AI risks: What every finance team should know

The finance and accounting world is rapidly changing with the advancement and adoption of artificial intelligence (AI). From automating routine tasks to uncovering deep insights, AI is revolutionizing the way finance professionals work. 

As we look towards the future, it’s clear that AI will become an indispensable tool for finance teams, transforming the roles and skill sets required for success.

While AI’s benefits for finance are significant, teams must also navigate risks and challenges. Here are some of the major risks that finance teams need to watch out for as they adopt AI technology.

Data Quality

One key risk of using AI in finance is data quality and governance. AI models are only as good as the data they’re trained on, so finance teams must ensure their data’s accuracy, consistency, and completeness. This requires robust data governance frameworks and master data management practices to ensure data is properly sourced, validated and maintained.

Data Validation

According to EY, interpretability and auditability are other critical challenges. Many AI models, particularly those based on deep learning, are “black boxes” — making it difficult to understand how they arrive at decisions. For finance teams, explaining and justifying AI-based decisions is essential for regulatory compliance and audits. This requires a focus on explainable AI techniques and rigorous documentation and testing of models.

Adaptation

Change management and upskilling are also significant hurdles. Implementing AI often requires significant changes to processes, roles, and ways of working. Finance staff may resist these changes or fear job losses, so extensive training and support is needed to build AI skills and adoption. CFOs and finance leaders must foster a culture of continuous learning and adaptability to ensure their teams can thrive in an AI-driven world.

Over-reliance

Finally, there are risks associated with overreliance on AI and lack of human oversight. While AI can provide powerful insights and automate tasks, it’s not infallible. Finance teams must maintain human control and judgment, particularly for high-stakes decisions. Regular monitoring and testing of AI models is critical to ensure they remain accurate and unbiased.

To learn more about the use cases, benefits and risks of incorporating AI technology into your organization’s finance function, download our guide AI in Finance: The Risks and Rewards.

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