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The Role of Autonomous Finance in the Era of Automatic Civilization

Sanjeet Singh1*, Geetika Madaan2 and Jaskiran Kaur3

1Research Centre and Faculty of Management Studies, Marwadi University, Rajkot, Gujrat, India

2Research Centre, Marwadi University, Rajkot, Gujrat, India

3Division of Academic Affairs, Lovely Professional University, Phagwara, India

Abstract

Financial and accounting process management can be demanding in terms of both time and mental energy. Manually performing tasks like data mining and discovering financial facts takes a lot of time and effort. Long hours spent staring at spreadsheets and databases may cause accountants to experience mental fatigue. When automation can simplify the lives of your financial team members, it makes no sense to have them waste their time with inefficient manual operations. If we or our team are still manually copying and pasting information across Excel spreadsheets, then we need to get out of the 1990s as quickly as possible. We have officially entered the era of “automatic civilization.” Instead of spending time on commonplace, repetitive chores, organizations can streamline their operations by integrating data-driven insights and cutting-edge analytics into their autonomous financial systems. In the chapter, author aims to uncover the role of autonomous finance in the era of automatic civilization. The term “autonomous finance” refers to a method of handling financial transactions and management based on data or algorithms. Due to the fast-paced and competitive nature of the modern corporate world, innovative strategies have surpassed conventional ones. Enterprises need to be nimbler and more forward-thinking if they are to stay up with the times and enhance their operations. Automation of financial procedures can save a lot of time and effort, as finance is one of the most complex and time-consuming aspects of any firm.

Keywords: AI, autonomous finance, accounting, machine learning, robotics, process automation

1.1 Introduction

The emergence of “automatic civilization,” along with other technological breakthroughs [1], has made a huge difference in the way we deal with money in the real world. One of the most significant developments changing this is autonomous finance, which is transforming how budgets are managed in a big way.

The onset of the “automated civilization” period has brought about a significant change in the way individuals around the world manage their money. Free banking is a crucial component of this change [2]. This new technology makes it is easier for people to keep track of their money, transforming the financial world. For the most part, autonomous finance means letting AI along with other computerized decision-making tools handle your money. Managing money involves various tasks, such as automatically investing in the stock market, managing more complex accounts, and selecting the best ways to handle risk [3–5]. Organizations can use the tools for monitoring data and making market predictions that come with autonomous finance to make better, less risky decisions.

Autonomous finance and other AI-based technologies, such as predictive analytics, can help businesses excel in the present-day data-driven market. Autonomous finance has initiated an entirely new phase in financial management. Computers can now perform complex tasks that previously required human assistance.

1.2 The Concept of Autonomous Finance

Autonomous finance refers to the capability to perform routine monetary tasks with little or no oversight from a human operator. It automates financial procedures using AI and machine learning, leading to greater productivity and precision. Budgeting, investing, and managing risks are all part of this [6].

Forrester defines the term as algorithm-driven financial services that make decisions or take action on a customer’s behalf.

In a nutshell, autonomous technology can perform its intended tasks without any assistance from a human operator. These technologies are like us in that they continually improve by taking in new information from their surroundings and applying it to their decision-making [7].

1.2.1 Autonomous Finance: The Technology and Factors Driving Its Widespread Deployment

Cloud computing, RPA, advanced analytics, NLP, and AI are the engines that propel the field of autonomous banking [8]. Finance analysts’ productivity is boosted by the seamless two-way communication between humans and computers enabled by the program. Autonomous technologies are more common, with artificial intelligence (AI) being a prime example. Autonomous intelligence, a more advanced kind of AI, can make decisions and act without any human input.

Finance departments often follow the path shown in the following figure to achieve complete autonomy. Some companies have achieved 80% autonomy with AI-assistance, but the vast majority are in the 0–40% range, moving towards the 60% autonomous mark with RPA, AI, and analytics tools [9]. However, we have not yet reached a point when the department is entirely independent.

1.2.2 CFO’s Function in Autonomous Finance

The chief financial officer’s responsibilities in an autonomous financial system now extend beyond the conventional realm of finance to include managing and optimizing autonomous financial systems [10]. In autonomous finance, the Chief Financial Officer (CFO) plays a crucial role in making decisions about technology investments, monitoring data quality and integrity, and mitigating risks related to automation.

Figure 1.1 Finance transformation journey.

(Source: Authors’ own compilation).

Adapted from [10].

CFOs are responsible for managing risks related to data privacy and security, maintaining compliance with legislation, and implementing and integrating new technology into autonomous finance systems. The CFO also needs to work with other division heads to ensure that the company’s financial systems are aligned to achieve its overarching goals and strategy [11].

With the rise of autonomous finance, the chief financial officer’s responsibilities are shifting from being a mere custodian of financial data to being an active participant in business strategy. The ability to analyze data in real-time is essential for chief financial officers (CFOs) who want to guide their companies towards strategic growth.

1.2.3 Motives to Switch to an Autonomous Finance Structure

With the advent of autonomous finance, future financial services will be safer and more convenient than ever before. It is a revolutionary new approach to wealth management that offers various advantages over the status quo [3–6].

First, autonomous finance boosts productivity. By automating the analysis of transactions and optimization of investments using artificial intelligence and machine learning, you can potentially save time and effort in budgeting.

It uses state-of-the-art data encryption technology to enhance the security of financial activities. This protects your financial information from unauthorized parties and keeps it secure from harm. Finally, autonomous finance allows you to manage your finances whenever and wherever is most convenient with you [11].

Autonomous finance, as a whole, might usher in an era of “automated civilization” with entirely new standards for the security and convenience of personal banking. Keeping up with the competition will be difficult for any business that has not automated its processes to improve efficiency. It is crucial for your business to prepare today so that it can reap the benefits of autonomous finance in the future.

Some of the most important benefits of making financial processes fully automated are as follows:

1. Enhanced effectiveness
2. Reduce expenses
3. Boost output
4. Superior Assistance to Clients
5. Marketable Distinction

Figure 1.2 Benefits of autonomous finance.

(Source: Authors’ own compilation).

Adapted from [11].

• Enhanced effectiveness
  Automated solutions expedite operations, free up resources, and reduce human error.
• Reduce expenses
  Through more efficient use of available resources, autonomous financial technology enables firms to save money in areas like customer service, reporting, and more.
• Boost output
  Your financial staff will have more time for high-value, strategic work thanks to the automation provided by autonomous finance solutions.
• Superior Assistance to Clients
  The finance department will have more time to devote to high-value operations and strategic planning thanks to the automation of routine, repetitive work enabled by autonomous finance technology.

  Eighty-nine percent of financial service executives surveyed by Salesforce agreed that industry leaders who adopt autonomous finance early would establish new standards for client satisfaction.

• Marketable Distinction
  CFOs stand to gain an advantage if their operations are fully automated. There is more time to devote to high-value activities such as customer or investor relationship management. Finance leaders can also expand to new markets faster, meet regulatory requirements accurately, and manage...