TREND #3 — Greater visibility into and control over fraud via Artificial Intelligence (AI)/ Machine Learning (ML)
My third prediction is more like a ripple effect of my last prediction where I called out “Perils of Partial Automation”.
Corporate fraud is among the most critical and growing challenges that companies have faced over the past few years, with misappropriation of funds being a leading cause.
International studies have found that one in every five expense reports is misrepresented, which is in itself an indicator of the sheer magnitude of the problem.
Even more surprising is the fact that our benchmark study revealed that about 48% of CFOs interviewed were unaware of this frequency.
Even The Economic Times while covering this survey mentioned in their article that “Around 48% of companies in India lack a system to detect travel and expense management frauds as they do it manually while 55% of the surveyed firms do not have means to retrieve past expense data”.
Thus, there’s a growing demand for much tighter monitoring and regulation of expense management — for which it is essential to make the process transparent, real-time, and automated.
AI-powered, automated Expense management will enable companies to automatically and instantaneously identify, flag, and weed out any anomalous entries, leading to 100% compliant, error-free processing.
While eliminating fraud is an ongoing process, the adoption of advanced technologies such as AI and ML will help companies enforce accurate reporting at scale, thus helping them achieve compliance and minimize revenue leaks at one go.
T&E management landscape is currently witnessing rapid transformation, driven by disruptive technologies, changing user expectations and shifting market dynamics. Even though various types of T&E management software have existed for several years, not one has been able to address all the problems faced by employees, HR and finance departments. Traditionally, this function has been viewed as a workflow, with the result that organisations often focussed their efforts on developing systems that could handle databases.
In other words, while considerable progress has been made in terms of managing all the data, user experience, which has been neglected in the process, has actually gone further downhill.
However, in the age of sophisticated technologies such as artificial intelligence (AI) and machine learning (ML), there’s no longer any excuse to ignore the end-user. The time has come to roll up our sleeves and do justice to every party involved — without short-changing anyone else in the process.
Though many companies across the country have started investing heavily in AI-enabled processes, several other companies still lack the relevant skills and tools to leverage them, or are struggling under outdated misconceptions about their financial implications.
In fact, this is one of the major causes for the large gap between expectations and ground reality in terms of T&E management in India at present.
Here are some more reads on the same:
- AppZen CEO’s article talking about 1 in 5 frauds & how to deal with it
- Recent CFO Daily article covering the same topic
Check out this whitepaper on The Next Wave In T&E Expense Management: AI-Powered Automation
By the way, I am hosting a webinar on 17th June where I will have few CXOs discussing about “Contactless Process: Make your Expense process safer after COVID-19”, you can attend and give your views on the same. Register here