On July 6, the "Intelligent Finance" Forum of the 2024 World Artificial Intelligence Conference with the theme of "New Quality Economy and Smart Finance" was held in Shanghai. I was invited to attend and deliver a keynote speech entitled "Changes and Unchanged Financial Management in the AI Era", sharing Kingdee's "Enterprise Financial Management Framework" based on more than 30 years of financial digitalization experience and the practice of millions of customers. I believe that the development of AI technology is leading to a new world of financial management, but human conscience can never be replaced by AI. I would like to share with you the content of the speech, I hope it will inspire you.
| Changes and changes in financial management in the AI era
It's a pleasure to talk to you about the impact of AI on finance. "Intelligence" and "finance" are two words respectively, the history is quite long, "finance" has a history of thousands of years in our country, "artificial intelligence" is a concept proposed at the Dartmouth Conference in 1956, but the combination of these two words is a matter of recent years, especially Dean Liu Qin (dean, professor and doctoral supervisor of the Institute of Intelligent Finance of Shanghai National Accounting Institute) has also been advocating "intelligent finance".
I have been in business for more than 30 years, when Kingdee's first financial software was developed by me, I applied an intelligent accounting voucher input mode, as long as you enter a sentence, such as "go to the bank to withdraw 3000 yuan in cash", the system can immediately generate an accounting voucher - "borrow 3000 cash, credit bank deposit 3000". So smart finance, I should have started exploring it 30 years ago, of course, it was only a very shallow beginning.
After more than 30 years of development, accounting and finance have gone through several stages of accounting computerization, accounting informatization, financial cloud, and then financial intelligence, each stage is very exciting, but the era of intelligent finance is the most exciting, of course, there are some people who feel uneasy. Therefore, we need to discuss the "change" and "unchanged" of financial management in the AI era, and only by understanding these changes, especially the changes behind the unchanged, can we grasp the essence of this change.
A modern enterprise financial management framework, we generally divide it into three systems: the support system, including data, processes and systems, as well as organization, talent, culture and leadership; Records system, mainly refers to accounting and operation; In the combat system, finance is not only the accounting of the background, but also the front of the operation, which includes planning and control, management information, external reporting and expert services. The ultimate goal of financial management is to enhance value creation. So how has such a framework changed after the advent of AI?
First, the value model of financial management has changed from gyro-type to hourglass-shaped. The accounting and operation in the middle of the gyro model have been replaced by AI, accounting has disappeared, and the positions and responsibilities of accountants have changed. The hourglass model is large at both ends and small in the middle, and the combat system above, the more it goes to the periphery, the greater its value creation; The following is the AI + financial management platform and organization, talent, culture, and leadership. AI is coming, and you shouldn't weaken it, but strengthen it. I call it "deep ploughing", and we must dig deep and meticulously at the bottom, and we must thrive more grain at the top. In the past, we talked about the integration of karma and finance, and now and the future of karma and wealth must fight side by side, the information is coming, you are in your hands, if you do not fight with it, it will not be able to give full play to its value.
The second change is from empirical prediction to AI accurate prediction. AI enables finance professionals to shift from empirical forecasting to accurate forecasting in the field of planning control. The former is like a traditional sand table simulation, although it can simulate predictions, but it is limited by data and subjective experience, and it is difficult to cope with the complex business environment. Therefore, in the era of AI, our forecasting is more like wargame deduction, through the integration of big data correlation analysis and deep learning and other technologies, it is more accurate in revenue forecasting, cost forecasting, profit forecasting, and risk prediction, and can quickly adapt to different changing environments and needs. Therefore, the planning and control of financial management is a management activity that is easier to create value, and if we are more accurate in predicting the future, we will not fight an unprepared battle, and the value we create will be greater. The practice of German e-commerce giant Otto Group shows that the application of AI technology has enabled its merchandise sales forecast accuracy to reach more than 90%, and inventory to drop by 20%.
The third change is from data exclusive to information inclusion and information empowerment. It is foreseeable that AI will play an increasingly important role in insight analysis and management reporting in the future, and managers and all employees no longer need to obtain information through financial specialists, but directly use AI assistants for self-service, exploratory analysis and decision support information empowerment, information is ubiquitous and readily available, it can be said that everyone has a financial assistant by their side, everyone is a finance, and everyone is a CEO. For example, in the past, you relied on scouts to provide information on the battlefield, which was slow and inaccurate, but modern warfare is through drones, which find the enemy's situation, immediately transmit back and take action, and the actions that occur are instantaneous, which can bring more high-speed and efficient decision-making. For example, Kingdee's client, Wusan Zhongda, has set up AI insight points at different points in the process, and the required data can be obtained at any time in these processes to help the business improve decision-making efficiency.
