AI and finance (2): trade-offs, ethics, and challenges
07/03/2025
6 min
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Artificial intelligence (AI) is already impacting on many corporate finance professions (CFOs, accountants, management controllers, etc.). In the second part of this interview, Patrick DAGUET and Marie REDON look at questions and challenges companies face when selecting AI tools and ensuring the ethical use of this technology by corporate finance professionals.
The first part of this interview can be read here.
How should companies select the AI tools and what lessons can we learn from the integration of Enterprise Resource Planning (ERP) tools in the 1980s and 1990s?
Marie REDON: That’s an important question. What Patrick mentioned (in the first part of the interview) refers to the fundamental trade-off between standardization and flexibility when choosing new artificial intelligence technologies.
Certain organizations will turn to an existing external solution because it allows them to move faster, while others will seek to develop a more flexible internal solution tailored to the specific needs of the company.
The companies I spoke with that offer ready-to-use AI solutions allow their client companies to share their data in a cloud. This data will feed into AI and enable more efficient and optimized solutions for their clients. However, as this involves sharing data, client companies may question the relevance of the proposals generated by AI and the cybersecurity or competitive risks involved.
Tools: risks of resistance or circumvention
Companies should note that this same trade-off (between flexibility and standardization) existed when companies began to integrate ERP systems. The testimonials I gathered from CFOs (regarding ERPs) show that when a company deploys overly standardized solutions, there is a risk that they will not meet the specific needs of the company. In some cases, they may encounter operational resistance or even circumvention of the tool. In other words, as the tool does not provide what is needed, someone will create an additional tool to meet that need and then reconnect it to the central tool. However, this can lead to interoperability issues between tools and the risk of data entry errors.
But it’s important to note that there is no such thing as the perfect tool. It’s impossible to find one that is 100% suited to the specific needs of a company, especially in large groups/organizations with multiple business units, that each have their own way of working.
The key is to use technology wisely. And don’t forget that the tool is there to serve the company and its finance teams. The tool is not an end in itself. Otherwise, it can lead to some pretty serious issues.
Indeed, how can we ensure therefore that AI is used in an ethical, secure, and effective manner?
Patrick DAGUET: This is a crucial point. Throughout the history of finance, every development has often brought new tools, including technology. And the main challenge in the financial world has been to “tame” these tools, i.e., to consider them for what they are really for. Above all, they are tools and not an end in themselves. A second challenge is to prevent these tools from being used for purposes other than those for which they are normally intended.
There is a particularly important ethical and compliance dimension, particularly with regard to data protection.
The importance of awareness
This ties in with why we raise awareness among our future CFOs: not only with regards to how to use this data, but also how to store and secure it. It’s a matter of respecting the data, whether it comes from customers, employees, or anyone in the company’s ecosystem.
This is crucial. Otherwise, it can potentially lead to unacceptable misuse.
Then there is the training or domestication of the tool: AI can produce a lot of quality information, but the way it is used is really essential. You can ask AI a question and get an answer that is at best correct and at worst completely wrong. In the latter, we blame the tool. We say that the tool is deficient, but often we realize that the tool was not used correctly. So, it’s important that the AI user, who is ultimately the beneficiary and driving force, is trained in such a way that they know how, when, and under what circumstances they can use the tool.
This requires rethinking the organization of Finance Departments, which until now have been organized in a fairly traditional way in terms of different departments/units and skills. However, while this traditional organization remains perfectly valid and relevant for most companies, it needs to be adapted to the new context i.e., it needs to incorporate artificial intelligence and the concept of compliance.
The role of the CFO is therefore to facilitate this change, in which she/he is simultaneously an operator, player, and a driver. It is up to the CFO to support change or enable it to take place under the best possible conditions. To do this, he/she must have a very holistic view of how to build the finance department.
It’s not just a matter of adding an “AI block” to the department, it is more complicated than that. It requires having an overall vision and rethinking the structure.
