Future of Finance

Powered by Intelligent
Automation (RPA and AI)

ACPACI 35th Annual National Convention

Aldie P. Garcia, PwC Partner

September 2019
 Today, the
world is in
beta… are you
ready?
Emerging
Technology is
Everywhere

THE WORLD IS IN BETA – PLAY VIDEO

PwC 2
Our world is rapidly changing

Tech giants are transforming the

Customer expectations are higher
market with unending digital
than ever before
innovation

There is a premium on making the

Machines are doing the work of
right strategic choices and investing
humans more and more…
to build differentiated capabilities

PwC
 Companies
will spend
$3.8 trillion
on Emerging
Technology
in 2019

Source: Gartner
PwC
We narrowed down to areas that matter: PwC globally
screened 250+ technologies down to 8 – that we see having
the biggest business impact right now

Artificial Intelligence Augmented Reality Blockchain 3D Printing

Simulation of human Immersive technology A digital ledger Additive manufacturing
intelligence by machines

IoT Robots Virtual Reality Drones

Network of connected devices Simulation of human tasks Immersive technology Mobility without human control
and sensors

PwC
8 – PLAY VIDEO
CEOs have admitted they are lacking investment in many of
these technologies and their related skills

Source: PwC 2017 Digital IQ Survey

PwC
30 years from now
the best CEO
could be a robot”

Jack Ma
Chairman Of Alibaba
7
Artificial Intelligence is growing and is here to stay -
It will impact all geographies

Global Total Economic Impact of Artificial Northern Europe

Intelligence (US$Trillion)
Total impact:
9.9% of GDP
140
(1.8 Trillion)
North America
130 China
With AI Total impact:
Total impact: 14.5% of GDP
120 26.1% of GDP
Southern Europe (3.7 Trillion)
(7.0 Trillion)
Total impact:
110 11.5% of GDP
(0.7 Trillion)
Baseline
100 Developed Asia
Total impact: South America
90 10.4% of GDP
Total impact:
GDP 2030 impact: (0.9 Trillion)
5.4% of GDP
80 $15.7tn Africa, Oceania, & (0.5 Trillion)
Other Asian Markets
GDP 2030 %
70
impact: 13.8% Total impact:
5.6% of GDP
60 (1.2 Trillion)
2016 2018 2020 2022 2024 2026 2028 2030

PwC 8
Elon Musk Mark Zuckerberg
CEO of SpaceX and Tesla People who are
CEO of Facebook
naysayers and try to
drum up these
doomsday scenarios…
it’s really negative and
Until people see in some ways I actually
robots going down think it is pretty
the street killing irresponsible.”
people, they don’t
know how to react,
because it seems so
ethereal.”

PwC
 Is technology taking your JOB?

94% Probability Robots Will Take Over Jobs In The Next 20 Years (1=Certain)
Telemarketers 0.99
Accountant and auditors 0.94
Retail salespersons 0.92
Technical writers 0.89
Real estate sales agents 0.86
Word processors and typists 0.81
Machinists 0.65

Chance that Commercial pilots

Economists 0.43
0.55

accountants and Health technologists

Actor
0.4

auditors will be out

0 .3
Firefighters 7
0.17

of jobs in the next

Editors
0.06
Chemical engineers

20 years
0.0 2
Clergy
0.008
Athletic trainers
0.007
Dentists
0.004
Recreational therapists
0.003
Source: "The Economist, The future of employment: how susceptible are jobs to computerisation?"
PwC
 Disruptive business
models

Digitalisation
Finance in a and Big Data

saturated markets
more and more

Political & social

Competition &
challenging world

instability
Increased
pressure on
CFO
Volatility and new demands
require the Finance function Demand for better
to reshape the future model business support

Regulatory
environment

PwC 11
The future finance function is focused on the business and will
increasingly rely on real-time insight and decisions

Current State Future State

The “Trusted” Digital Workforce
Siloed and cumbersome business with a “Data-Driven Intelligent Enterprise”
greater focus on manual interactions and B2B/B2C focus – demand for real-time services
transaction processing Artificial Intelligence throughout the value chain

+ Deep Learning

Insight + Natural Language Processing Insight & action

& action
+ Machine Learning

Reporting & + New Tech: IoT, FinTech, ‘X’-Tech Reporting &

compliance Workforce
compliance
+ Analytics Transformation –
Move up the value
chain
Automation… is the catalyst to set the foundation and
Transaction create capacity to safely adopt advanced technologies
Transaction
processing processing
Operating Model
Governance, Risk, Control, Cyber
RPA
Operational Excellence
Workforce Transformation

