Prioritizing benefits of AI adoption in finance- An application of fuzzy analytic hierarchy process

Introduction

Industry 4.0, alternatively referred to as the Fourth Industrial Revolution (4IR), exert a pervasive influence on almost every facet of our daily lives. It impacts human-technology interactions and alters how and where work is conducted (Simón et al., 2024). Advanced technologies such as artificial intelligence (AI) and robotics are extensively used in finance and accounting. AI technology corresponds to the emulation of human intelligence by machines or the capacity of machines to perform various tasks at a level comparable to that of human intelligence (Jarrahi, 2018). The company\'s finance and accounting domain uses AI solutions to automate processes, provide real-time insights from large data sets for decision-making, ensure constant and continuous employee and customer engagement, and carry out human tasks in providing services.

According to Huang and Rust, (2018), AI-driven systems with human intelligence can perform various types of tasks, such as mechanical, analytical, intuitive, and empathetic. Mechanical intelligence is related to the capability of automating routine and repeated activities. Analytical intelligence is the ability to process vast troves of information and data for problem-solving, logical reasoning, and learning in order to execute predictable, systematic, consistent, and complex tasks. Intuitive intelligence includes experience-based holistic thinking, understanding, creativity, and effective adaptation to novel situations, with a high degree of resemblance to human reasoning capacity. Empathetic intelligence refers to the capacity of machines to perceive and comprehend other people\'s emotions and to feel or behave as if they have human-like feelings. These sophisticated skills are gained from specialized knowledge, expertise, and training in cognitive thinking, and finance professionals, including financial analysts and accountants, heavily use all four intelligences.

Finance and accounting are reported to be the best areas for using AI due to the substantial volume of structured and unstructured data generated and consumed. Finance is considered a promising frontier for AI innovation because of the way AI revolutionizes companies\' processes and services. A new finance and accounting domain powered by AI technologies can automate accounting and financial reporting, effectively manage assets, analyze risk, and offer financial advice. AI enthusiasm in the finance and accounting domain is currently at its peak, mostly due to the growth in data and collapsing computing costs. AI in the field of finance has garnered significant research interest for many decades (Cao, 2022). The application of AI in traditional financial markets, financial operations, trading, banking, insurance, risk management, compliance, regulation, and marketing has evolved into the emerging field of fintech (financial technology). This AI-empowered advanced fintech facilitates accounting, auditing, blockchain, smart digital currencies, payment systems, lending, wealth management, asset management, risk management, and regulation management.

However, the existing academic literature on AI lacks comprehensive coverage of its benefits in the area of finance and accounting. Based on this identified gap, we formulate a new research question: What are the benefits of using artificial intelligence (AI) in finance and accounting? Therefore, this study aims to address this research gap and contribute to the existing body of knowledge by exploring the benefits of AI in finance and accounting through a qualitative approach and prioritizing the benefits using fuzzy logic, specifically the analytical hierarchical process (AHP) method.

Review of literature

A comprehensive review of the extant literature, published articles, and the application of text mining and thematic analysis techniques identified the following benefits of AI in finance and accounting:

