New research by KPMG International has unveiled some fascinating trends in the integration of AI within finance operations. With a significant 71% of organizations now leveraging AI, it's clear that this technology is making a substantial impact. The report, titled "KPMG global AI in finance report", covered a vast range of 2,900 organizations across 23 countries, building on an earlier study of 1,800 organizations in 10 countries.
AI Adoption and Deployment Levels
Among the 71% of organizations using AI, 41% are deploying it to a moderate or large degree, showing a notable 5% increase from the previous April research. KPMG anticipates this figure to rise further to 83% over the next three years. To better understand the landscape, KPMG created a maturity framework categorizing respondents into three groups: Leaders (24%), who are more advanced and mature in AI deployment; middle ground Implementers (58%); and beginners (18%). Of the Leaders group, an astonishing 95% expect to selectively or widely adopt AI within financial reporting in the next three years, compared to 39% in the other two groups.Most Common Usage Areas
Financial reporting emerged as the most common usage area for AI, but its application is widening to include treasury management, risk management, and tax. As the use of AI in finance grows, the benefits multiply. Initially, finance teams reported two to three benefits, but by the Leaders stage, this number increased to seven. Additionally, 57% of Leaders claim that the return on investment (ROI) is not only meeting but exceeding their expectations. Even among less advanced adopters, nearly a third (29%) reported the same.Challenges and Barriers
While the adoption of AI is on the rise, companies still face common barriers. Data security vulnerabilities (57%) top the list, followed by limited AI skills and knowledge (53%), gathering consistent data (48%), and costs (45%). However, David Rowlands, global head of AI at KPMG International, emphasizes that businesses should act now to reap the benefits. "Businesses need to proceed with robust governance in place and a clear focus on the outcomes they’re looking to achieve," he said. "The potential benefits are multiplying as we get further into a new era powered by AI."Emerging Capabilities and Trends
For example, the use of generative AI has seen significant growth. The percentage of companies with no intention to use this technology fell from 6% to just 1% in this survey. Companies are actively experimenting with piloting or using AI for treasury and risk management, but for tax management, they are slightly behind, with fewer than one-third of companies piloting or using AI in this area. This indicates the evolving nature of AI's application in different finance functions.