PwC 12
As PwC we believe IA will enable Finance to become a Key
Strategic Partner in the Intelligent Enterprise of the future

Finance need to analyse digital trends with themselves and

4. Intelligent Enterprise
developed a target and vision for the future. The goal is to act,
• IA will enable Finance to become a
not react and develop a common vision. Key Strategic Partner to theEnterprise
Upon this foundation new opportunities can be identified and as • Finance will become the co-pilot in the
context of strategic development and
a result a newly formed roadmap can be developed that appreciated as a business partner for
identifies the specific for the years to come. operational functions

3. Cognitive Enterprise • Standard processes have been fully

2. Automated Enterprise
• Finance analysed digital trends with
themselves and developed a target
1. Traditional Enterprise
and vision for the future
• Finance is spending time on manual
• Finance will be the driver for building
and siloed tasks
the center for analytics
• Budgeting cycles >2 months or
• Information from various sources are
forecasting cycles >7 days with high
combined in real time
variance to actuals
PwC
automated, finance have gained time
• The planning and forecasting has and capacity to consider and work with
been automated to the highest analytical related questions
degree possible with modern
• Real-time learning and decision
statistical methods and big data
making leveraging interactive
• The forecast preparation is done by intelligence
a push of a button and finance is
able to focus on the development of
new insights
• Real-time learning and decision
making leveraging interactive
intelligence
13
 50% reduction in headcount Daily or real-time settlement
/ + capacity of AP &AR

What do next
Elimination of manual Emergence of data over
generation processes process

operating
models look
like? Manual labour focused on
exceptions only
Embedded compliance
and control

Automated reporting and Elimination of shared services

continuous audit and FP&A outsourcing

PwC 14
 New Intelligence Ahead
Mind and Machine working together – Digital Workforce

PwC
Forms of Intelligent Automation
Machine
Learning
Machine learning is just one topic area or sub-
field of AI. It is the science and engineering of
making machines “learn”. Machine learning
focuses on finding patterns in data and using
those patterns to make predictions.
Speech
Recognition
Speech recognition is the technology bywhich
sounds, words or phrases spoken by humans
are converted into electrical signals and
assigned meaning. Each human voice is
different, and identical words have different
meanings if spoken with different inflections
and contexts.
PwC
Deep
Learning
Deep learning is actually a type of machine
learning that uses multi-layered neural
networks to learn. There are other approaches
to machine learning, including Bayesian
learning, evolutionary learning, and symbolic
learning.
Swarm
Intelligence
Swarm intelligence is all about the collective
behaviour of self-organised systems to solve
problems and is inspired by examples from
nature (birds, ants, bees, etc.). Recent
research is focused on multiple simplerobots
that work collectively to perform complex
tasks.
Natural Language
Processing
Algorithms that process human languageinput
and convert it into understandable
representations.
Cognitive
Computing
Cognitive computing does not have a clear
definition. At best, it can be viewed as a
subset of AI that focuses on simulatinghuman
thought process based on how the brain
works.
Machine vision
(Image Analytics)
The process of pulling relevant information
from an image or sets of images for advanced
classification and analysis.
Soft Robotics
(Robotic Process Automation)
Automation of repetitive tasks and common
processes such as IT, customer servicing and
sales without the need to transform existing IT
system maps.
16
 Robotic Process Automation
Driving efficiencies across the value chain via RPA for repetitive manual activities.
RPA creates a digital workforce that mimics human interactions and is workflow

The utilisation of
enabled to deliver for example:
• Budgeting & forecasting • Prediction & forecasting

RPA can lead to •

•
Controlling & Reporting
Data management
•
•
Risk & management reporting
Transactional processes (AP, P2P, O2C, R2R)

dramatic
efficiency gains,
cost savings, and
produce
consistent,
reliable outcomes

PwC
 Swift is PwC’s machine learning suite
In today’s Tax of automation tools.
environment,
It can analyse large sets of data and make virtually any type of determination
or classification based on previously learned behaviour and feedback.

there is increased
Swift and RPA independently or combined can be combined to deliver:
• Running reports • Transfer Pricing/International

emphasis on •
•
Data extraction/gathering
Data management and classification
•
•
Income tax compliance
Transaction taxes

quality data and •

•
Calculating adjustments
Generating work papers and uploading into systems
•
•
Tax accounting
Workflow automation (tax filings etc.)

