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Almost one third of European financial directors are testing solutions related to generative AI

BUSINESSAlmost one third of European financial directors are testing solutions related to generative AI

Despite the growing popularity of generative artificial intelligence, it turns out it is not widely used among CFOs. Currently, 12 percent of European companies plan to implement AI solutions, and almost one third are in the process of conducting tests in this area. Three out of four CFOs in Europe believe that artificial intelligence is significant from the perspective of a company’s financial strategy. According to the latest autumn edition of Deloitte’s European CFO Survey, finance managers are considering how this technology can help reduce business costs.

One of the main topics of the autumn edition of Deloitte’s European CFO Survey is generative artificial intelligence. Experts analyze its application level in Poland and 13 other Western countries. This new technology is the subject of discussion among management teams. The study aimed to verify how European CFOs perceive it and what challenges they face in implementing AI solutions. As the survey results show, 67 percent of CFOs plan to allocate less than 1 percent of the total budget to this technology over the next year. Only in the business and professional services sector, nearly half of CFOs (45 percent) expect to invest in artificial intelligence from 1 to 5 percent of the total annual company’s budget.

According to the survey, the vast majority, as much as 82 percent of Polish respondents, and 75 percent of all those surveyed, believe that generative artificial intelligence remains important from the perspective of implementing a business strategy, although to varying degrees. One fifth (21 percent) of European CFOs believe that AI is very important or important for the implementation of a business strategy, while every fourth (26 percent) claims that it is not very significant. Only 3 percent of the respondents consider this technology to be a very important aspect of the strategy.

Piotr Mechliński, partner associate at Risk Analytics & AI, Deloitte says, “Tools based on generative artificial intelligence, like Chat GPT or Google Bard, are most commonly encountered in the e-commerce industry. More companies are now experimenting with generative AI, as this technology has only been available on the market for a relatively short time. It is crucial to approach AI adoption in the enterprise in a way that maximizes benefits while properly managing risk. It’s worth starting implementations now, as it could bring a 20 to 30 percent cost reduction in selected areas.”

Deloitte’s report indicates that almost one third (34 percent) of European CFOs are experimenting with generative AI, while a further 21 percent are deepening their knowledge of the new technology. Only 29 percent say it’s too early. Testing this solution, countries such as Austria (51 percent), Germany (44 percent), and Finland (42 percent) stand out. This practice is most commonly encountered in the retail sector (52 percent) and the consumer goods sector (45 percent). However, Polish CFOs most often indicated (40 percent), that it’s too early for them to say at what stage the development of generative artificial intelligence is within their company.

Jan Michalski, partner, head of GEN AI CE, Deloitte, observes, “We see progressive adoption of generative AI among European enterprises. Even though currently only about one in ten CFOs in Europe includes such solutions in their business strategies, the adoption process will be gathering pace. Polish companies will be able to benefit from the experiences of other markets that have previously decided to utilize the new possibilities in their organizations.”

Regarding the main benefits anticipated from the implementation of generative artificial intelligence in the company, two out of five (44 percent) European CFOs expect to achieve cost reduction. Among the Polish respondents, 55 percent pointed this out, and the aspect was of greatest importance to the Irish – as many as 68 percent. Increases in margins, efficiency and productivity (38 percent), improved customer service quality (37 percent), and greater forecast accuracy (37 percent) are the other benefits CFOs expect from introducing AI into their operations. Poland’s results in this area were 32, 17, and 50 percent, respectively.

Robert Nowak, partner at the Tax Advisory Department and leader of the CFO program at Deloitte, said, “Regardless of the size of the enterprise we analyzed, it seems that business cost reduction is the most important benefit that CFOs expect from implementing AI technology. Among the Polish respondents, improving forecast accuracy was the second most important aspect. However, the most important issue for European CFOs employed in listed companies is better customer service.”

Danish and Irish CFOs often pointed at data resources and technology (42 percent, 63 percent respectively), as well as confidentiality and security issues (35 percent) as potential challenges in adopting AI. Most managers from Poland (56 percent) and Austria (52 percent) pointed to the last aspect. CFOs in Italy, Portugal, and Spain listed investment costs among the three main barriers to implementing generative AI.

The survey took place from September to early October 2023, and this is already the eighteenth edition of the European CFO Survey. Deloitte conducts it twice a year among 1,213 CFOs working in leading companies from fourteen European countries, including Austria, Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.

Experts predict that the next edition of the survey might bring more positive sentiments from CFOs. However, much will depend on how consumers and the economy as a whole will cope with the effects of the inflation shock over the past twelve months.

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