The integration of artificial intelligence (AI) within the financial realm is a transformative journey rather than merely a trend, tackling unique challenges and capitalising on new opportunities in the sector. Projected growth in AI adoption is impressive, with forecasts suggesting an increase from $1.17 billion in 2023 to an estimated $4.96 billion by 2028. This represents a compounded annual growth rate (CAGR) of 33.50%, with a significant 38% increase expected in 2023 alone.
From book keeping to strategic insight
Today, the roles of chartered accountants (CAs) and accountants have evolved from traditional book keeping to dynamic financial management. AI enables professionals to process data in real time and derive actionable financial insights, a capability that was previously unavailable. This shift is particularly pertinent in an era dominated by vast data volumes, where AI-driven financial analysis is critical for navigating the complex Indian financial landscape. AI extends beyond mere number crunching; it identifies patterns, provides insights, and forecasts future financial conditions, giving founders and finance professionals a competitive edge.
For instance, in the United States, Zeni.ai, created by domain expertise founders or Fincent, is a book-keeping platform automating daily book-keeping along with business insights, transforming the way of doing book-keeping.
Likewise, in India, Febi.ai, a cloud-based book-keeping and tax compliance platform created by domain experts, uses AI technology to eliminate manual tasks, reduce errors and provide real-time business insights.
Harnessing AI for enhanced compliance and efficiency
The question of why CAs should use AI to optimise accounting and tax compliance is increasingly relevant. AI eliminates manual tasks, streamlines account reconciliation, reduces the risk of human error, and provides real-time business insights. This not only saves time but also enhances the efficiency of daily operations. AI’s ability to analyse large datasets swiftly also supports strategic decision-making. Moreover, real-time insights and tailored financial reports enhance client satisfaction and positively impact retention rates.
AI in financial forecasting and risk management
The transformative impact of AI is evident across financial institutions, especially in banking, where AI adoption could potentially save up to $1 trillion by 2030. Already, 77% of financial entities have integrated AI into their workflows, marking a shift from simple process optimisation to strategic empowerment of professionals. This shift allows accounting professionals to focus more on strategic initiatives rather than routine tasks. AI’s capability for handling up to 75% of operational tasks is a significant shift, empowering financial experts to undertake more strategic planning, analytics, and advisory roles, thereby adding substantial value to businesses navigating the complex Indian economy.
Predictive analytics and future-proofing
Machine learning, a key component of AI, enhances decision-making and sets new standards in financial operations by emphasising accuracy, scalability, and adaptability. Moreover, AI’s role in financial forecasting empowers firms to plan and strategise effectively. The introduction of chatbots in finance, operating 24/7, redefines customer interaction by providing real-time solutions and personalised advice, specifically tailored to the Indian market.
For both startups and large enterprises, AI is a vital tool in risk assessment. It analyses complex transactional patterns, detects anomalies, and predicts potential pitfalls, ensuring compliance and strengthening financial institutions against evolving threats.
Globally, the market for predictive analytics in accounting is expected to grow from $6.51 billion in 2023 to $46.05 billion by 2032, with a CAGR of 27.7% from 2023 to 2032. Predictive analytics provide businesses with a structured roadmap, helping them anticipate market shifts, optimise strategies, and efficiently pivot in response to volatile market conditions.
The human-AI collaboration
In conclusion, as AI and finance converge specifically within India, the focus shifts from merely deploying new tools to driving substantial change. While AI optimises daily operations, it does not replace CAs but rather enhances their capabilities. The synergy between human expertise and AI’s analytical power promises a resilient and adaptable financial future, ready to meet India’s unique challenges and opportunities.
Abhinav Aggarwal
The author is a CA and Chairman, Northern India Regional Council of Institute of Chartered Accountants of India