Fourth, the scope of expert service management activities, from individual elites to AI groups. In the past, in professional fields such as taxation, treasury, and capital operation, we often needed an expert or a series of experts with superb skills and knowledge, but now we can have a cross-industry, cross-field, and comprehensive AI team through AI, just like having dozens of Zhuge Liang, using massive and heterogeneous data to improve the upper limit of capabilities and solve business problems. For example, Kingdee helped China Merchants to use multi-feature recall + financial model technology to automatically screen transaction data every day to help central state-owned enterprises strictly prevent false trade risks.
If your company's finance department originally had 500 people, with AI, you can turn 500 people into 1,000 people, because AI is helping behind you, and your combat effectiveness will be significantly enhanced. On the other hand, turning 500 people into 200 people, through AI, you will also not lose your ability, which is also the value of AI.
Fifth, the focus of external reporting has shifted from financial indicators to development capacity evaluation. External reporting used to focus on financial indicators, but now we have ESG reports in addition to financial indicators, ESG reports include not only financial indicators, but also a variety of business indicators, which are non-standardized, diversified, and the disclosure standards are constantly changing, and AI can help you efficiently generate and output such reports. AI helps enterprises efficiently issue ESG reports and accurately evaluate their development capabilities through multi-modal data, autonomous understanding, real-time interaction, and continuous learning.
Change six, from the financial information system to the "AI + finance" intelligent platform. Bill Gates said, "Artificial intelligence is going to revolutionize the way you use computers." "Applying it to our industry will change the way we use financial systems. In the past, we found a function in a complex and vast menu, but in the future we will operate it through a minimalist mode; In the past, it was a "silent" system, and there were many processes put there, pushed in front of you, and then you operated, and the future will be a "sound and colorful" system. After the advent of AI, intelligent finance has undergone great changes, and I call it a minimalist front-end and a very complex and intelligent back-end.
Change seven, from "watcher" to "hugger". Finance professionals need to change from "watchers" to "hugs". In the past, the judgment and decision-making mode of the human brain was an information processing mode, and with experience, we found the law, and then made a judgment after a new problem came. But the model of AI is that with data and models, after a new problem comes, it predicts the future based on the big data algorithm model, which I call AI thinking. The maximum amount of data processed by the human brain in a day is between 1MB, but the amount of data processed by AI per day is 2.5EB. Therefore, we must embrace AI, have a strong AI helper, and with this kind of thinking, our work ability and organizational ability can be significantly changed.
Of course, there are many changes, such as the content of accounting assumptions, financial systems, accounting processes, external audits, and so on. Despite all these changes, the goal of creating value in finance remains the same, the principles of compliance remain the same, the ethics remain the same, the intuition, abstraction and idealization of human beings remain the same, we have great ideals, we have dreams, AI does not have them, these are the same.
Albert Einstein once said, "The true mark of intelligence is not knowledge, but imagination." "AI gives us a lot of knowledge, high-speed processing, and high-speed decision support, but it lacks imagination. In the book AI 3.0, the authors write that "our most cherished humanity should not be compared to a set of algorithms, and there are still many concerns about the unethical use of algorithms and data, as well as their dangers and potential uses." "The author expressed this concern a few years ago, but if I meet him, I tell him not to worry, because the human conscience will never be replaced by AI.
"AI + Finance" is coming, we must have a good AI strategy, with an AI strategy, we also need to have a good AI thinking, and AI thinking comes from the conscience in our hearts. If we are to respond to change without change, we need to remember that everyone has a conscience. If we can jump out of the "things" and work the higher "virtue" and even the "Tao", and have the anchor in our "heart", you will not feel worried and worried. Let's take conscience as the anchor of the sea and AI as the weapon of change, and discuss and build a beautiful new world of financial management!
Someone asked: What is conscience? You ask your heart, and your conscience is in your heart, your clear heart. Then no matter how many changes there are in the AI, you will not be afraid and worried.
I imagine a new world of financial management in my imagination, where everyone will have the opportunity to travel to the moon and carry the hourglass model of our smart finance.
Finally, it is accompanied by a small poem - "The vast sky, far and wide; My heart is still the same, free and easy. "Bless you all, thank you.