Australian companies’ use of AI in their finance functions is growing steadily – and the Return on Investment (ROI) on AI is exceeding, or at least meeting, expectations, a KPMG International study has found.
And a quarter or 25% of Australian and overseas organizations are now reportedly planning “to increase AI budgets to overcome known barriers to its adoption.”
The KPMG global AI in finance report – a survey of 2,900 organizations across 23 countries, including 100 in Australia – found that “72% in both Australia and internationally were now using AI in some form in their finance operations.”
In this country, 35% were using it to “a ‘moderate to large’ degree while this was the case for 41% of overseas companies.”
As noted in the update, 44% of Australian respondents (42% globally) said they were “piloting AI in financial reporting, with 26% (24% globally) using it selectively.”
Over the next 3 years, 61% of Australian companies and 52% overseas said they “would be using it selectively.”
Accounting and financial reporting was the most common usage area – with tax “further behind, along with risk and treasury operations.”
In terms of ROI, “42% of Australian and 36% of global companies said it was meeting their expectations, while 20% of domestic and 25% of overseas organisations said their expectations were being exceeded. 13% of Australian companies and 11% globally said ROI was lower than they had hoped.”
Specifically on Generative AI, “45% of Australian (and 47% of global) companies were planning how to use it and 36% (30%) were piloting it. But a significantly larger number of Australian businesses (13%) had no plans to use GenAI; only 1% of global firms said this.”
The key benefits so far of AI take-up were “found to be ‘better data-enabled decisions’; ‘real time insight’; ability to predict trends’ and ‘increased data accuracy and reliability’. Robotic process automation was the top Australian answer for the area where most value had been added.”
The study showed that companies are turning to AI in “every area of corporate finance.”
Most organizations were using, piloting or at least “planning AI for reporting, accounting and financial planning. Treasury and risk management were slightly lower in their usage levels – with the potential benefits seen as generating better debt management, cash-flow forecasting, fraud detection, credit risk assessment, and scenario analysis in the treasury and risk management functions.”
Tax management, however, sits further behind.
In Australia, 37% were piloting or selectively “using AI (only 31% globally) although 38% (48% globally) are in the planning stage. A minority (22% Australia, 18% global) had no plans to introduce it all at all for tax.”
To increase the use of AI, leaders are taking steps to “overcome known barriers to its adoption.”
More than half both locally and internationally said they have “developed corporate principles and guidelines on the responsible use of AI.”
Other steps reportedly included the following: involving technology leadership in systems integration discussions; creating digital processes to keep up with regulatory and compliance changes; investing in “acquiring and developing AI skills and talent; ensuring leadership commitment to AI and communication; ensuring stakeholders understand how AI models work and their limitations.”
Importantly, a quarter of both Australian and overseas leaders said they planned to increase AI budgets or shift “resources from other activities, in order to address the issues.”
According to the report, there was overall “less concern about the accuracy of non-generative AI in Australia than elsewhere. Only 29% here said they had a large concern, compared to 44% globally.”
It was a ‘small’ concern to “more leaders here (46%, compared with 36% overseas). But for GenAI, the figures were more consistent – 43% Australia, 45% global said they had ‘large’ concerns and 46%/48% small concerns.”
Respondents were also asked about their external auditors.
As mentioned in the research report, more “overseas respondents (40%) felt their auditors understood their company’s AI ‘well’ than in Australia (31%), although a higher proportion of leaders here (37%) believed the use of AI, along with D&A and automation, were important in the work of their auditors than globally (32%).”
The report pointed out that when asked what would you like your auditor to do for your company using GenAI, top answers in Australia and overseas were as follows: risk mitigation and internal controls; fraud detection; risk anomaly detection and data analysis/quality management.