Author: Ian Schnoor, CFA, CFM

CFA charterholders are held to the highest standards of judgement and decision-making in finance. As AI tools transform every corner of our the industry, the question is no longer whether financial models can run faster. 

We already know that automation will accelerate many processes. New advances are emerging constantly, including the recent ability to automate calculations directly within Excel. The real question for the future is how finance professionals will apply sound judgement to interpret these outputs and convert them into trusted investment decisions.

The rise of AI presents an opportunity, not a replacement. As the financial modelling landscape evolves, the ability to exercise judgement and communicate insights is as important as ever. Just as the CFA curriculum emphasises technical knowledge, professional knowledge, professional judgement and ethics, financial modelling requires more than fast spreadsheets. It demands clarity, transparency, and responsibility.

That is why CFA Society UK has partnered with Financial Modeling Institute (FMI): to raise awareness of the continued need for practical financial modelling skills.

AI Can Predict, But It Cannot Judge

To be sure, AI has made impressive advances in “prediction.” AI tools can now scan large datasets and identify patterns. Yet still, at this year’s CFA Institute LIVE 2025 conference in Chicago, Professor Ajay Agrawal of the University of Toronto noted that AI is incapable of judgement. AI can project cash flows, but it can’t assess whether a strategy is sound; AI can flag anomalies, but it can’t weigh the reputational risk of a corporate decision; AI can optimise scenarios, but it can’t decide whether those align with long-term investment objectives.

Judgement is a deeply human skill. In financial modelling, it is also arguably the most important one. Building a 3-statement model is not just about inputting formulas; it is about conducting research, making assumptions, identifying drivers, and telling the story of a company or opportunity.

That is where the human advantage lies.

More Than Speed

While AI will likely accelerate some aspects of the modelling process, decision-makers will still need more than a spreadsheet that runs fast. They need insights and ideas. They need to be assured that someone on the team deeply understands the business, can explain the numbers, and recommend a course of action.

This is why financial modelling remains an essential, human-led discipline. AI may assist with the mechanics, but humans still lead with meaning.

The Role of Financial Modelling in Business Understanding

Building a financial model is not just about generating “the answer.” It is a process that helps the modeller understand how a business operates, where the risks lie, and what the future might look like. It teaches the modeller to think through complex scenarios, challenge assumptions, and structure their thinking in a disciplined way.

For students and professionals alike, building a model remains one of the most effective ways to truly understand a company or project. It fosters technical confidence and business judgement. That is to say, qualities that AI cannot replace.

Preparing for a Future of AI-Enhanced Finance

As AI becomes more entrenched in our daily work, the need for critical thinking, human oversight, and storytelling will remain. An effective financial model will always need to communicate clearly and earn the trust of the user.

At FMI, we believe that the most valuable finance professionals of the future will be those who can:

• Build models that clearly communicate the story of a company
• Create models that can be used to make critical business decisions
• Use AI tools to generate insights - not just automations

In an AI-enhanced world, the modeller becomes even more central to strategic decision-making.

Learn More

FMI is proud to partner with CFA Society UK to support members who want to strengthen and validate their financial modelling skills.

FMI offers the Advanced Financial Modeller (AFM) accreditation which tests a candidate’s ability to build a 3-statement financial model of a company from scratch during a proctoring exam.

Coming Up

Join me on September 16, 2025, at 1:00 pm GMT for the first part of an interactive webinar series on Financial Modelling – the FMI skills pathway. In part 1, ‘Financial modelling best practices’, I'll present and discuss the tools and skills required to build a best-in-class financial model that inspires confidence and leads to optimal decision-making. This will be followed by Part 2, ‘Checking and reviewing a financial model’ on September 25, 2025 at 1:00pm GMT, and Part 3, ‘Advanced excel skills for financial modelling’ on October 2, 2025 at 1:00pm GMT.