AI Adoption in Australian Companies Soars, with Generative AI Set to Take the Lead
An international study conducted by KPMG has revealed that Australian companies are at the forefront of AI adoption, with three-quarters of them already using or piloting artificial intelligence in their financial reporting. This figure is higher than the global average and ranks Australia third among the surveyed countries, just behind Canada and the UK.
The study, which surveyed 1,800 company leaders in 10 countries, including 100 leaders in Australia, aimed to understand AI trends among public companies. KPMG predicts that the adoption rate of AI in financial reporting by Australian companies will rise to 100 percent within the next three years.
Currently, “traditional” AI or rule-based AI is the most valued technology by Australian firms for preparing financial reports. This technology uses pre-programmed rules and algorithms to perform specific tasks. Robotic process automation, machine learning, and deep learning are also valued technologies in financial reporting. However, KPMG forecasts that generative AI, such as ChatGPT, which can produce text, images, videos, or other data using generative models, will explode in popularity and overtake other technologies in the near future.
Although only 9 percent of Australian companies currently use generative AI, 52 percent of the surveyed leaders said it would be their top priority among all technologies in financial reporting by 2027. This indicates a strong shift towards embracing generative AI in the coming years.
There is also an upward trend in AI spending among Australian companies. Over half of the respondents (51 percent) currently allocate 10-20 percent of their IT budget for AI, surpassing the global average of 44 percent. Furthermore, 29 percent believe their AI spending will surge by up to a half, and 9 percent expect an increase of over 50 percent within the next 12 months.
KPMG’s Global Audit Head of AI and partner, Shane O’Connor, highlighted the significance of AI investments in enhancing productivity, cutting costs, improving customer experiences, and developing new products and services. He emphasized the growing importance of generative AI in financial reporting, enabling companies to identify anomalies in financial data, generate customized financial reports, assess the effectiveness of internal controls, identify inefficiencies in core processes, and benchmark disclosures across their organizations.
However, despite the push for greater AI adoption, there are concerns about the risks associated with the technology. The survey revealed that around 31 percent of the leaders surveyed were significantly concerned about copyright issues related to AI in general. This figure rose to 40 percent for those adopting generative AI. Similarly, concerns about copyright among Australian data organizations and management increased from 33 percent to 43 percent with generative AI. Additionally, the concern about data sovereignty nearly doubled from 21 percent to 40 percent.
Mr. O’Connor acknowledged the risks that come with implementing AI in financial reporting and emphasized the need for effective AI governance. He highlighted that when AI systems are not properly designed, they can be inconsistent or introduce biases into the evaluative process. He also pointed out the reality of AI hallucinations and stressed the importance of continual supervision of algorithms to maintain their long-term trustworthiness. Risks related to data privacy and security are amplified when external entities are integrated into AI systems. Therefore, organizations must stay informed about and comply with the ever-changing regulatory landscape.
The KPMG study coincides with a recent government survey that indicates a lack of trust in articles written by AI among Australians. The survey found that 78 percent of Australians distrust articles written by AI, and 95 percent believe that news outlets should disclose when AI is used in articles. This highlights the need for transparency and ethical considerations when using AI in content creation.
In conclusion, Australian companies are leading the way in AI adoption, particularly in financial reporting. Generative AI is poised to become the technology of choice in this field, offering numerous benefits for organizations. However, concerns about copyright, data sovereignty, and ethical considerations remain important factors to address. To succeed with AI adoption, companies must establish robust AI governance and stay ahead of regulatory changes. Transparency and disclosure are also crucial in building trust among consumers when AI is used in content creation.
