PwC bets big on AI, climate and audit tech
PricewaterhouseCoopers is investing $1 billion in artificial intelligence technology like ChatGPT while also pouring money into geospatial technology to track rising sea levels and other signs of climate change as well as predictive analytics auditing technology, virtual reality and more.
PwC demonstrated several of the products it’s been developing, and where it’s investing its funds on behalf of clients, during a tech showcase Tuesday at its offices in New York. The area garnering the most buzz is generative AI using large language models, with PwC deploying between 150 and 200 of its staff last week to start training a chatbot powered by OpenAI’s ChatGPT.
PwC officials noted that the firm is in the business of protecting client data so it’s not giving client data to the public models of any AI providers as its employees train the chatbot. One of the elements of PwC’s billion-dollar announcement is a technology infrastructure built on OpenAI within Microsoft’s Azure environment.
“We think it’s really important that our people understand both the power of the tools and the responsibility they have to apply the tools in the right way,” said Joe Atkinson, vice chair and U.S. chief products and technology officer at PwC. “There will be a big emphasis on responsible use, but there will also be an emphasis on use cases and innovation, how you think about how the tools can help you do your work and making sure that an organization like ours, that as an ideation comes up, they know where to go as they explore these tools.”
PwC’s data scientists and data engineers are working with Microsoft and other partners to make sure their people can properly train the AI chatbot. On Tuesday, PwC, Microsoft and the contract management technology company Icertis separately announced they’re partnering on an AI-driven approach to contract management.
Some AI experts are worried that generative AI programs like ChatGPT and OpenAI’s next-generation GPT-4 are becoming too powerful and technology providers should take a step back. Accounting Today asked whether PwC should play a role in helping its clients decide how far and how fast the technology should move.
“It’s a role we can play, especially working with our clients, because what we are professing to our clients today is responsible AI, how to use AI in a responsible manner today so there’s no collateral damage from the use of AI,” said Mohamed Kande, PwC US vice chair and global advisory leader. “A lot of the people are saying slow down AI, or do not use AI, out of fear or concerns for any collateral damage, whether it’s bias or whether bad decisions have been made. That’s why people are fearing AI today. But we believe that AI needs to be adopted because that door to AI is open. It’s not going to close. And I will even tell you, the more people forbid it, the more people will try to use it. We are actually saying that AI should be used responsibly, and that is the role that we play every single day. We started five years ago to talk about responsible AI. With the current generation of AI technology that is used today, it has just evolved to the next level.”
Responsible AI use means establishing proper governance, noted Wes Bricker, vice chair and U.S. Trust Solutions co-leader at PwC. “Then the tools can be understood, they can be explained, and that’s important because AI fits into the context of a business system or reporting system, or a customer experience system, an employee experience system,” he said. “It’s not an end in itself, it’s a means to an end, so the more capacity building that management teams undertake and boards undertake, the more responsible we can all be as a business to build trust in society through better understanding governance reporting.”
PwC announced a global investment in 2018 of nearly $3 billion to upskill its employees around the world.
“That investment was all about equipping our people with the technology knowledge and capability that they needed, as well as the technology itself, to transform our business, bring different capabilities to the day-to-day of our business, and change the way that we interacted with and serve our clients, as well as unlock capability for our clients,” said Atkinson. “Our goal was to equip people with the tools that they needed not only to be successful here at the firm, recognizing the fact that many of our great people eventually move to become clients. They start their own businesses, they move into government service, they do all kinds of things. And we felt very strongly and continue to feel very strongly that it’s our obligation given the talent that we have the great privilege of hiring into the firm.”
PwC has developed an application called My+ that helps employees with career development. “Fundamentally, My+ is about how we create a much more employee centric view of our employee experience,” said Julia Lamm, a workforce strategy partner at PwC. “We’re taking a lot of the mindset we bring to our customers to our employee base. Tactically speaking, that means our employees have more say in their careers and are able to have more internal career mobility. They get a lot more development. You’ve heard about AI learning paths, but there are also learning paths that people are just choosing on their own. We’ve built a tool to allow them to do that.”
The My+ application also puts a larger emphasis on employee wellbeing, including mental health, as employees cope with the stresses and longer hours that seemed to increase during the pandemic at many companies.
One way PwC is now training employees is in new skills like becoming a prompt engineer so they know how to feed the right kinds of questions to an AI program. The firm is aware of some of the reported issues with generative AI programs like ChatGPT in which they can “hallucinate” and produce responses that sound correct, but are wrong.