• i. Enhanced operational performance: AI has the potential to underpin substantial productivity growth (Raisch and Krakowski, 2021) and enhance efficiency and effectiveness, thereby empowering businesses to do more with less and to generate higher-quality outputs. Robotic Process Automation (RPA) is a driver of digital transformation that streamlines business processes by automating workflows. It elevates audit quality and financial reporting transparency and optimizes budget and strategic resource allocation. AI techniques automatically detect phishing, strengthen cybersecurity, and mitigate cyber risks (Zeadally et al., 2020).
• ii. Value creation: It uncovers new and previously unrealized opportunities to generate higher revenue and shareholder returns (Åström et al., 2022). AI enhances the speed of operations and ultimately leads to substantial time savings. Human-AI teaming augments human capacity and harnesses the potential value that AI technology can create for the enterprise (Simón et al., 2024). This fosters transformation, growth, and an increase in market share. Hence, AI creates value for establishing sustainable business models. Predictive analytics and automated inspections enhance quality control and optimize waste management processes to improve margins and profitability.
• iii. Cost reduction: The implementation of AI leads to lower costs owing to efficiencies generated by higher automation, reduced human error rates, cost analysis, and optimized resource utilization (McKinsey, 2021). Organizations have the potential to access wider customer segments outside their traditional limits and swiftly scale new solutions. This strategic approach reduces customer acquisition costs and is cost-effective for serving customers. Through predictive maintenance, the company can reduce maintenance and utility costs. A company can also deploy AI to provide insights into debt collection strategies to enhance recovery rates. This enables companies to reduce financial loss and reputational damage through early fraud prevention and ultimately increase cash flow.
• iv. Improved decision-making: One of the main advantages of using AI in the finance domain is the improved decision-making processes (Königstorfer and Thalmann, 2020). AI models effectively automate and augment decision-making by utilizing vast amounts of data. AI\'s higher analytical capacity provides real-time actionable insights for a faster, more accurate, and informed decision-making process, scenario, and response planning. This allows employees to dedicate more time and energy to strategic and creative tasks (Jia et al., 2024). Companies use AI-enabled technology to detect biases in other AI models and mitigate biases caused by human subjectivity. This may influence decision-making processes and, ultimately, accomplish business objectives. AI models can quickly process and summarize complex or lengthy texts in multiple languages by providing tailored key points, which helps preserve and manage an organization\'s knowledge base. AI-enabled automated decisions can avert potential financial crises through prompt risk assessment, financial scenarios, market sentiment analysis, and early warnings.
• v. Sustainable competitive advantage: AI is becoming a crucial strategy for leading organizations to outperform their peers. Similarly, the converse is equally true. A company that fails to effectively integrate AI capabilities is left behind. AI empowers companies to create novel products and services that better match customers\' unique needs, upgrade existing ones, and invent new business models by analyzing market trends and competitors (Babina et al., 2024). Companies that leverage AI-enabled technology to deliver intelligent servicing, personalized solutions, and superior experiences stand to increase consumer satisfaction and loyalty (Kriss, 2014). AI ensures that instant human-like support is accessible round the clock ($24\\times7$ availability). It helps to cater to a wider range of underserved clienteles and mitigate information asymmetry (Mhlanga, 2020).
• vi. Colleague experience: AI\'s rapid drive for integration into organizations creates a collaborative environment in which humans and machines collaborate closely as virtual colleagues to perform tasks (Raisch and Krakowski, 2021). It decreases workload, makes the job easier by responding to complex questions, and provides quick expert advice. Simón et al., (2024) found interactions between human and AI: achieving compatibility, nurturing trust, and facilitating mutual expansion of knowledge. AI Robots can perform every task endlessly without breaks, thereby eliminating the risk of human injury in hazardous or dangerous environments. Hence, there is zero risk for humans.

Research Methodology

A qualitative research approach was used to analyze various news and articles from reputed newspapers and journals on AI in finance and accounting. Text mining and thematic analysis were conducted on the collected texts to identify themes indicating AI\'s benefits in finance and accounting. The different benefits of AI in finance and accounting are depicted using distinct keywords or items. These items were included for prioritization using the fuzzy analytical hierarchical process (FAHP) method (Buckley 1985; Saaty, 1980) with the help of 16 industry experts and finance professionals.

Results and discussion

This study attempts to prioritize the benefits of using AI in finance and accounting from the perspectives of industry experts and finance professionals. \"Sustainable competitive advantage\" with 26.29% global weight is the most important benefit for industry experts and finance professionals when using AI for companies in the finance domain. This was followed by \"improved decision-making,\" with 24.48% global weight, and was identified as the second most significant benefit. The third most considered benefit is \"enhanced operational performance,\" with 19.81% global weight, which is further followed by the \"cost reduction\" and \"value creation,\" with 11.73% and 10.67% global weights, respectively. However, \"colleague experience,\" with 7.65% weightage, is found to be the lowest priority for industry experts and finance professionals when they choose AI for companies in the finance and accounting domain. As per the approach, the ranking we have obtained is in the order of \"sustainable competitive advantage > improved decision-making > enhanced operational performance > cost reduction > value creation > colleague experience.\"

As depicted in the study, \"improve efficiency, accuracy, accessibility and productivity,\" with a global weight of 9.57%, is the highest demanded benefit by the experts. Further, \"automate and augment decision-making, and free up time for the strategic role,\" having 8.75% global weight, is regarded as the second most significant benefit by the experts. \"Personalized and superior customer experiences,\" with 8.17%, is third in preference given by the experts. This is followed by \"automatically summarizing lengthy documents and aiding retrieval,\" which has a 7.57% global weight.

Conclusion

In an intelligent era, company management, industry experts, and finance professionals are proactive. They integrated new technology after considering its perceived benefits. This study explores the preferences of industry experts and finance professionals in terms of perceived benefits. In order of relative weights and ranking, the main benefits of AI in the finance and accounting domain are sustainable competitive advantage, improved decision-making, enhanced operational performance, cost reduction, value creation, and colleague experience. The study\'s results conclude that AI enhances a company\'s efficiency, accuracy, and accessibility and accelerates productivity. AI enables process automation and augments decision-making by providing real-time insights through the processing of large data. AI-powered technology can significantly improve the decision-making process, mitigate risks, and provide valuable and actionable insights that might otherwise remain hidden. AI can quickly categorize and summarize large volumes of documents, making it easier to organize and retrieve information. This allows employees to dedicate more time and energy to strategic and creative work. Companies that leverage AI-enabled technology to deliver intelligent service, personalized solutions, and superior experiences strengthen consumer relationships and loyalty. It improves scalability, minimize human errors, and reduces costs. Overall, they tend to generate higher revenue and shareholder returns.