How Artificial Intelligence is Transforming the Financial … · 2019-03-22 · • Predictive...

How Artificial Intelligence is Transforming the Financial EcosystemMFM Localism EventMarch 2019

Copyright © 2019 Deloitte Development LLC. All rights reserved. 1

Baris [email protected]

Tech Strategy

Introductions

Dennis [email protected]

Strategy and Analytics


1900s

Tabulating System EraMechanical devices helped us with tasks such as organizing data and making calculations for tasks such as evaluating the sales performances of a company’s employees (Hollerith Tabulating Machine).

1950s

Programmable Systems EraProgrammable systems enabled major accomplishments such as space exploration and the development of the Internet. The programmable systems era will continue indefinitely, and will underpin the era of computing that we are in now (Windows Desktops/ERP systems).

2000s

CognitiveEraCognitive capabilities augment and amplify human intelligence. It is critical to recognize and know when and how to automate and augment to achieve the cognitive advantage.

2020s

Amplified Intelligence EraIn the future, systems will be able to augment human intelligence and replicate human interactions.

Welcome to the Cognitive Era


Exponential Growth of DataIncreasing access to multi-source, multi-structured data is creating all new capabilities, inspiring innovation, and generating completely new business models

Smarter AlgorithmsAdvanced algorithm development and machine learning techniques are enhancing the way automated reasoning occurs

Reduced Computing CostsThe cost of computing has been slashed thanks to technologies such as cloud computing and virtualization that lower infrastructure costs

Faster Processing SpeedsImproved tools and frameworks for handling and managing larger datasets accelerate capabilities and reduce time-to-data

Advances in key disciplines led to the prominence of Artificial Intelligence (AI)


20151970 2000 2020Data storage to review prior performance Data analytics AI

Ad

ded

Val

ue

Hindsight

Historical reporting on key performance

indicators

DataCapture

DesktopcomputingMainframes

Manual

ERP

Foresight

New technologies (Cloud, Robotics, AI, ML,

NLP, Blockchain)

Cloud

In-memory Computing

Visualization Process Robotics

AdvancedAnalytics

CognitiveComputing

Blockchain

Digital

Insight

Reporting and analytic software

Profitabilityanalysis

Mobiledevices

EPM

Performancetracking

New technologies have driven the development of Finance for decades


Finance transformations present the opportunity to make smarter decisions, at a faster pace

The future disruptors within finance enhance the ability of finance organizations to process transactions, scale, and provide strategic decision support. The key question for finance organizations is how best to deploy the extra capacity created by the these disruptors.

HOW HUMANS IN FINANCE NEED TO RESPOND

Talent Model

• Transactional processes that rely on large, disconnected teams today will be automated.

• Finance teams will require a high degree of business acumen and ease with analytic models.

Organization Structure

• Transition from large shared services to smaller, flexible tiger teams.

• Structure as a more matrixed organization with constant ties to the business.

Service Delivery Model

• Adapt finance service delivery to be more nimble and lead from the front

• Leverage cognitive technologies to quickly quantify dollar value and deliver financial impact for business decisions


Structured DataDeterministic Outcomes

Unstructured DataProbabilistic Outcomes

Robotic Process Automation Cognitive Automation

“Mimics Human Actions”

Potential RPA Applications:• Back Office – “Swivel

chair” clerical tasks• Supply Chain –

Cross-system verification and coordination

• Customer Service –Mass customization of automated CRM

RPA Technologies:• Robotic Process

Automation• Rules engines• Event stream / complex

event processing• Human-in-the-loop

process automation

RPA Realm:• Rules-based tasks• Operational processes

“Augments Human Intelligence”

Potential Cognitive Applications:• Supply Chain – Predictive

analytics in inventory management

• Customer Support –Algorithms to optimize supply logistics networks

• Manufacturing –Computer vision systems for inspection and quality assurance

Cognitive Technologies:• Optical Character

Recog• Natural language

Processing• Machine learning• Integrated cognitive

computing platforms

Cognitive Realm:• Cognitive analytics• Decision making

Through AI, companies can overcome the labor and scaling challenges arising from complex and ever changing technology, compliance and process landscape


An automated robot begins populating the net revenue report and output to its analytics engine

5:00 AM

The data from the analytics engine is staged on a tableau or BI server and dashboards are refreshed

6:00 AM

The CFO has access to the updated reports and narratives as soon as they arrive in the office

The CFO further drills down into cost variance analyses for products/services with dropping margins

The natural language generator adds in narratives to the dashboard

7:00am

8:00am

The CFO interacts with the chatbot in natural language to drill down into splits by channel/product

8:10am

8:15am

In less than 5 years, leading media Finance organizations could look very different

All of the technologies required to realize this vision of the future exist today


Robotic Process Automation Video


Cognitive Automation Video


Speed Increase

Cost Reduction

Quality

Talent

Scalability24/7 Operations

Decision Making

Internal Control

AI Benefits

Reduce turn-around time

Reduce cost through automating activities and requiring fewer FTEs

Increase quality by avoiding human error

Boost employee engagement by shifting agents to more interesting tasks

Increased capacity without long build-up phase

Non-stop performance

Improve executive decision making

Reduce potential for human fraud

Reduces time to action based on accuracy and confidence in data available

Ensuring consistency / accuracy of data in reporting by eliminating manual errors by 80% to 99%

Eliminates manual intervention and reduces employees needed to execute task by 20% to 60%

Reduces average time to execute transactional processes by 60% to 80%

Decreases processing time by up to 300%with overnight / weekend processing

Build automated system interfaces without investment in IT architecture by 20% to 50%

Shift FTE focus from report generation to analysis by 30% to 60%

Reduce time for vendor fraud detection from days to minutes

AI can quickly provide financial and non-financial benefits that impact the most common organizational performance measures


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

of respondents report positive ROI from AI efforts

Median ROI from AI efforts17%

AI investment and ROI: Relative landscape of industries

Source: State of AI in the Enterprise, 2nd Edition, Deloitte

AI investments pay off—some more than othersIt’s raining returns


Achieving financial benefit

85%see a positive ROI from AI investment

Strategically important

76%say AI technologies are very or critically important to business success today

Facing challenges

42%cite implementation as a top three challenge; data and integrationwere also highly ranked

Source: Deloitte State of AI in the Enterprise, 2nd Edition, 2018

High level of enthusiasm for AI in TMT, but success can depend on execution


Deep learning

54%+19 points from 2017,

the largest increase

Machine learning

61%+4 points from 2017

Natural language processing

66%+10 points from 2017

Source: Deloitte State of AI in the Enterprise, 2nd Edition, 2018

Early adopters are creating strong AI foundations


ChallengeHow to achieve “best-in-class” in Finance in 3 years?

• Finance factory• Business Insights and Service• Real-time • Self-service• Talent

Putting it all together

SolutionA Digital Finance program with 4 key pillars:

• RPA/Cognitive Automation• Blockchain• Predictive analytics and visualization• Analytics CoE

Impact

Analytics COE established300K hours in Bill to Cash process automation70K delivered in the 1st year

52K hours savings, 100% NBA Compliance, AR improvement thru

automated emails and call scripts for collections

One-click, automated executive reports with

human sounding commentary

Other: Promotion effectiveness, Blockchain for settlements, CS chatbots, NLP for contracts

How Artificial Intelligence is Transforming the Financial … · 2019-03-22 · • Predictive...

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