Artificial intelligence and machine learning are set to transform the finance world. Xero, a company that makes cloud-based accounting software targeted towards small and medium-sized enterprises, is preparing for this future now and believes that most are not prepared — practically or mentally — for the rate of change we are about to see.
“We’ll see more innovation in the next two years than we have in the last 10 years — all driven by AI,” Rod Drury, the CEO of Xero, recently told Business Insider in London.
His firm is starting to see the benefits now from the research and development it has been investing in over the past few years. Drury says that moving a lot of the transactional and accounting information — bank statement, invoices, billing — into the cloud was step one.
A lot of that can be, and has been, automated to the point that now it’s just a matter of fixing mistakes. And as the humans solve the errors and process the data in a way that is useful for operations, the robotic process automation and other AI elements of the system can watch and learn how to do this part itself as well.
“The first innovation in cloud accounting was actually getting these transactions into the cloud,” Drury told Business Insider. “The second generation that’s happening now is getting all these big data, machine learning, AI, over these massive data sets, which is super interesting.”
This won’t end accounting as we know it, but it will transform the industry in many ways. And as more advancements are made, this machine learning can be incorporated into the risk management and fraud reduction processes that are now so fundamental to all financial services companies.
“As the software gets smarter it just creates more and more opportunities to add value,” said the chief executive.