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How Artificial Intelligence (AI) is Impacting the Accounting Industry

Posted by Alexander Hagerup on Feb 27, 2019 8:11:00 AM
Alexander Hagerup
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How Artificial Intelligence (AI) is Impacting the Accounting Industry

What does it mean when we use the word artificial intelligence or AI?

The following is an excerpt from the webinar, “Automating Outsourced Accounting: How Accounting and Bookkeeping Firms Can Prepare for AI and Machine Learning.”

According to Kai-Fu Lee, a Chinese venture capitalist, technology executive, writer, and an artificial intelligence expert, AI is the “pursuit of performing tasks usually reserved for human cognition.”

The most significant breakthrough to date with AI has been the effect of deep learning. Deep learning is part of a broader family of machine learning. With deep learning, networks are trained on huge amounts of labeled data. The networks acquire their knowledge or their understanding from being trained on previously labeled data.

The output from a deep learning network is a decision or a prediction. Examples of a decision or prediction might include:

  • “What words were spoken?”

  • “Is this fraudulent?”

  • “What type of cost is this?”

These outputs lend themselves very well to accounting as all transactions are labeled data. The output we’re seeking is a decision such as “what type of cost is this.”

Interacting with Artificial Intelligence (AI)

AI is here today, and the companies excelling and providing AI solutions like Vic.ai started developing this technology many years ago. Many of us aren’t even aware that we’ve interacted with AI.

Do you think you’ve interacted with AI? Through bank apps, customer support, social media feeds, targeted advertising, Alexa, and Siri, 84% of us have already used AI systems according to Pegasystems who surveyed 6,000 consumers. Surprisingly, only 34% of people believed that they had interacted with AI.
So while those numbers show how embedded we are in AI, we’re not always aware that we’re using it. Sometimes, it’s just running in the background.

AI is Like Electricity

So why is AI so important? Why is it everywhere? Much like humans learned how to apply electricity to nearly any task in their lives, like cooking, lighting up a room, or powering a train, AI can be applied and make a significant difference in nearly any domain. AI creates significant improvements in accuracy and efficiency, and that’s why it’s so relevant.

Some powerful applications where AI helps us make better decisions today include:

  • Diagnosing cancer

  • Loan applications

  • Finance and accounting

Today, AI is diagnosing cancer sometimes better than doctors. It’s also making better financial decisions. In several places, AI is outperforming humans. And there’s still more to come.

Impact of Narrow AI

We can compare the coming AI wave more or less in magnitude to the industrial revolution. But it’s moving a lot faster. What we have today is very far from human-level AI, and that’s important to understand. We don’t know when or if that will ever happen. The AI that’s being developed and used today is very narrow, and it's limited to single domain tasks.

However, most human work is single domain tasks, and AI can perform a lot of these single domain tasks with superhuman speed and accuracy.

There’s no doubt about it. Many of us don’t realize how much AI is already permeating our lives. If you use Netflix, Amazon, Google, Hulu, or Uber, all of these household names are driven by AI and machine learning.

We’re already starting to see the impact on the accounting industry. AI is very much changing the workflow. AI works 24/7, doesn’t complain, provides immediate value, and will contribute $16 trillion to worldwide GDP by 2030 (PwC).



How is artificial intelligence impacting your accounting or bookkeeping firm? Share your thoughts in the section for comments below.

To learn how accounting and bookkeeping firms can prepare for AI and machine learning, watch the webinar recording on “Automating Outsourced Accounting: How Accounting and Bookkeeping Firms Can Prepare for AI and Machine Learning.”

 

Automating Outsourced Accounting || How Accounting and Bookkeeping Firms Can Prepare for AI and Machine Learning [Watch the Recording] 

 

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Topics: Artificial Intelligence

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