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AI Deployment Racing Ahead of Governance

In a recent survey conducted by Avalara, a leading provider of agentic AI solutions for global tax and compliance, it has become evident that finance teams are rushing to implement AI agents while the necessary governance infrastructure remains lagging. The report, titled "Agents of Change: How the Race to Deploy AI Agents is Outrunning Financial Governance," highlights the intense pressure finance leaders feel to demonstrate a return on investment for their AI initiatives. A staggering 92% of respondents indicated that they experience moderate to significant pressure to show that their AI investments are yielding tangible benefits, yet only 7% prioritize governance over speed of deployment.

Survey Findings and Insights

The survey encompassed over 1,500 CFOs and senior finance professionals from the U.S., U.K., India, and Australia. The findings illustrate a financial landscape in a race—where the rapid implementation of AI agents is often prioritized over the careful consideration of governance and accountability measures governing their use.

• - Pressure to Show Value: The results reveal that 50% of respondents feel significant pressure to validate AI investments. However, many are struggling as half report that their AI initiatives have provided limited measurable ROI to date.
• - Speed Over Governance: Alarmingly, 71% of respondents indicated that the focus is predominantly on the speed of deployment, with minimal concern expressed for establishing robust governance frameworks.

In addition to these pressures, many organizations have not updated their internal controls to integrate AI capabilities adequately, with 30% reporting that they hadn't done so in the past year.

Accountability Challenges

A notable aspect of the survey is the uncertainty surrounding accountability for AI errors. A significant portion of respondents (23%) indicated that responsibility for any significant AI error would be unclear or unlinked to any individual or team. Meanwhile, 16% believed accountability would fall to the executive who approved the AI implementation.

With 76% of finance leaders lacking dedicated in-house expertise to understand their AI agents, the reliance on IT or external vendors raises further concerns. As Frank Cirone, VP of Commercial Strategy at Snowflake, emphasizes, effectively managing AI necessitates a blend of domain knowledge, AI proficiency, and robust data governance.

A Call for Responsible Scaling

Despite their urgency to adopt AI, finance leaders express a desire to expand AI applications responsibly. When asked about factors that could bolster their confidence in AI expansion, respondents highlighted the importance of accountability features such as:

• - AI agents functioning within existing systems of record (27%)
• - Outputs based on verified tax and compliance data (25%)
• - Compliance validation (25%)
• - Vendor reliability regarding accuracy (24%)
• - Audit trails for each AI action (23%)

Furthermore, features providing "audit-ready documentation" and real-time monitoring of regulatory changes were notably valued, with the potential to increase both trust and operational effectiveness.

The Future of AI in Finance

As organizations increasingly integrate agentic AI into their financial frameworks, the emphasis on trust, transparency, and governance by design is crucial. According to Jim Lundy, a leading analyst, the conversation is shifting from the capability of AI technology to the ability of organizations to control and understand AI actions effectively.

In finance, where outcomes significantly impact organizational health, establishing governance and explainability will be paramount for successful adoption moving forward. Avalara’s comprehensive report provides valuable insights for organizations seeking to navigate this complex landscape, ensuring that as they race towards AI adoption, they do not overlook critical governance practices.

For the full report, titled "Agents of Change: How the Race to Deploy AI Agents is Outrunning Financial Governance," visit Avalara’s newsroom.