On that note, let us look at the different segments of the financial planning and analysis (F&PA) industry that are experiencing a revolution propelled by AI:
The core offering of any AI solution rests in its ability to methodically analyze data and generate relevant insights that are otherwise invisible to the human eye. Any form of analysis becomes all the more convoluted when it involves multiple variables and dynamic parameters.
However, AI remains unperturbed by changes and manages to recognize patterns, analyze cash flows, flag suspicious activities and detect fraud. As a result, businesses can use it for various applications ranging from budgeting to transaction validation to credit scoring and more.
Our company's marketplace, for instance, offers a text analyzer tool that can process long and detailed news or financial articles and offer a snippet containing the core extracts. Similarly, the asset summary generator can help you analyze the reasons behind stocks' movements.
Another way how AI is helpful in analyzing different asset classes is through providing sentiment analysis. AI tools are renowned for their ability to provide accurate sentiment analysis. This is helpful for investors who are momentum traders and are interested in investing in a stock that has an improving sentiment.
Forecasting has proven to be a highly sought-after quality throughout the F&PA market, and AI makes it possible with its data-driven approach. Hence, it should come as no surprise that predictive analysis is one of the most well-known and well-loved limbs of AI in F&PA.
It finds widespread applications across different verticals, ranging from predicting customer behavior to forecasting project spends. These can even power financial advisory tools that may calibrate spending habits based on lifestyle indicators. Similarly, it can act as the north star for intraday traders to time the market and take actions like wait, increase position or withdraw depending on their risk appetite, opening and closing prices, the possibility of profit/loss, etc.
For instance, an AI is used to make revenue projections. This is especially helpful for investors who are investing based on earnings announcements. AI that can largely accurately predict future revenue can be invaluable for investors.
While analysis is oriented to the present conditions, forecasting helps with future predictions. And planning acts as a bridge that aligns the two states.
AI can help companies and individuals draw a practical road map that connects their current state to their future aspirations. Say, it can power robo-advisories that guide customers on investments to reach their retirement or financial independence goals. Similarly, AI can help businesses factor in any exigencies that may impact the budget of any project and how to tackle the same. The actionable inputs offered by AI ensure that the planning process follows the shortest course while realizing objectives.
For example, an exposure analysis tool can generate a list of assets that are susceptible to certain market exposures, which can help investors in planning their portfolio. The tool can answer questions like how Brexit affects different asset classes. This can be useful in understanding how exposed your portfolio is to a certain event like Brexit.
Even though data is helpful in many ways, an excess of data can prove to be overwhelming. High-volume data can paralyze decision-making or delay it to the extent where companies miss out on capitalization opportunities.
Fortunately, new-age AI applications make use of natural language generation (NLG) to help businesses cut through the noise and get to the meat of any report. As an illustration of the same, GenesisAI offers an array of tools and features that can process reports to offer credible insights through asset summary generation, text summary creation, report translation, sentiment analysis, and more! Hence, you can use it to collate and visualize information in the most digestible forms.
AI tools provide great summaries of various news and articles and allow investors to compare financial projections from different sources — for example, comparing predictions made by various analysts regarding the companies' revenue.
AI is lending direction to robotic process automation (RPA) bots that can automatically perform rule-based and recurring tasks without manual intervention. Gartner states that a single bot can displace as much as 30 times the work of a human FTE, which can be a boon considering that F&PA can be extremely labor- and resource-intensive.
To put this gain in perspective, Gartner goes ahead to quantify it monetarily to highlight that RPA costs one-third of the cost incurred for employing offshore staff and one-fifth of the cost for onshore employees. Most importantly, RPA translates decisions into the realms of real-time action that will improve your bottom line.
The F&PA market is a hotspot for AI-led technological innovation. Companies can accordingly deploy AI solutions to explore the various drivers for their business, create accurate forecasts, enhance real-time decision-making and improve ROI. With such loaded benefits, what more could one want?