**London**: Chief Financial Officers are increasingly adopting agentic AI in finance, drawing on past tech integration experience while addressing unique risks. Insights from MIT’s George Westerman highlight the evolution and necessary governance for successful implementation, emphasising alignment with business goals and proactive risk management.
Chief Financial Officers (CFOs) are increasingly considering the integration of agentic artificial intelligence (AI) into their financial operations, treating it similarly to other technological advancements their firms have adopted in the past, albeit with important adjustments to manage the unique risks presented by this emerging technology. Expert insights from George Westerman, a senior lecturer at the Massachusetts Institute of Technology (MIT) Sloan School of Management, highlight both the evolution and the implications of adopting agentic AI systems.
Agentic AI, though not yet universally defined, can be described as software capable of processing information, making decisions, and initiating actions autonomously. “The concept is not new,” Westerman noted in an interview with PYMNTS. He cited examples such as automated processes in Microsoft Windows and long-standing automated trading systems on Wall Street as precursors to today’s agentic systems.
What distinguishes current agentic AI from traditional automation is its ability to dynamically generate responses, adapt, and learn. Unlike rules-based bots which strictly follow pre-defined actions, agentic AI can engage in conversations with clients and manage unstructured data— a capability that traditional computing lacks. Despite these advancements, Westerman advocates for CFOs to apply familiar automating evaluation processes when integrating agentic AI. This includes identifying beneficial processes, recognising potential cost savings, and assessing both financial and reputational risks.
CFOs are urged to incorporate existing governance policies and risk frameworks into their evaluations of agentic AI technology while considering necessary revisions. “You should already have very strong governance and policy approaches to automation, and you’d want to apply those same policy approaches to agentic AI but also see where those policies may need to change,” Westerman advised.
The evaluation of the return on investment (ROI) for agentic AI follows a similar prudent approach. Niall Byrne, CFO of the Qatar Investment Authority (QIA), indicated during a World Economic Forum session that the organisation is investigating pilot projects with specific metrics to quantify AI investment returns. Byrne mentioned factors like adoption rates, data processing speeds, and employee productivity, emphasising the need to make informed investments.
Westerman further elaborated that while the adoption of AI is “expensive,” akin to other technology integration efforts, such as cloud computing, where costs can escalate with usage, careful consideration is vital. He outlined significant potential applications of agentic AI in the finance sector, which include:
- Interpreting unstructured data from various sources, such as videos, emails, and PDFs
- Automating routine tasks related to planning, control, and reporting
- Enhancing compliance efforts
- Underwriting processes
- Improving customer interactions
To ensure successful adoption, CFOs are advised to:
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Align agentic AI initiatives with business goals: Clearly define intended financial outcomes, ensuring AI investments correspond with overarching business objectives.
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Proactively manage risks: Identify risks involving data security, privacy, regulatory compliance, and financial accuracy, while also developing contingency plans for possible system failures.
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Invest in the right skills and address workforce concerns transparently: If job reductions are necessary, it is crucial to communicate openly with staff. Training employees to effectively use AI and fostering a collaborative environment are also essential. Westerman suggested that while it may not be necessary to recruit top graduates, having a core team knowledgeable about AI is beneficial, complemented by comprehensive training for the broader workforce on utilising AI technologies.
As businesses navigate the complexities of integrating agentic AI into their financial operations, these insights from industry experts provide a foundation for informed decision-making amid evolving technological landscapes.
Source: Noah Wire Services
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