPA). Hood has regular meetings with AICPA’s Future of Finance Leadership Advisory Group, comprised of more than 50 senior finance leaders at major U.S. corporations. 

“Finance leaders don’t want to deploy ChatGPT itself inside their companies because it’s not secure,” Hood explains. So, they’re telling their teams to test it out, but “Don’t go using our real data,” he says. Finance leaders say ChatGPT, which is capable of understanding natural human language, is “now moving so fast, and getting so much hype that they have to pay attention to it, even if they didn’t want to,” Hood says. “Their boards are asking about it, and the CEO.” And Hood pointed out that with Microsoft’s investment in ChatGPT, the technology will eventually be used in its applications like Excel, which some finance teams still use. 

CFO perspectives

When I had a recent chat with Debbie Clifford, CFO at Autodesk, she also noted the rapid focus on generative A.I. and finance. “We’re not, today, using generative A.I. in the finance function,” Clifford told me. “But I tell you what, I think we should be. I think that this is an area that we absolutely need to explore. It’s just moving so fast that we don’t have a strategy around it within finance at this point.”

But Autodesk’s finance team has been using machine learning algorithms. “What we’ve been doing is taking some of our largest revenue and spend areas and crunching through large scale datasets to determine how using machine learning algorithms with the forecast might look like,” Clifford explains. “And it’s getting better and better. It’s a very important cross-check for us, ‘The humans say 10, does the model say 10’?” She added, “I believe that over time, with the right datasets, computers can do better forecasts than humans. However, humans add judgment that’s incredibly important and will never go away.”

Meanwhile, Katie Rooney, CFO at Alight, said during a recent Fortune Emerging CFO event that the finance organization has used predictive models to do scenario planning around the risk of potential recessionary environments. Regarding the use of ChatGPT, Rooney brought up concerns about protecting data. “As we think about the role of the CFO and the finance function, increasingly, the focus on security is really critical,” she explained. “I spend a lot more time on that area than I did a few years ago. How data gets shared is really critical. Our data is our clients’ data. So, being incredibly thoughtful about that, I think is a key strategy for finance seems to be involved in.”

Nvidia Corp.’s CFO, Colette Kress, pointed to the increased focus on A.I. in business. “We’ve entered a stage now where we actually believe A.I. is an inflection point,” Kress said during Morgan Stanley’s Technology Media and Telecom Conference in March. “And what is stemming that inflection point, not only our focus in terms of large language models, recommender engines or natural language processing, that we’ve done, but we have now incurred a point in time with generative A.I., particularly with ChatGPT, that folks understand in just some of the most simple cases, how this can benefit them.”

The finance leaders Hood speaks with are saying, “‘Everything we look at with new technology coming in, we’re going to determine how A.I. is affecting it, or baked into it,’” he says.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

The Consumer Technology Association’s (CTA) “U.S. Consumer Technology Software and Services Industry Forecast” predicts that software and services will account for 31% ($151 billion) of the U.S. consumer technology market in 2023. The research finds consumers want a seamless experience when using different services. Gaming remains the largest form of digital entertainment, according to the report. However, for the first time since forecasting the gaming software category, CTA estimates U.S. gaming software revenues contracted by 6% in 2022, to $48.1 billion. The research also found that consumers are experiencing subscription fatigue. “With so many services available, consumers may look to save money by bundling or reducing the number of services they use,” CTA noted.

Going deeper

“Speak With Confidence: Four Fixes That Work,” a report in Wharton’s business journal, offers four tips for confident communication in the workplace. The first tip is to “ditch the hedges.” When a person says “‘around,’ ‘arguably,’ ‘I believe,’ ‘generally,’ ‘kind of,’ ‘maybe,’ ‘presumably,’ ‘rarely,’ or ‘usually,’ they’re hedging,” according to the report.

Leaderboard

Carl Mellander, CFO at Ericsson (Nasdaq: ERIC), will step down at the end of the first quarter of 2024. Mellander has been with Ericsson for over 25 years and CFO for seven years. A recruitment process will be initiated to appoint a successor. “If there was ever a good time for me to move on to new career adventures, I feel that this moment is it, and I am excited about what the future might bring,” Mellander said in a statement.

Julianna Balicka was named EVP and CFO of Bancorp, Inc. (Nasdaq: HOPE), the holding company of Bank of Hope. David P. Malone, who stepped in as interim chief financial officer on Jan. 6, has agreed to stay on through April 30 to assist in the transition process. Balicka, age 45, most recently served as SVP, director of investor relations and corporate finance at East West Bank, a wholly owned company of East West Bancorp, Inc. (Nasdaq: EWBC). Before joining East West, Balicka was with Keefe, Bruyette & Woods as managing director of equity research. She began her career as an investment banking analyst in the financial institutions group at Donaldson, Lufkin & Jenrette.

Overheard

“We communicate very honestly, openly, transparently, and authentically. And we talk to our employees about any of the issues that they want to talk about. [That’s] really important today because employees want to work for human beings.”

—Chuck Robbins, CEO of Cisco Systems, told Fortune in an interview. Cisco earned the top spot on the Fortune 100 Best Companies to Work For list.

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