AI is a potent tool for finance teams to unleash. In a snapshot, IBM underscores how the tech can impact the financial sector. They outline some of AI’s powers, including increased automation and efficiency, big data analysis, predictive analytics, and risk management.
Looking at the practical applications, AI has the potential to revolutionise how charities look at and act on financial information. But integration may still be challenging. Beginning with policy implications we delve into approaches and benefits to integrating AI.
Be clear on why integration matters
AI still strikes fear and uncertainty into the workforce and communication is the way to resolve that. We recommend creating an AI policy that determines who, what, when, and how it should be used in finance.
Contained in the policy are examples of how the finance systems and processes reap the benefit. Having a clear rationale for how AI solves problems may help integrate the tech. Don’t forget to include a section on ethics – this assures staff when AI will not be deployed.
The AI Journal also suggests who should be leading: “By enabling those who are directly impacted by AI to lead its operationalisation, businesses can create a more inclusive, transparent environment that encourages everyone to engage with and understand AI technologies.”
From this perspective, charity finance managers should be the teams explaining and directing the changes. This integration approach ensures that familiar staff are showing colleagues what the improvements actually mean from day-to-day.
Approaches to integration
Integrating the selected AI tech can be a challenge from both an internal and external stakeholder perspective. For charity finance workers, AI can be intimidating. Having the technical knowledge and experience may be one thing, but staff may also fear redundancies.
To truly integrate AI, it’s got to be inclusive. How AI can serve everyone means enabling all to have access. Eliminating barriers to coding removes hesitancy around integration. Forbes emphasises directness about how AI impacts work. Clear directions on how it does not replace the work force but enhances roles, creativity, and decision-making are key to implementation.
What the public thinks about AI is also part of the integration task. CAF’s Head of Research Alex Plumb writes that: “Our research showed that high-value donors are the most positive about charities using AI but also the ones who will pay most attention to what charities say publicly about it.”
Taking CAF’s research forward, integrating AI means letting audiences and stakeholders know what you are doing. Being transparent around how it is being used by the finance department is crucial to adopting the tech and to retaining donations.
Transformation in charity finance
Charity finances are poised to benefit from the speed of operations and enhanced decision-making powers. Incorporating financial management systems which already deploy AI is overall, quite palatable. Users are directly able to witness how AI can automate manual and mundane tasks. There’s likely limited explanation required from an integration perspective.
Sage Intacct, one of the most commonly used systems to generate statements and manage money has integrated AI. The platform’s accounts payable function intelligently matches up invoices with vendors and helps identify errors and duplication. In general, the added processing power saves time for the accountant by eliminating manual tasks.
Real time decision-making
AI improves financial visibility by providing real-time data. The potency here is two-fold. Finance managers can examine performance at the moment since AI extracts the data intuitively without waiting for month or quarter end computations.
The Charity CFO brings home the point: “AI can provide real-time assessment of your organization and evaluate the performance of financial or program goals.”
From this perspective, teams can more accurately forecast what income may be received at any given time. Better predictive capabilities mean charities can plan for success.
Extracting trends from AI insights
Adding AI to the charity fundraising process could boost income. The tech has the ability to analyse large chunks of data and extract trends. As a result, finance teams can evaluate donor trends and draw conclusions.
Charity Village say AI models can comb through historical data and extract trends in donor groups. AI driven insights may distil trends in existing donors or highlight those that are at risk of not coming back.
The IFC Review suggests an additional advantage. AI programs that analyse online behaviour may also be able to profile potential donors visiting the charity site. The programs could take behaviour and then suggest fundraising opportunities that fit with identified preferences.