According to a comprehensive report released by FP&A firm Datarails and a press release reviewed by CFO Dive, a significant majority (57%) of CFOs anticipate that their finance departments will shrink by 2026 due to the adoption of AI in the CFO's office. This finding comes as a result of a survey conducted in August among 270 CFOs at U.S. companies with annual revenues between $50 million to $999 million.
AI's Role in Finance Departments
AI-powered algorithms and systems possess the remarkable ability to execute repetitive tasks with exceptional speed and precision, thereby eliminating the necessity for manual intervention. For instance, as Jonathan Marciano, the vice president of brand and communications at Datarails, stated in an email, they can take over tasks such as data entry. Our survey reveals that CFOs specifically believe that the financial processes most primed for AI disruption are financial reporting, analytics, risk assessment, accounts receivable, and invoice and billing. 1: The efficiency gains brought about by AI have led many CFOs to reevaluate their staffing needs. While a significant portion (57%) expect a reduction in headcount, it's not a straightforward case of layoffs. Instead, the increased automation allows for more streamlined processes, potentially reducing the need to hire new personnel to handle routine tasks. 2: This trend is evident across different sectors. In finance, banking, and insurance, 59% of respondents predict reductions, followed by tech and software at 57%, and health and pharmaceuticals at 44%. This indicates that AI's impact is widespread and not limited to a specific industry.Sector-Specific Insights
1: The finance, banking, and insurance sector shows a higher propensity for headcount reductions due to AI adoption. This is likely because these sectors deal with a large volume of data and repetitive tasks that are highly amenable to automation. As a result, CFOs in these sectors are more likely to embrace AI to enhance efficiency and reduce costs. 2: On the other hand, tech and software companies also anticipate a significant impact. With their focus on innovation and data-driven processes, AI can help them streamline operations and gain a competitive edge. However, they may also need to invest in data engineering and AI prompting skills to make the most of AI technology.Job Shifts and Demands
While some jobs may decline due to AI, there is also an opportunity for new job roles to emerge. Positions involving manual, easily automated tasks are likely to see a decrease, but there will be a growing demand for those with data engineering, AI prompting, data architecture, and master data management skills. 1: Verifying the output of AI will become a crucial task that requires experience and skill. Those who can ensure the accuracy and reliability of AI-generated data will be in high demand. Additionally, advanced skills such as storytelling, communication, leadership, and business partnering will also be valued as CFOs seek to leverage AI to drive strategic growth. 2: This shift in job requirements highlights the need for continuous learning and upskilling among finance professionals. To stay relevant in the age of AI, individuals must adapt to the changing landscape and acquire new skills to complement the capabilities of AI systems.Investment in AI
Regardless of the potential impact on the workforce, finance leaders are showing a strong commitment to AI. The survey found that 70% of CFOs are planning to invest in AI for the CFO's office in 2025. AI has also emerged as the top priority when choosing new software, with 21% of CFOs considering AI features as their top concern, followed by "price" (16%) and "analyst recommendations". 1: This indicates that CFOs recognize the potential of AI to transform finance departments and drive business value. By investing in AI, they aim to improve efficiency, enhance decision-making, and gain a competitive advantage in the marketplace. 2: However, it's important to note that the implementation of AI requires careful planning and management. CFOs need to ensure that the benefits of AI outweigh the costs and that the technology is integrated seamlessly into existing processes.