PwC also showcased its geospatial technology for helping clients adapt to the risks of climate change and see which parts of the U.S. and the world are facing natural disasters at an increased pace. It can drill down on maps of the U.S. and other areas of the globe to examine data on rising sea levels, hurricanes, extreme heat, drought and other conditions, and even look at how such extreme weather affects Unesco World Heritage sites.
“One of the big issues companies are trying to get a sense of is the impact of a changing climate on their business model,” Bricker said in an interview. “That comes up in ways like physical risk to their assets. Our geospatial technology investments enable us to evaluate, on the assurance side, how companies are dealing with the reporting. That’s a trust solution around nonfinancial information. But then we’re also able to use that technology when we’re consulting with other non-audit clients on how they are preparing disclosures that are informative for the marketplace, as well as for themselves. Geospatial is connected to building trust around the impact of climate policy.”
That could help PwC auditors deal with providing assurance when clients are doing sustainability reporting to help verify the impact of forestry, manufacturing and other types of industries on the environment.
“This is where our New Equation strategy really comes together with people led and tech enabled,” said Bricker. “We need the right people with investments in their capacity to understand science-based data, statistical information and mathematical understanding of how it is correlated. Those correlations are really enabling us to make better decisions. Whether it’s science, technology, engineering or math, traditional STEM, those capabilities combined with really great technology ae what enable us to bring a very different experience for our people and for our clients. That’s true on assurance engagements, audits, as well as providing advice.”
PwC showed off some other innovative technologies at the event, including the use of a virtual reality headset for navigating “smart venues” like tennis stadiums, with the help of Microsoft Azure technology. The VR technology can also be used in other types of venues like restaurants, hotels and stores, as well as in any business that can put sensors in their equipment to determine if something is going wrong or about to go wrong.
In addition, PwC has been developing predictive analytics and data analytics technology for doing audits and spotting patterns and outliers.
“We believe that the audit of the future is one that brings together the best of our people, the critical skill sets and capabilities that they have, the judgments that they make, the professional skepticism that they deliver, together with great technology,” said Bricker. “Our predictive analytics capability brings together data and AI in a new way to help us understand how a company’s performance compares to other indications from the marketplace. It’s in connecting dots in a different way through predictive analytics that we can spot items of interest. That’s why our investments in people and technology — not one or the other — creates additional value. It’s the synergy of the two that creates a very different level of value, quality and trust.”
One PwC official demonstrated how predictive analytics could be used to spot patterns in how a company generates its revenue. An engagement team can upload a set of variables that they know will have a predictable and plausible relationship with a company’s revenue, whether internal or external, financial or nonfinancial. Once the data is ingested, the tool takes the revenue information, and compares it one for one against a library of 30,000 different external economic indices, and identifies the five external variables that have historically correlated the closest with that particular reference. These are then presented to the auditor to assess for relevance and possible inclusion in the analytic. That can provide some interesting insights that can be shared with management about what some of the key drivers of their revenue have been over the past several years.
Despite predictions that AI could mean a loss of jobs for accountants and auditors, Bricker is confident there will still be demand for accountants, especially those who can learn to use the tools to their advantage. Other PwC officials noted how generative AI can be used as a “digital twin” or “co-pilot” to help employees and clients do their work more efficiently.
“I think accounting is resilient across technology cycles, business model changes and economic variations,” said Bricker. “Accounting will incorporate new technology like AI, and accounting will enable us to better understand the governance of AI, to explain AI and its impact on customers, employees and suppliers. It will enable us to understand the investments that are being made in technology. It will help us understand the outcomes of all of those investments in terms of financial performance, financial position, but also the broader impact. That’s why I believe accounting is resilient. At PwC, it’s accounting as a capability, together with other capabilities like science, technology, engineering and math, that produces a community of insight for greater trust. And that aligns with our purpose of building trust in society, and solving important problems. That interest always comes before solving problems.”
He doesn’t think accountants will be helping businesses decide which jobs could be eliminated by AI either.
“What accounting does is it helps us understand the importance of talent development and upskilling,” said Bricker. “Some people say AI is coming for your job. I don’t see it that way. I think people who understand AI and are trained in AI are coming for your job. The opportunity is for us as business leaders to not leave anyone behind, to provide the training, to provide the skill sets, to provide the capabilities to address a new technology cycle in AI, and the way that AI will help enable business and enable trust.”
