Transforming Accounting With Artificial Intelligence: An Interview With Eli Fathi, CEO Mindbridge.ai

The Audit Profession is undergoing disruption due to advanced AI methods enabling anomaly detection on large data sets. Forensic accounting detection is being made more robust and explainable. GETTY

Over the last few months, I have been writing about the imperative for board directors and CEOs to tighten their AI governance practices. This blog discusses how Mindbridge.ai,  a Canadian fintech company, is using AI to detect anomalous financial risk patterns from transactions, unintentional errors and intentional misrepresentations in order to reduce financial loss, corporate liability risk, and fraudulent reporting. It also reinforces the imperative for board directors and CEO’s to ensure AI governance and innovation is applied more rapidly to modernize businesses. Change or Die!

Recognized, in June 2020, by the World Economic Forum in their top 100 most promising technology pioneers, Mindbridge.ai is transforming the accounting and financial services professions. Mindbrige.ai is solving a real business problem. The accounting profession has been labour cost heavy in manual processes,  reviewing reams and reams of financial data.

Now with AI, the ability to rapidly scan and more easily detect anomalies in financial data sets enables audits to be done in a more efficient fashion.

According to Eli Fathi, CEO of Mindbridge.ai, the GDP of the world pre Covid was $85 trillion. Research from the Association of Certified Fraud Examiners in the “2020 Report to the Nation” has identified that over 4.5 trillion dollars a year gets lost from the GDP, due to mismanagement related fraud and abuse. GDP.

Furthermore, a survey with 1100 C-Suite Executives highlighted the concerns over inaccuracies in financial data demonstrating declining CFO’s confidence levels in signing off on financial statements. Some of the highlights of the survey include that only 45% are confident that they can identify errors before reporting results whereas 26% are concerned that there are errors in the statements but have no visibility to find them. Clearly, there is a major opportunity for improvement.

According to Eli, AI is like the new “MRI of data,” as it rapidly scans and identifies anomalies at risk, so humans can take the next step to verify the risk impact and mobilize the next step best actions.  

Launched nearly four years ago, MindBridge has processed over 7,000 different individual enterprises datasets. This adds up to an enormous data set of over 13 billion data points, providing rich insights about overall industry and market patterns. Being able to identify financial transactional risks can also restore trust, start to close the gap of identifying fraud early, and reduce the board of directors and CEOs risks in using outdated manually intensive accounting practices.

For some time, I have been reinforcing the need to mobilize AI value realization to drive the learning equation foreword, especially in areas like: customer acquisition, customer retention or in financial  and supply chain management value chains.

Board directors and CEOs, however, are still not moving fast enough in their AI learning and adoption rates. Eli referred to the adoption of AI is like a big exciting candy that everyone wants to have or say they have. However, when you look at the practical applications of AI, there have been few successes in using AI in the business world, where true ROI and sustaining value realization have been validated.

Then with COVID , suddenly the realities of our new world demand that all businesses be more digitally smart, and everything changes.

Why?

Because now people must move to the the cloud. Eli stated that: if CEO’s are not in the cloud, their companies will simply die. He shared stories of government departments that moved everything overnight to the cloud. It’s hard to imagine but on a Friday morning they decided to do it and then on Monday 99% of the department was cloud access enabled.

Now most business leaders understand that in order to survive during COVID, you have to go to full digital transformation and invest in new cloud based infrastructures to be more accessible to your customers, partners, and employees.

Eli also echoed that more often than not, the board of directors and CEO’s will tell their CTO or CIOs, I need to see some AI in the company. It was almost like it was like everyone wanted to be on the golf course, saying yes we are using AI, but if probed deeply on the value outcomes, the swings were always short or hitting sand-traps that few really wanted to admit.

Eli reminded me that data is more often in data swamps versus in centralized enabled data lakes that provide ease of access. Having been immersed in designing and deploying transparent AI solutions for over 7 years, I can attest to seeing more data swamps, lack of robust data lineage practices, or investments in AI - machine learning operations(MLOps) and AI inventory management systems being more the norm versus robust AI governance practices.

We also discussed how important it is that board directors and CEOs are training their people in understanding advanced analytics, so that they can understand what's going on with AI and be able to make informed decisions about its value, risks and ensure sustainability practices. AI is not a short term game – it’s a long term game, and you must stick with it to keep learning.

Eli also reminded me that if you want to make a successful implementation of an AI based application, it follows the same process as any other technology adoption curve - you start with high expectations, then you go through a lot of headaches and difficulties, and in some cases, you may go potentially into the value of death. When you reach the valley of death, do you basically say I cannot do it. It doesn't make sense. Hence, leaders must have perseverance, and rather avoid getting into the valley of death by being more patient, tenacious and provide the necessary resources to ensure that the team that carries out the adoption of the AI based systems can see the light at the end of the tunnel. Light always emerges when there is innovation resilience and curiosity in play. And when the realization emerges on the value of AI, we will all wonder why it took us so long to accelerate our organizations AI entablements.

Now, what does it take to get there?

It takes a whole organization starting from the board of directors and the CEOs to ensure Explainable AI and governance practices are deployed efficiently and effectively. A short read on Explainable AI was written by Silvie Spreeuwenberg and her book can easily be sourced on Amazon. Silvie’s research provides key linkages of the risks of data swamps in overlaying AI without ensuring data quality and effective and ethical governance practices are in place.

For example, we don't want to utilize face recognition, to screen people out that are unfairly screened by gender. If you're applying for loans, you don't want to be biased on gender, religion, etc. Data bias is a critical area to be particularly alert to as Cathy Cobey, Head of EY Trusted AI Practice discusses in my prior blog.

I also asked Eli to define some key takeaways from his experiences in building out his award winning company, Mindbridge.ai.