Marie REDON : Indeed, what also emerges from the studies I have conducted is that professionals will be the link between these two aspects: flexibility and standardization. To use AI tools wisely, you certainly need technological and financial skills, but you also need a very cross-functional position because this trade-off between standardization and flexibility is actually very much linked to the group’s global strategy.
This will often want to impose a standard tool on all its subsidiaries, whereas the subsidiaries themselves will tend to take a more bottom-up approach, with a tool tailored to their specific needs. So the CFO must not be at headquarters imposing a tool that does not meet specific needs and leads to circumvention, nor should they be solely in the subsidiary without knowing the strategic vision. They really need to occupy a cross-functional position between the business units (horizontal cross-functionality) but also between the hierarchical levels and the subsidiaries (vertical cross-functionality). And they must constantly manage these compromises between standardization for the group and flexibility for its subsidiaries by creating appropriate tools. So, as Patrick said, this transformation is indeed accompanied by a complete structural reorganization.
Patrick DAGUET: Yes, and with what we are currently experiencing with AI, there is another striking parallel with ERPs: First, there is the technical aspect of selecting the tool. Then there is the question of getting users on board. A CFO must therefore consult and listen to ensure that, whatever system is put in place, it is accepted by as many employees as possible.
This is the most crucial point because you can have a high-performance, relevant tool, but if it isn’t accepted or used due to a lack of listening or coordination between the various stakeholders, it will be a failure.
At IÉSEG, you teach future and current CFOs and finance professionals. How do you integrate the issue of AI into your Executive program, Patrick?
Patrick DAGUET: Technology doesn’t wait, and we are aware of this in the design of our Executive Postgraduate program in Financial Management. We have integrated a series of specialization modules, which are separate but interconnected, to develop professionals AI-related skills.
I will mention four of these modules because I think they all have relevance to artificial intelligence. The first concerns the organization of the Finance Department—an essential topic in the context of the change we are experiencing today.
The second is obviously everything related to artificial intelligence and its potential use by the Finance Department. Here too, I think there is a real need for training and acclimatizing at various levels (such as improving daily tasks and supporting decision-making).
The third module concerns data visualization and Business Intelligence (BI), which is also at the heart of AI. Using concrete examples and real-life scenarios, we analyze how a Finance Department uses BI to analyze or diagnose a situation. The link with AI is made through the way in which this data is then reworked and reprocessed to inform management decisions.
Finally, we have a module on the corporate sustainability reporting directive (CSRD) as companies are facing another change. This is the one that is increasingly pushing them to report on sustainability. The aim is to see to what extent the requirements of the directive will push them to “rationalize or make these figures intelligent.”
The common thread linking these four modules is clearly artificial intelligence and its central role.
Marie, did your work identify any expectations in terms of the skills that finance professionals will need in the coming months and years?
Marie REDON : Yes, our study highlights the fact that companies need professionals who are able to work in constantly changing and often complex environments. In particular, respondents emphasized the importance of interpersonal and managerial skills (70%) in order to adapt to future changes. Technical skills related to new digital technologies (33%) and finance (43%) were also valued, but to a lesser extent.
So, beyond these technological skills, which are absolutely essential, they must not forget that they are first and foremost finance professionals. And it is important to cultivate soft skills, leadership, and critical thinking.
Sometimes decisions proposed by AI turn out to be irrelevant because, as humans, we show empathy, or we can have unpredictable reactions… These decisions may be better, even if they are not necessarily the most rational ones.
To develop these skills at IÉSEG, we use group work, for example. Students and participants quickly learn to position themselves within a group that can change, which is very much the case in the life of a company. We also try to hone their presentation skills so that they can effectively demonstrate their ideas and arguments.
These topics are the subject of research conducted by the CFO & Sustainable Transformation Chair (in partnership with the National Association of Financial and Management Control Directors (DFCG). and Axys). If you would like to share your experiences or contribute, please do not hesitate to contact: m.redon@ieseg.fr
The image accompanying this article has been generated by Dall-E
