Earlier this year, as ChatGPT use began proliferating, and harnessing the technology while keeping one’s data secure was still a mystery to many, Wall Street banks imposed restrictions on employees using it for business purposes. Fast forward to today, and the business case for generative A.I. has become clear.

“We must be proactive about embracing A.I. It’s an essential part of winning in the digital era,” Citigroup CEO Jane Fraser wrote in a LinkedIn post on Tuesday.

“Citi’s innovation labs have been working on A.I.—including the kind of generative models that power ChatGPT—for the past three years,” Fraser said. “In the near term, generative A.I. will drastically improve productivity. Over the long term, it has the potential to revolutionize all functions across our bank and the industry changing how we write code, onboard clients, service customers, detect fraud, develop market research and strengthen compliance and controls.”

Fraser, in sharing Citi’s principles for using generative A.I., added that one is to “stay on the front foot”—be prepared for anything. “Some, for example, have surmised that A.I. personal assistants will be the end of search engines and online retailers as we know it. The impacts on finance will be equally profound.”

The latest research by McKinsey estimates that generative A.I. could add the equivalent of $2.6 trillion to $4.4 trillion annually across 63 use cases analyzed by the firm. For comparison, the U.K.’s entire GDP in 2021 was $3.1 trillion, McKinsey noted in the report.

“Overall, the risks of not embracing generative A.I. far outweigh the risks of engaging with it,” Fraser wrote on LinkedIn. 

Speaking of mitigating risk, that usually falls under the purview of the CFO, the strategic partner of the CEO. And technology often is a critical factor. During a recent conversation I had with Citigroup CFO Mark Mason, I asked him his thoughts on changes to the CFO role over the past five to 10 years. The focus on technology, he said, has proven an important one.

“Understanding end-to-end processes is really important and not necessarily something that would be intuitive or instinctive when you think about a CFO role,” Mason told me. “The other aspect relates to technology, and in particular digitization, and how rapidly both are evolving. And those two are in some ways related because one can enable a more efficient process.”

Integrating deep institutional knowledge with new tech and new team members, he continued, is no small task.

“That’s really important,” he told me, “because we’ve been around for 200-plus years. We’re the byproduct of numerous acquisitions. How do we ensure we keep the institutional knowledge on how those systems have worked, and at the same time bring in a fresh perspective to help evolve?”

Though a CFO needs to become more tech savvy, some aspects of the role haven’t changed, Mason explained. “There’s no substitute for the discipline knowledge—you’ve got to understand finance, accounting, controller activity, treasury, liquidity, capital. You’ve got to understand how the business works. And then you’ve got to be able to bring a talented team together that allows you to actually run it as one operation.”

Successfully implementing generative A.I. likely will prove to be a team effort.

And for insight on how to navigate the market during these unprecedented times, check out the Fortune finance team’s Quarterly Investment Guide released this morning.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Research released by Gallup has found that employee pride in their company's products and services is on the decline. Among exclusively remote employees of all ages, from 2020 to 2022, Gallup saw a "significant drop" in the percentage who said that they are extremely proud of the quality of the products and services their company offers. "This is especially true for workers below age 35, regardless of whether they work remotely, on-site or hybrid and for workers 35 and older who are exclusively remote," according to the report. Meanwhile, younger employees are also less likely to feel great responsibility for the quality of their company’s products and services.

Going deeper

WTW, a global advisory, broking and solutions company, and the Nasdaq Center for Board Excellence, released a survey of 349 board members at global organizations that focuses on environmental and governance areas. Seventy-five percent agree that a coherent ESG strategy helps to create sustainable organizational value and stronger financial outcomes. However, many corporate directors say there are limited resources available to help tackle the specific areas of governance and environmental issues.

“Board members are evolving their ESG agenda from reacting to stakeholder pressure to proactively linking ESG to business strategy,” Kenneth Kuk, senior director of Work & Rewards at WTW, said in a statement. “As a result, we are seeing greater interest in addressing skills and resource gaps and more emphasis on oversight of emerging risks.”

Leaderboard

J.P. Towner, CFO at Dollarama Inc. (TSX: DOL), intends to step down from his position in the coming months to pursue another career opportunity. Towner will remain in his role through the announcement and filing of the corporation's Q2 FY2024 results. The corporation has started a formal search process for a new CFO.

Jonathan Maroko was named interim CFO at Faraday Future Intelligent Electric Inc. (Nasdaq: FFIE), an electric mobility ecosystem company, effective July 24. Maroko is replacing Yun Han, who will continue in her role as the company’s chief accounting officer. Before joining Faraday Future, Maroko served as external CFO at several companies including Gladstein Neandross & Associates, Willow, Lifeforce A-Frame Brands, Kwell Labs, and Arcadia Earth. He also previously served as the discretionary global macro portfolio manager at Mulholland Vista Capital Advisors, LLC, and as an investment analyst at Vanadium Capital Management.

Overheard

“The Fed needs to only look back at its own experience calling inflation transitory to see how long it could take for inflation to turn around—and once a weakening in the economy kicks in, it could come fast."

—Wharton professor Jeremy Siegel wrote in his weekly WisdomTree note