In terms, of individuals, Eli stressed three key points. First,  don't be afraid of AI. When there are unknowns, there is always apprehension about using new methods. When you're going to buy into the value of AI based systems, you are going to make sure that there is explainable AI, and that it is not a black box, but rather it is a glass box.

Second is that you have to be careful about your own data. As we are in the western world, we have given away much of our personal data, probably with the exception of health care. He stressed how important it is to ensure you control your social media settings, so you are not going to be exposed to certain situations and your data will be compromised .

Why?

Because the data is the fuel to the AI. And your personal data by itself is not valuable. But when your data is added up in terms of millions of people, it become valuable as there are data patterns that can be mined for others benefits. Be very careful about your financial, personal and your healthcare data, in particular.

And the third point is adopt AI at the pace that you feel comfortable with. You don't have to be bullied into it if you are not ready. That being said, AI is already in every walk of our lives. If you use Alexa Siri, you are using it; it you are using Google search you are already using the AI in their search methods.  

As Google knows what your search patterns are they can use AI to correlate your interests and even your purchasing interests, etc. Amazon knows what you buy and Facebook knows who and what you and your friends are doing. In many respects, it is like the AI intelligence train has already left the station, but into the future as we look ahead, you have to be more careful and alert to what is happening with your data.

For many companies, Digital Transformation, moving to the cloud and using AI based applications to super charge their operations, is a do or die situation. In Mindbridge’s case, auditors that don't use AI will be replaced by auditors that do use AI. It offers major productivity advantages, and improves risk speed on anomaly detections – everyone wins.

AI is also a horizontal technology. It's going to help companies do a better job. In today's environment, we are dealing with big data, and you need the AI to help you make sense out of volumes of data to uncover what you cannot easily see.

Governance also plays a strategic role in AI practices. But if you use it as a tool, then it's basically like any other tool to help you do your job better. Because if you don't use AI, from a competitive perspective, you are going to be disadvantaged. And there is no question that in any profession that has a less than five key activities in what they do, these types of jobs are going to be more easily replaced by AI.

If you are a receptionist, AI is already replacing these roles rapidly with automated attendants that take your calls, book your appointments, and advise you on important matters. We already can see that retail cashiers are being increasingly replaced by smart check out systems. Banks in Asia are experimenting with only smart systems or smart robots serving customer inquiries. No one has access to people, unless they have over $1M in assets in the bank. One bank to watch leading in smart systems is the  China Bank which has over 360 branches; over 1,600 smart machines are ramping up to service their tech-savvy customers and reduce staff operating costs from AI and smart robotic technologies.

Eli also stressed what is important is that the majority of people are using AI for good, but you cannot ignore things like deep fake, and others that are potentially could hurt individuals.  

Board directors and CEOs must  find the mechanisms to block bad actors that are compromising the evolution of AI for Good. We know in medicine, how helpful AI has already been, as in many other walks of industry, AI is a very useful tool.

Humanity will only benefit from AI as long as AI is for good and we learn about it, trust it, and evolve with it. Board directors have a duty of care responsibility to ask the right questions of their CEOs. Simply ask, do we have an AI strategy for our business, and the rest will unfold at the pace of your smart questions. See my blog to provide you with questions to help board directors and CEO’s get underway with their AI journey.

Research Note:

Interview with Eli Fathi, CEO of Mindbridge AI. (Sept 2020). To see the full podcast interview with Eli with Dr. Cindy Gordon, you can refer here.

Read My Blogs:

Why Board Directors And CEOs Need To Mitigate AI Bias Risk This blog discusses the acceleration of data bias in AI models, introduces five types of AI bias, and identifies key governance questions for board directors and CEO’s to ask their organizations in order to mitigate data bias risks.

Where Is Your Global Organization At In Trusted AI? This blog shares the insights from a recent interview with Cathy Cobey, the EY global trusted AI leader, where we explore: how practicing responsible AI is stacking up, the impact of data bias and key board director questions to ensure CEO’s are managing the new risks that AI presents.

Board Directors And CEO AI Literacy - A Change Imperative. The rapid growing market and interest in AI is being driven by the accelerating cloud and data traffic, much of it from: mobile, the Internet of Things (IoT) and increasingly business leader’s recognition that digital transformation is an imperative to remain in business.

Why Board Directors And CEOs Must Become AI Literate To Lead Forward Board Directors and CEOs must become AI literate to lead their organizations forward and manage risk. Advancing AI Centers of Excellence will be key to enabling the Organization of the Future. What is your AI governance status? This article includes a helpful AI governance check list.

What Every Board Director And CEO Need To Read To Advance Their AI Knowledge. I thought it might be helpful to share some recommended getting started reading, to get the basics down and increase board directors and CEO’s confidence to advance their organizations to get AI right.

About the Author:

Dr. Cindy Gordon is a CEO, a thought leader, author, keynote speaker, board director, and advisor to companies and governments striving to modernize their business operations, with advanced AI methods. She is the CEO and Founder of SalesChoice Inc., an AI SaaS B2B company focused on Improving Sales Revenue Inefficiencies and Ending Revenue Uncertainty. A former Accenture, Xerox and Citicorp executive, she bridges governance, strategy and operations in her AI contributions. She is also a board advisor of the Forbes School of Business and Technology, and the AI Forum. She is passionate about modernizing innovation with disruptive technologies (SaaS/Cloud, Smart Apps, AI, IoT, Robots), with 13 books in the market, with the 14th on The AI Split: A Perfect World or a Perfect Storm to be released shortly. Follow her on Linked In or on Twitter or her Website. You can also access her at The AI Directory., which is a voluntary network tracking AI innovations globally to advance accessible AI networks so companies can find diverse AI ecosystem stakeholders。

form：forbes.com