technology
enabled automated
processes as a
result of key trends
in tax operations

PwC
 The Intelligent Matcher (T.I.M.)
Solving complex reconciliation problems with the power of Data Analytics

Matched credit and debit entries are From the filtered entries, the optimal

Our client has filtered based on multiple criteria match is found:

• Amount: allow for a predefined deviation in matched • Amount: minimal deviation between matched
amounts amounts

reconciliation •
•
Date: allow for a predefined deviation in matched dates
Other characteristics: allow matches only within
• Date: minimal deviation between matched dates or
other principles like LIFO / FIFO

issues between customer ID, type of payment, etc. • Cardinality: 1:1, 1:n, n:1 and n:m

payments and
invoices that is
growing over
time

PwC
 Phrazor by vPhrase
Greater time spent
The AI platform analyses data and gives the key insights, in a few bullet
points, using natural language

analysing Benefits How are clients are using it:

customers, •
•
Strong insights
No need to interpret
•
•
Customer engagement
Performance reporting

competitors, and •
•
Workflow automation
Your own language
•
•
Business intelligence reporting
Compliance reporting

the market vs.

collecting and
mining data is a
critical step
towards true
customer-centricity

PwC
Automation and AI will impact how the enterprise thinks
about the future of work and its workforce

How risks of AI and Automation are managed How AI aligns with corporate purpose
How will people, cyber security, productivity and Is your organisation demonstrating a commitment to
reputation risks be managed? How will bias, Purpose sustaining jobs in the local community & retraining
performance, and control risks be addressed? & Social people?
Responsibility

People Mindset
Risks & Behavior
People How open people are to new ways of
How people are reskilled and
Impacts of working and capacity for change
prepared for lifelong learning
Automation How will current behaviors and/or mindsets
How effective is your learning function at
& AI change? What can leaders do to drive
building an adaptive workforce?
awareness and adoption?
Learning People,
& Policy
Development & Governance

Impact on people policies and

Impact on jobs, compensation, Organisation decision-making process
structure and transition & Job Design
What types of people policies are necessary to enable
What capabilities are required? How will jobs,
the new ways of working? How can people develop
structures and compensation evolve?
‘trust’ in AI systems

PwC 21
Critical Success Factors for Intelligent Automation
implementation

Build the right Organisational Business leadership Ability to realise Continue to Innovate
foundation culture, change and & new way of realistic benefits
communication working
• Well articulated and • Recognise and address • Leadership support • Conduct realistic • Continue to focus on
measured value the disruption and and alignment are assessment of innovation and new
proposition & strategy transformation of the essential for successful benefits technologies for IAto
• Agreed holistic and workforce and the IA execution • Constant workforce realise more benefits
scalable operating organisational change • Business and optimisation and and stay ahead of
model with robust competition
• Inadequate Technology working change is required to
underlying processes organisational and together to achieve IA realise the benefits • Continues IA
operational change benefits. opportunity
• Established IA • Clarify roles and
leads to poor delivery assessment to identify
governance to reduce • Support the new way of responsibilities in
& disillusioned complimentary benefits
operational risk, working across the Operating model for
compliance and audit business. organization to achieve digital workforce • Focus on people
issues • Transformational and sustain agility and optimisation and upskilling to manage
change to be at the scalability of the benefits realisation and evolve IA
forefront of the IA business
Implementation

PwC 22
CFOs need to answer some do-or-die questions

Modular Steering
Strategy Steering
“Are you bold enough to co-create and Vision Model
“In a world driven by data,
the future of your business?” who’s actually steering the business?”

Technology Performance
and Data Management “Do you want to drive performance forward,
“Are you ready for the truth?”
or are you satisfied to only report on the past?”
Future
Flexible Enabler Finance
People and TOM Organisation
Culture
“Can you inspire a team “Is your organisation able
of rebels and robots?” and willing to change?”
Process Service-
Architecture Delivery Model
“Can your processes
“Can the cloud deliver better, cheaper, faster?”
manage themselves?”

Adaptive Operating Model

PwC 23
 Are you ready?

For more information on PwCs Global Study see:

https://www.pwc.com/us/en/services/audit- assurance/library/finance-function-emerging-technology.html

Aldie P. Garcia
Partner
Email: garcia.aldie@pwc.com