EY has reportedly used artificial intelligence to help spot fraud as part of its auditing business. The news comes as other members of accountancy’s Big Four are deploying AI to help junior staff take on more complex tasks, signifying the desire among financial services companies to make more use of automation.
While AI has long been used by financial services companies for tasks such as processing application forms, rapid growth in the power and popularity of generative AI systems and tools such as ChatGPT over the past 12 months has led to many tech and business leaders in the sector looking at other ways the technology can help their teams.
EY’s AI auditing is delivering positive results
Auditors at EY have been using an AI tool as part of their work with clients in the UK, and say it has proved effective at spotting fraud.
Speaking to the FT, Kath Barrow, the company’s assurance managing partner for the UK and Ireland region, said the new system checked the books of ten companies, detecting two instances of suspicious activity. Both were later confirmed to be fraudulent.
Further details of the technology being deployed, or how widely it is being used, have not been disclosed by EY, but Barrow told the FT that it “feels like something we should be developing or exploring”, saying that the early results showed the technology has “legs” for auditing.
Elsewhere, Big Four firms are using the technology to help their junior staff. Graduate staff at KPMG are now able to undertake tax work that would previously have only been handed to colleagues with at least three years of experience, Bloomberg reports. This is because AI can handle many of the administrative tasks associated with the work. Junior staff members at PwC, meanwhile, are spending more time delivering client pitches rather than preparing documents for meetings.
“For many of us, we started our careers doing the necessary but often tedious work in support of senior professionals,” Bret Greenstein, generative AI leader at PwC, told Bloomberg, adding that the technology “allows junior employees to be more productive and impactful much quicker”.
How will AI in accountancy be regulated?
These AI deployments reflect enthusiasm for AI across the wider financial services sector. A survey released last week of 800 finance leaders conducted by software vendor OneStream found that 80% believe AI will enable increased productivity and efficiency, with 72% expecting it to create new job opportunities in the sector.
However, many in the sector have raised concerns about potential data security questions posed by generative AI, with regulators still developing rules to guide the use of the technology.
The UK’s Financial Conduct Authority said earlier this year that it intends to regulate the use of AI in financial services where appropriate, but has yet to elaborate on how this will work. The UK government’s AI white paper, released in March, says that individual sector regulators will be expected to police how automation is impacting their industries.
In a speech delivered in July, FCA chief executive Nikhil Rathi said: “The use of AI can both benefit markets and can also cause imbalances and risks that affect the integrity, price discovery and transparency and fairness of markets if unleashed unfettered.”
Rathi added the regulator would take a “pro-business” approach, in line with the government’s wider philosophy on AI regulation, and added that “adoption of AI could be key to the UK’s future competitiveness – nowhere more so than in financial services”.