Future of the finance ministry: The digital transformation opportunity
A global study of government finance leaders has revealed shared priorities and challenges in an era of unpredictable geopolitics and rapid digital transformation.
The Future of the Finance Ministry study – published by Global Government Forum and sister title Global Government Finance – is based on interviews with 10 senior leaders from finance ministries around the world.
The interviews were led by John McCarthy, chief economist in Ireland’s Department of Finance, working with the editors of Global Government Forum and Global Government Finance. Microsoft is the knowledge partner for the report.
“In a world where ‘disorder is the new norm’, the traditional role of the finance ministry is undergoing a fundamental transformation,” McCarthy writes in the foreword.
Four key themes are identified in the report: the evolving role of the finance ministry in response to uncertainty; the shift to more flexible finance systems that support outcomes; digital transformation and the growth of artificial intelligence; and the battle for talent and trust.
This chapter extract focuses on digital transformation and AI.
Download the full report: The future of the finance ministry: Insights from government finance leaders around the world
Digital maturity varies widely across finance ministries
Our interviews demonstrated that the potential for digital technologies and AI in finance ministries is clear, but that there are barriers to implementation and rollout is typically slower than in some parts of the private sector.
Across jurisdictions, interviewees highlighted wide variation in the digital maturity of finance ministries. While some have automated core processes, many remain constrained by legacy systems – often built in the 1990s – that were “absolutely groundbreaking” at the time but are now outdated. These systems limit the ability of ministries to share data, collaborate across government, and develop a holistic view of public spending.
“Individual agencies don’t have to have the same IT systems… making consolidating information very difficult.”
While finance ministries are working to improve their own digital operations, many are also looking at how they can catalyse digitalisation across different departments too – highlighting their systemic leadership role.
As one leader said, there are obstacles to using digital to improve cross-government efficiency, as departments often have autonomy which means that joining up data is challenging. “Individual agencies don’t have to have the same IT systems or data systems, making consolidating information very difficult,” they explained.
To tackle this, some finance ministries are increasing IT budget allocations for departments – albeit with additional spend being directly linked to how new IT systems can unlock savings in the medium term.
One leader advised their peers to build small, interconnected systems in the finance ministry to improve IT and digital infrastructure and enable agility.
“Don’t build huge systems. If the system is composed of small parts, it’s much easier to adapt to new situations,” they said.
The Global Government Finance Summit is a unique event that brings together senior civil servants from finance ministries around the world. Enquire about attending the Global Government Finance Summit: 14-15 September 2026, Dublin.
The data opportunity
As a result of the need for greater flexibility and agility, better use of data has become a priority for many finance ministries.
One interviewee commented: “We see that data, and using data, is a main part [of the work of the finance ministry].”
“We have a huge opportunity in terms of data analysis right now,” another leader said.
Several interviewees noted that basic processes remain highly manual. As one put it: “Even the collection of gross domestic product data is very manual, so we’re slowly automating some of the work we’ve done in the past.”
In response, some ministries are investing in modernised systems and centralised platforms to improve transparency and analysis.
“We are changing from a financial administration system to a public administration system. We are thinking something broader than just a financial system,” one said.
Among more advanced cases, one ministry reported developing a system to receive financial data from all departments each month, allowing officials to see “what the situation of the budget is” on an ongoing basis.
However, this level of maturity is far from universal. One leader said agility would be hindered without improvements “in how we share data across different agencies and different parts of the government” and that “more clarity over processes and mechanisms to store that data” is needed.
In the same country, work is underway to upgrade some systems to facilitate this, with a further step to put in place a data analysis system – and then AI – to help extract as much useful information from the data as possible.
Progress depends on clearer data standards, improved sharing between agencies, and sustained investment in modern infrastructure, with data modernisation widely seen as a necessary foundation for more advanced analytical tools, including AI.
Webinar: The future of the finance ministry unpacked – and what it means for government – on 24 June 2026, focused on the research’s findings.
AI implementation in finance ministries
These investments in IT systems overall are part of transformation efforts that now incorporate the deployment of AI.
Across all the interviews, finance ministry leaders said their departments are all at least beginning to experiment with AI, albeit to different degrees.
Finance ministries could be described as cautiously optimistic about AI, and many of those currently using it are doing so on generic use cases, rather than those tailored specifically to their work.
In addition, in nearly every case, leaders from finance ministries cite data and security barriers that limit AI’s transformational potential.
As one interviewee put it: “How do we use large language models? How do we use AI? We have a lot of confidential information – you don’t want to share that.”
Another leader agreed that there are what they called “very basic concerns like security” that are stopping them using publicly available AI models extensively. “We have issued guidelines on what good use of AI is, and what to think about in terms of confidentiality.”
As another put it: “You rapidly run into barriers around control of data [and] privacy”, admitting that: “We’re quite cautious about that.”
These concerns are limiting AI use, with leaders describing “pockets of utilisation” or internal use “largely for efficiency purposes [such as] pulling together presentations, summarising data, pulling together submission processes”. Other relatively basic use cases include taking meeting minutes and providing “groundwork research” as part of initial policy development.
Beyond this, AI is being used in more isolated pockets for work such as searching legal documents, or as part of the process for “simpler dispute resolution”.
Even interviewees from some of the most digitally ambitious countries examined in the study said they are at the piloting stage of AI, and that skills are another barrier.
