Artificial intelligence in business and accounting
- What are the current trends in applying artificial intelligence in business? Recent studies indicate that in the coming years we can expect a real revolution caused by the dissemination of the use of Artificial Intelligence (AI). As per a report prepared by MarketsAndMarkets, the global AI market is expected to be worth USD 16.06 billion by 2022, at a compound annual growth rate (CAGR) of 62.9% between 2016 and 2022 Among the various AI technologies natural language processing and robotics are the largest contributors to the overall artificial intelligence market. A similar growth is expected by an analyst firm, International Data Corporation (IDC). In their opinion, market for cognitive/AI solutions will experience a CAGR of 55.1% over the 2016-2020 forecast period. In addition, IDC analysts note “software developers and end user organizations have already begun the process of embedding and deploying cognitive/artificial intelligence into almost every kind of enterprise application or process”. This will cause the nearly half of all cognitive/AI revenue throughout the forecast to go to software, which includes both cognitive applications (i.e., text and rich media analytics, tagging, searching, machine learning, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation) and cognitive software platforms, which facilitate the development of intelligent, advisory, and cognitively enabled solutions.
- What is “Robotic Process Automation” and how does this concept contribute to accounting? According to the definition prepared by IRPA, “Robotic Process Automation” is the application of technology that allows employees in a company to configure computer software as a “software robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. RPA realizes cost saving by replacing human workforce in high-frequency tasks (e.g. that are associated with the operation of accounting documents) and at the same time reduces processing time of those tasks – the cost reduction can reach 50%-70% for some of the automated activities. Additionally, cognitive RPA can extract and combine data from various sources, including external data providers, social networks, shared drives, recognize text and graphic information. It can also provide initial analysis and conclusions. If we add to this natural language processing, we will be able to see the full picture of the opportunities provided by RPA.
- What will be the impact of robotic automation on the labour market (particularly accounting)?Dissemination of artificial intelligence will have probably a very significant impact on the labour market for next 10-20 years. That's the prediction of Carl Benedikt Frey and Michael A. Osborne from Oxford Martin School & Faculty of Philosophy in the UK. According to their estimate, 47 percent of total US employment is in the high-risk category, meaning that associated occupations are potentially automatable. But some experts disagree with this vision. They point out that technology may create new job categories that will employ displaced workers. Another group argues that the computers will have in fact little effect on employment in the future.
- What are bots? Bot is a computer program that works automatically, simulates a human activity. A special type of bot is a chatbot (also known as a talkbot, chatterbot). It is a computer program which conducts a conversation via auditory or textual methods. There are two main types of chatbots, one functions based on a set of rules, and the other more advanced version uses artificial intelligence. The chatbots based on rules, tend to be limited in functionality, and are as smart as they are programmed to be. On the other end, chatbots that use artificial intelligence, understands language, not just commands, and continuously get smarter as they learn from conversations they have with people.
- Why did we name our bot Luca? We named our bot after Luca Pacioli (born in 1445 in Borgo de Sansepolcro, Toscana, died in 1517), an Italian who is considered to be the Father of Accounting in Europe. Among other things, he developed the standard of double entry bookkeeping. The double entry method was established in Italy long before its description by Pacioli but he rationalised it and described it in a transparent manner in a handbook entitled “Summa de arithmetica, geometria, proportioni et proportionalità” issued in 1494 in Venice.
- What technologies were used when creating Luca?Luca was developed using technologies supplied by Microsoft, particularly Microsoft Bot Framework.
- What is the current subject scope that is supported by Luca?At this point, Luca has knowledge relating to the IFRS-15 standard.
- What are the costs of using Luca?We treat the work on Luca as research and development activities in the scope of applying artificial intelligence in financial reporting. For this reason, the usage of Luca is free of charge.
- What are the legal aspects applicable to using Luca? The detailed legal aspects of using Luca are described on the dedicated webpage.
- Who provides funding for the development of Luca?At this point, the development of Luca is financed with non-public funds. We also take into account other funding sources as the target.