It’s hard to deny the considerable impact that AI has had on the financial sector and how it gives CFOs unprecedented, powerful tools to increase efficiency and drive growth across industries. Yet these benefits come with inherent risks, such as data inaccuracies and compliance issues. CFOs are uniquely positioned to mitigate these risks while supporting AI innovation. In this guide, we’ll take you through the practical ways CFOs can reduce AI risk and maintain financial integrity.
While CFOs should consider the risks, there are also several key advantages to deploying AI tools. Before we discuss AI risk management strategies, let’s take a closer look at some of the primary benefits of AI for businesses (and CFOs specifically), including:
AI can help implement significant efficiencies for financial operations, but it also comes with several significant risks that CFOs should be fully aware of before implementation. These risks include inaccuracies caused by poor-quality or biased data inputs and an overreliance on automated processes that can scale errors.
Another inherent financial risk relates to the use of opaque or “black box” AI models. A black box AI tool is an artificial intelligence system where the internal processes and decision-making are a mystery to its users. When AI systems generate outputs that can’t be clearly explained or audited, they pose a threat to financial accuracy and regulatory compliance. There’s also the issue of unclear accountability, especially when third-party platforms or tools not fully controlled by the organization drive decision-making. These mechanisms are not transparent or easily understood by users, even the developers. Essentially, users can see the inputs and outputs, but the “how” of the process remains hidden.
If the decision-making process is completely opaque, it becomes difficult to find the root of a problem or adjust the course when something goes wrong. For example, if an AI tool makes a faulty financial recommendation or violates compliance rules, and no one (including the CFO) understands the method behind that decision, it’s challenging to correct the issue or hold anyone accountable.
In addition, when stakeholders – including employees, executives, customers, or regulators – do not understand how an AI model works, they’re less likely to trust its recommendations. This lack of trust and credibility ultimately undermines confidence in the technology, which can slow its adoption.
In highly regulated industries like finance, CFOs must demonstrate that their decision-making processes are fair, explainable, and aligned with governance standards. A hidden process may violate regulatory expectations, which makes the AI tool more of a liability than an asset to the company.
While reducing AI risk is part of the job of a CFO, it’s not their responsibility alone. It requires close collaboration with legal, IT, and compliance departments to ensure the entire organization is on the same page when it comes to risk management evaluation and accountability.
Legal and compliance departments can help evaluate whether AI systems align with privacy laws and data protection regulations, such as California’s Consumer Privacy Act and the EU’s General Data Protection Regulation. Further, IT teams can support CFOs by assessing the technical integrity and security of AI tools. This collaboration is especially important when dealing with third-party vendors, when contract terms, data handling practices, and system reliability should be thoroughly vetted.
As AI continues to evolve, so should finance teams. Continuing to upskill and invest in education as AI tools develop can help CFOs mitigate risk and stay on top of emerging policies and standards. CFOs should consider the following for their financial teams:
CFOs and financial teams should also take a balanced approach by relying on a combination of AI tools and human input (such as using an editing service to refine and polish AI-generated content). This both strengthens accountability and minimizes risk.
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While CFOs may increasingly rely more on AI-generated outputs, many continue to remain skeptical of their accuracy or reliability. A qualified content editing service such as Proofed can provide a critical layer of review to boost credibility (and ensure an organization’s reputation for trustworthiness remains intact). Editors can assess AI-produced content for clarity and factual accuracy and turn raw outputs into engaging, confidence-inspiring reports. Additionally, editing professionals can work with a company to develop a style guide, which establishes consistency across all published content (including AI-generated content).
An editing company can also play a valuable role in helping CFOs regain trust in their financial data, as well as in AI tools as they become more prevalent. According to one survey of 1,300 C-suite and senior finance and accounting professionals, almost 40% of CFOs do not entirely trust their organization’s financial data. One reason given for this doubt is that manual processes can leave organizations vulnerable to errors. Other reasons the surveyed CFOs cited include fragmented data sources, a dependency on spreadsheets, and a lack of financial transparency.
When CFOs don’t fully trust their own data – whether that’s due to inconsistent reporting or unclear language or formatting – an editing team can fact-check AI-generated content and standardize documentation according to a style guide. By ensuring reports are accurate and consistent in terminology, CFOs are better positioned to interpret information and present it confidently.
At Proofed, we know how important it is for CFOs to trust their financial data and protect their credibility. We’ve worked with a wide range of businesses across all industries, giving time back to financial teams so they can focus on implementing strategic growth. Our multilayer quality assurance process catches inaccuracies and non-compliance issues, which boosts stakeholder confidence.
If you’re ready to harness the power of AI but want to ensure minimal risks to your reputation and daily operations, schedule a call with us today to learn more about what we can do for your business.
The most pressing risks include data quality issues, biased or opaque algorithms, cybersecurity threats, and compliance breaches. Any of these can have significant financial and reputational consequences if not properly managed.
Trustworthy AI systems should be explainable, auditable, and aligned with company policies. CFOs should work with IT and data science teams to understand how models are trained and monitored and how results are validated.
No, but they do need a solid understanding of the implications of AI for finance and governance. CFOs should be comfortable asking the right questions and ensuring that risk and compliance considerations are embedded in every stage of AI implementation.
AI tools can produce forecasts and summaries quickly, but their outputs often lack clarity, consistency, or context. Editors can review and refine this content to ensure it’s accurate, well-structured, and easy to understand – all of which can help CFOs feel more confident using AI insights in their decision-making.
Yes. Editing companies can support CFOs by ensuring that regulatory filings, compliance reports, and investor communications are professionally written, error-free, and aligned with legal and industry standards. This reduces the risk of miscommunication and prepares your organization for an audit.
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