How AI can transform the finance function

Last week, McKinsey released their latest podcast and the title caught my eye:

Transforming to an AI-powered finance function

It’s a really interesting chat between OpenAI CFO Sarah Friar and McKinsey senior partner Lareina Yee on the podcast At the Edge. Listening to it (and there’s also a transcript), here are a few highlights of Sarah’s thoughts, beginning with the way that finance typically works.

Today, there’s still so much in the finance department that is the look back, not the look forward. I hope in five years we’ll look back at how we do things today and feel like today’s methods are so outdated. I want to be able to look at my team and see that everyone is in that mode of forward-thinking and insight-driven work, and that a lot of the work we do today becomes rote work that gen AI does for us.

So, what can AI do for finance?

Investor relations is another good example of where we’re using gen AI in the finance function. We just finished a financing round, and in the middle of a deluge of in-bound diligence questions, we were feeling underwater, so we built an investor relations custom GPT. We fed it the knowledge of all the diligence questions we had answered up to that point, and we fed it our management presentation. We also told it not to look externally for answers, as there is a lot of incorrect information published about OpenAI. And now we have an investor relations GPT that allows us to answer questions in seconds that previously took hours or a whole day. 

She then moves on to the fact that finance needs to integrate with technology.

In finance, it’s very useful to have someone who can write code or help with SQL [structured query language] queries, but that is not a common skill set in finance. Instead of asking for help from our technical organization, we can now just ask ChatGPT to assist in writing that SQL query. This has really advanced our team from number crunching to being a better business partner.

Beyond that Sarah, unsurprisingly, talks about their customers, many of which are banks and fintechs.

Morgan Stanley is a great example of a platform that’s organizing their huge knowledge base, particularly in areas like research, and using it to automate operations. They use it to do a better job of getting information out to clients, by generating summaries of video meetings and drafting follow-up emails. With that kind of automation, wealth managers can focus more on customers, rather than having to think first about the steps they need to take to send customers follow-up emails.

Klarna is another. They’ve been very loud and proud about how their new digital-shopping system built on our API is helping customers find the right products at the best prices, and also how much they’re saving on customer service. And Mercado Libre was at our event last week, so I got to hear their CTO say to the whole crowd how they’re using ChatGPT to autonomously manage customer service decisions. That involves about $450 million annually on our platform, so that’s a lot of money that is being touched by our technology, and also cost savings.

Square is yet another. Their customer service team has one of my favorite objectives: “turn questions into commerce.” So you have an inbound question from a customer who needs something fixed, but you also use that interaction to provide them with added value that helps their business thrive and bring in more revenue. The more we think about customer service as moments where you’re going to help the customer do even more, it’s a win–win. For businesses, AI is already helping do this.

I also thought some of her personal comments about how AI could help in keeping the team together were interesting.

When you’re trying to build community and trust, communication is everything. AI can really help with reducing miscommunication … we used OpenAI’s API to help rephrase remarks on our platform that could be perceived as hurtful. We found that popping up a kindness reminder and rewriting a potentially offending message with gen AI could be powerful.

If you haven’t heard the podcast, it’s well worth it.