One leader cited what they called “a capability issue” and set out the need to give their officials the space, tools, and training to work out how the technology can be best deployed to meet their own workflows.
Read more: Emerging tech’s potential for public financial management examined in IMF paper
Modernising tax and procurement
Tax collection and procurement were repeatedly cited by interviewees as areas where digital tools could deliver the most immediate operational gains, given the scale, data intensity, and exposure to fraud and inefficiency in these areas.
As governments face tight fiscal frameworks, they are creating more efficient systems that can minimise the ‘tax gap’ and provide revenue for public services. While many countries have dedicated tax collection agencies, they work closely with finance ministries to coordinate policy development with wider economic development plans.
One interviewee commented: “We have a tax collection agency that is very outdated in terms of technology.”
“We have a tax collection agency that is very outdated in terms of technology.”
Tax systems in many countries are based on data that often lags to previous financial years, which limits the ability to make systems more efficient.
In several cases, though, departments are actively using AI’s predictive tools to assess where the gaps in the tax system might be. One interviewee described how their government is in the midst of a programme to transform taxation with the objective of making it possible for people and businesses to pay their taxes automatically.
The mission for tax agencies should be: “How can we, in real time, let people pay their taxes?” they said.
Achieving more advanced forms of tax system automation would require further digitalisation measures, such as mandatory e-billing, as well as expanded access to financial and business data.
However, regulatory and privacy concerns remain significant barriers. Without finding a way forward on these issues, “then we are facing an increase in tax fraud, as well as in money laundering”, one leader noted.
There is also a similar interest in using AI and other predictive technology in procurement.
Many countries have worked to tighten procurement rules, with the objective of boosting trust and tackling fraud in public spending.
However, there are still challenges. One leader highlighted a recent procurement where they had been faced with an unscrupulous supplier: “He falsified a lot of documents to deceive us… our staff, honestly, they were not sensitive enough to those requests.”
They highlighted a need to “change the mindset” of public servants to be more aware of the risks in procurement, and others have also tightened processes to reduce fraud “But it results in probably more of a bureaucratic approach than there needs to be,” one said.
In many jurisdictions, the way to reduce bureaucracy and increase oversight has been to develop digital procurement platforms.
One leader highlighted how their government has developed a digital system for making all procurement more transparent. “We are trying to implement this for everyone who uses government money, in order to be able to have better control and to prevent fraud,” they said.
Read more: UK government pushes ‘predictive technology’ in new debt management strategy
The future of the finance ministry: embracing full digital transformation
While there is potential and progress on digital transformation, it is clear that finance ministries are not at the leading edge of government use of digital and AI. Indeed, some say that they are speaking with more innovative departments to see how they can learn from them.
Finance ministries are all exploring the potential of new technologies but are also seeking reassurance and systems to ensure data is protected.
To tackle many of the issues in this chapter, leading finance ministries are working to develop their own AI systems. One country is developing its own large language model for public servants to use. “We need to have our own systems because of the [need for] confidentiality,” the interviewee said.
Another country is developing more generic ‘GovChat’ systems that are not specialised for the finance ministry, but are instead government-wide, technology-agnostic platforms that remain within the protected government network to allow for the safe synthesis of sensitive information. This also includes a ‘Budget Bot’ AI tool designed to bring together historical data to improve fiscal policy advice.
Meanwhile, the world of finance itself is rapidly becoming more digital, with the rise of tokenisation and digital money such as cryptocurrencies. Finance ministries can find themselves setting policy on such fintech-fuelled developments while also assessing the use of these technologies for their own purposes – working with central banks on developing central bank digital currencies, for example.
In addition, there is crossover into the world of digital identity, digital credentials, and digital wallets.
Writing in the afterword, Valentina Ion, public finance and social services global lead at Microsoft, said: “It is vital to recognise that AI is not an IT function; it is a cross-functional leadership imperative. While generative AI offers a transformational opportunity, realising it requires intentional governance, security guidelines, and a focus on quantifiable impact – so that it is possible to translate digital investment into measurable cost savings and improved revenue collection.”
She added that: “Agentic AI is already reshaping public finance into a ‘human + AI agent’ workforce – where digital colleagues streamline and orchestrate end‑to‑end fiscal workflows to unlock step‑change gains in productivity, efficiency, and decision quality, while skilled public servants remain firmly in control through strong digital and AI capabilities that amplify value creation across the wider economy. An AI strategy and governance are must-haves for any public finance agency.”
Interviewees for the study were: Lai Chung Han, permanent secretary, Ministry of Finance, Singapore; Carlos Guberman, secretary of the Treasury, Argentina; John Hogan, secretary general, Department of Finance, Ireland; Andrew Lai Chi-Wah, permanent secretary for financial services and the Treasury, Hong Kong; Struan Little, chief strategist, Treasury, New Zealand; Chidozie Ofoego, financial secretary, Government of Bermuda; Dorothée Rouzet, chief economist in France’s Treasury; Merike Saks, secretary general, Ministry of Finance, Estonia; Bas van den Dungen, secretary general, Ministry of Finance, The Netherlands; and Matt Yannopoulos, secretary, Department of Finance, Australia.
About Ian Hall and Richard Johnstone
Ian Hall is editor, Global Government Finance, and Richard Johnstone is executive editor, Global Government Forum.
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