AI in Finance Needs Better Data, Says Finatical Software

Finatical Software has unveiled its vision of how a Structured Financial Data Layer could become one of the critical components of the future financial technology stack. According to the company, even though artificial intelligence transforms finance as we know it, the key to unlocking the true potential of AI lies not in the model itself but in the quality and structure of the underlying financial data.

As Finatical notes, many companies spend a lot of money on the development of AI solutions. Yet the finance departments find it difficult to obtain reliable insights from them as the underlying financial data is disorganized or inconsistent.

Finance Technology Has Entered a New Phase

Finatical defines the development of finance technology into three stages. During the period from 1995 to 2015, enterprises were working on enhancing financial reporting. In the period from 2015 to 2025, enterprises started shifting towards real-time reporting, dashboards and KPIs automation. For the future stage, which will take place between 2025 and 2035, Finatical claims that the priority would be creating trusted financial data for decision making using AI technologies.

Finatical asserts that AI systems create recommendations inconsistently when the basis for their work is incomplete or badly managed financial data. The lack of unified and consistent financial information makes it hard to validate the results of AI decision-making.

The Role of the Structured Financial Data Layer

The Structured Financial Data Layer proposed by Finatical is created to structure financial data before its use in AI applications. Finatical claims that this structure makes it possible for the finance experts to look at the recommendation sources and calculation methods and to confirm the business logic behind them.

According to Shaun Pendrigh, the Chief Technical Officer at Finatical Software, the debate on AI has been about choosing appropriate AI models or prompt engineering. However, the main competitive edge will be gained by creating a structure of financial processes that AI can trust. According to Pendrigh, in order to trust AI recommendations, one needs to trust the data and business logic underlying it.

AI Should Support Finance Professionals

It should be noted that the firm highlights the fact that the use of AI technologies does not mean replacing finance specialists but only supports their efforts. AI algorithms can help accelerate the process of analysis, uncover trends, and make recommendations; however, it is up to humans to evaluate assumptions, verify results, and make business decisions.

Flash Reports Supports the Company's Vision

This principle has informed the development of Finatical's Flash Reports platform. The software integrates directly with both Microsoft Excel and QuickBooks Online, enabling the creation of refreshing, live financial models while retaining all the flexibility of using Excel. The platform is geared towards providing governed financial workflows for purposes of reporting, forecasting, financial analysis, and AI-based decision-making.

According to Finatical, firms that develop a trusted Structured Financial Data Layer will be in a position to derive value from AI in the long run. The firm does not see the adoption of AI technology as the end point; instead, Finatical views the foundation of a reliable financial data layer as key to deriving value from AI.