Executives at the largest companies expect to see a return on investment from their AI initiatives in a relatively short time, according to new data from KPMG. According to the firm’s most recent survey on generative AI use, more than three-quarters (78%) of the C-suite and senior business leaders surveyed, all from companies with $1 billion or more in revenue, are confident they will see returns on their investments in gen AI within one to three years.
Generative AI by sector and function
Generative AI is being used in industries with a high demand for data analysis and management. Sectors that saw significant use of generative AI include industrial markets for inventory management (64%), healthcare and life sciences for health care document assessment (57%) and media and telecommunications for workflow automation (43%).
When categorized by function, use cases were largely split across various areas. Forty-five percent cited IT and technology, via query support and assistance, while slightly fewer (42%) cited product development. Forty-one percent pointed to marketing and sales through identifying trends and patterns and 39% mentioned operations in demand forecasting.
For finance teams and their leaders who feel left behind in generative AI guidance and implementation, there may be hope. Sixty-one percent said they plan to expand the scope of their current AI initiatives in the next one to three years, and more than half (55%) said introducing generative AI into new business functions is the next step in their organization’s “generative AI journey.”
Tool construction and regulation
As the customization of software, especially generative AI, has been flagged as a concern for CFOs amid their digital transformations, few companies are building in-house generative AI tools. Half (50%) said they currently buy or lease all of their generative AI tools from vendors.
Nearly three in 10 (29%) said they use a mix of vendor solutions and internal development. Only 12% said their generative AI tools are entirely built in-house, which is an incredibly complex, labor-intensive and expensive task. As other Big Four accounting and research firms have advised, CFOs and their finance teams should start with the basics and slowly push the boundaries on generative AI use cases.
Regarding regulations around generative AI, the anticipation of new rules is leading to some uncertainty. Almost all of those surveyed (99%) said there is a medium to high risk of regulations impacting the function of generative AI in their business and 39% of that group said they expect regulations to have a high impact.
Business leaders are preparing for the impacts of increased data privacy and security measures (63%), cost increases due to compliance requirements (54%) and an increased focus on transparency and explainability in generative AI models (52%).
Risk assessment
Risk is a major factor for CFOs and their fellow executives in pushing the boundaries of generative AI use cases. As most companies are partnering with other organizations to power their generative AI tools, concerns include data privacy and security (76%), dependence on partner expertise and resources (58%) and the risk of non-compliance with regulations (52%).
More than half (56%) of leaders surveyed said risk mitigation is of high significance when it comes to generative AI implementation. To address this, 79% of survey takers said cybersecurity is a key area of focus. Two-thirds (66%) also cited data quality as similarly important.
Surprisingly, few leaders identified safeguards expected from partners. Just over a quarter (27%) mentioned the implementation of data privacy and security protocols, and only 23% cited expectations of ethical AI guidelines and principles. Only 17% said the integration of risk mitigation and management practices was also an expectation.
Despite the lack of defined safeguards, the process of creating them has begun for many. Sixty-nine percent said they are incorporating stringent data security protocols in their partner agreements. Just under a third said they’re enforcing two-factor authentication and other security practices, and conducting regular security audits (65% and 64%, respectively).
The KPMG GenAI Survey 2024 captured perspectives from 225 C-suite and senior business leaders representing organizations with annual revenue of $1 billion or more. The survey was conducted June 21-July 12, 2024.
