University at Buffalo School of Management

Autumn 2024 Buffalo Business 11 who spearheaded the launch of its Ally AI last year to improve services while keeping critical financial data safe. The company first deployed Ally AI last year in their call centers, where customers connect for all their bank- ing services. "We've begun using generative AI to summarize calls, which allows the representative to focus on what the customer needs, rather than on taking notes," says Kumar. "The results have been very accurate, and it helps us see if the services we offered were aligned with what was expected, and if the customer experience was improved." Kumar says that while AI's influence in finance is growing, its integration is complex due to regulations, data privacy and ethical considerations. "ChatGPT has been in the news because it's so easy to use, but if I just go and start connecting all my consumer data there, it will start learning from it, which is a big issue in our space," she says. "You need to put guardrails in place for different use cases before you allow AI tools to be used within your organization." One of the biggest concerns, she says, is ensuring that the output of AI models is nonbiased. "The model will run what you make it learn, so how do you ensure the things being fed are correct and appropri- ate — and that there's no bias in it? Everything with AI is coming in fast, and it's taking time to figure out, but finan- cial institutions are getting faster and more advanced all the time," says Kumar. "And that's important to avoid running into trouble with regulators or losing the trust of your customers." Accounting for AI As in finance, the use of AI in accounting shows great promise. Firms are already using AI tools to make data- driven decisions, analyze large volumes of data for audit- ing, automate complex tax compliance tasks and more. Management PhD student Victoria Gonzalez is conducting research in the school's Management Science and Systems Department to see how AI can be used to predict accounting fraud. Using multiple datasets of publicly traded companies, Gonzalez and her colleagues are developing a new prediction model to identify companies that are likely committing fraud. "I wanted to do research in accounting because it's an area where we can explore how AI, machine learning and these new language models can be used to achieve new, practical results," says Gonzalez. In the wider field of accounting, Gonzalez says she sees AI changing the way accounting works. "When I le JPMorgan Chase a couple years ago, they were heavily training people in the accounting area to use business analytics tools and soware to improve efficiency and make their work easier," she says. "Auditors were also using it to process information from their clients. That was three to five years ago, and it will be even bigger in the years ahead." In his role as senior officer at the U.S. Securities and Exchange Commission, Adam Storch, BS '02, leads the Event and Emerging Risk Examination Team, which exam- ines new and emerging technologies such as AI. He says that in July 2023, the SEC proposed new rules that would require broker-dealers and invest- ment advisers to take certain steps to address conflicts of interest associated with their use of predictive data analytics and similar technologies to interact with investors to prevent firms from placing their interests ahead of investors' interests. Storch uses his foundation in accounting and busi- ness from the School of Management to approach his role at the SEC with a strong grounding in business prin- ciples, which he says is essential for understanding the complexities of financial regulations and enforcement. And for new accounting professionals, he says it's critical to understand AI's current capabilities and to prepare for the future. "It's becoming table stakes to understand this technol- ogy, how it works, and its advantages, disadvantages and its potential risks," says Storch. "It's an important tool you will be expected to use in the normal course of work that Gonzalez Storch

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