There is no part of tax and trade untouched by the meteoric rise of GenAI – nor the risks it introduces.
In this blog, we’ll explore how the challenges surrounding GenAI adoption in tax and trade also present opportunities for finance leaders to gain a competitive edge by implementing better GenAI practices than competitors. Let’s dive in.
GenAI: The C-suite’s new responsibility
In tax and trade, the adoption of GenAI is not a question of “if” or “when” – but “how soon?”
Already, 81% of businesses believe that GenAI can be applied to tax and accounting functions. Furthermore, as the tasks that once formed the day-to-day of our industry – collecting, filing, reporting – become increasingly automated, new opportunities arise for tax and trade to drive business growth.
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It’s a time of transformation for tax and trade, but the adoption of GenAI is not as simple as its speedy rise to prominence would suggest. With disruptive technology comes new challenges, during a time of already-heightened data concerns and job security anxiety.
It falls on the C-suite to guide their organizations through a time of change. Executives must simultaneously ensure GenAI is being utilized to its full capacity and protect the business from the pitfalls: bad data, disparate systems, integration difficulties, and unhappy employees.
Fortunately, if there’s one thing tax and trade professionals are familiar with, it’s seeing the opportunities within the risks.
Turning tax and trade GenAI challenges into best practices
Best Practice #1: Ensuring accuracy with trustworthy, centralized tax and trade data
Immediately upon entering the market, GenAI gained an unfortunate reputation for being rife with inaccuracy. This is largely due to a phenomenon known as AI hallucinations – instances where GenAI models generate plausible-sounding, but incorrect or misleading information.
For consumers, AI hallucinations can manifest as plagiarized essays, or photos of humans with too many fingers. However, for businesses, AI hallucinations are a more serious concern, with potentially disastrous consequences for tax and trade professionals. Inaccurate tax data analysis can lead to poor decision-making. In tax and trade, mishandled materials can cause fines, reputational damage, or even financial loss. For these reasons, 35% of businesses report a hesitancy to use AI due to accuracy concerns.
But AI hallucinations are not born of nothing – rather, they are caused by bad data input. This can be avoided by partnering with a single vendor whose solutions provide trustworthy, reliable, and centralized tax and trade data.
A reputable, centralized GenAI tool grounds your tax and trade models in sound, company-specific data, thus significantly reducing the risk of hallucinations and improving the accuracy of insights and tasks.
Best Practice #2: Creating consistency by choosing a single-vendor solution
In addition to disrupting numerous industries, GenAI has quickly created its booming industry of new companies, vendors, and tools. This widespread availability has proven to be a double-edged sword; while there are tools and use cases for numerous functions, including tax and trade, different platforms may have different requirements, user experiences, models, and outputs.
A business that uses multiple tools to pull data from multiple sources risks creating a disparate experience across its organization and departments. This can hinder cross-company collaboration and create conflicting, inconsistent results. It also creates difficulties in training employees, as it increases the number of new tools and systems they’re expected to learn.
For this reason, GenAI adoption must be approached in a cohesive, collective fashion. Choosing a comprehensive suite of tax and trade tools from one vendor means drawing from a single source of truth, which provides a unified data foundation that builds consistency, improves collaboration, optimizes support and training, helping organizations realize the full potential of tax and trade GenAI.
Best Practice #3: Seamless integration with existing systems using GenAI tools with built-in APIs.
Legacy systems are always a barrier when it comes to implementing new technology. This is especially true for tax and trade GenAI, which is designed to interface with day-to-day workflows and draw from sensitive data sets. Implementation is complex and time-consuming.
At the same time, organizations recognize the need to act. 47% of businesses are using GenAI solutions or plan to use them within the next three years which means that waiting is not an option for tax and trade teams.
Fortunately, this is a challenge that can be addressed on the vendor side. Often, GenAI platforms offer pre-built integrations and standardized APIs, thus simplifying the implementation process and reducing costs. Some tax and trade platforms can also integrate with existing systems and solutions using APIs, making adoption seamless.
Best Practice #4: Overcoming staff hesitancy by encouraging more positive User Experiences
Despite its exciting capabilities, GenAI remains a sensitive topic within many tax and trade teams, due to employee concerns about having their jobs replaced or made obsolete.
Research shows that 68% of businesses envision GenAI used in administrative, non-client-facing roles, streamlining operations and improving efficiency. This means that GenAI is currently perceived as a tool to enhance, and not replace, human roles.
Nonetheless, tax and trade professionals remain hesitant to adopt GenAI in their everyday workflows. This is a challenge considering that employee adoption is key to successful implementation. For C-suite leaders, tax and trade teams must be comfortable using AI for you to succeed.
This is why user-friendly technology and smooth integration are key to tax and trade GenAI adoption strategies. A user-centric experience can help communicate a business’ use of AI to augment human capabilities while creating more time for high-level analysis and strategic thinking. Furthermore, it is vital that an employee’s first interaction with AI be positive and simple, so as not to create more barriers.
When planning tax and trade GenAI transformations and vendor partnerships, organizations need to include user experience as one of their key considerations.
The transformation of tax and trade is here
GenAI is poised to transform tax and trade for the better – and it’s up to the C-suite leaders to see it through.
As finance leaders, the C-suite is expected to build and deliver a GenAI adoption strategy that will capitalize on potential, drive business growth, and build a lasting competitive advantage. At the same time, it falls on the C-suite to chart a course through the core challenges surrounding GenAI adoption, including:
- Creating process consistency
- ERP and other system integrations
- Tax team’s adoption hesitancy
Only with a unified approach can you guide your business through the challenges and achieve a successful GenAI implementation that will yield benefits for years to come.
In this blog, we’ve explored the opportunities each challenge presents and the role of a reputable, single-vendor tax and trade platform in addressing them. By consolidating data and processes, businesses can achieve greater accuracy, efficiency, and insight, ultimately driving improved business performance.
Furthermore, a single-vendor solution streamlines integration and reduces the complexity of managing multiple interfaces leading to more user-friendly experiences.
For more information on how Thomson Reuters can support GenAI adoption for tax and trade, please visit ONESOURCE Corporate Tax and Trade Software.
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