“AI dependency will soon be part of almost every role”
In an era where organizations are adopting AI even without seeing a clear return on investment, Jonathan Lavender of KPMG Israel warns of widening skill gaps: employees who fail to build technological capabilities risk becoming irrelevant, and organizations without a clear methodology will soon discover that AI does not generate real value.
Jonathan Lavender, Deputy Senior Partner & Head of Advisory, KPMG Israel: Your recent executive survey showed that managers in Israel want to adopt AI technologies at a much faster pace than in any other country, yet they are also significantly more concerned about local regulation.
“In Israel, there is a sense of over-regulation. I say ‘a sense’ because it is not necessarily accurate. The regulation is still being formulated. But based on the general experience in Israel, there is indeed, excessive regulation. The DNA of technological adoption in Israel is powerful, but there will always be a regulator who slows things down, halts processes, demands answers, or imposes sanctions if something is not done strictly by the book. I believe it will be challenging to regulate ‘down to the last agent’ within every organization, and for that reason, I am uncertain that regulation will actually impede things. Yet, managers feel that it will.”
What is the global situation in terms of regulation?
“In Europe, it is almost the opposite. People say, ‘There isn’t enough regulation; we are afraid to move forward without clear guidelines.’ They are very guidance-driven: a bank will not implement anything without the banking supervisor’s approval; a car manufacturer will not implement without instructions from the automotive regulator. In the U.S., it’s a mix: some are waiting for guidance, some are charging ahead. Everyone approaches risk differently.”
Your survey also reveals that many executives report that, even after a full year of implementing AI in their organizations, they still do not see a clear Return on Investment (ROI).
"In Israel and Europe alike, we hear executives say, 'We are a year into this journey. We introduced tools, we hired AI experts, and the ROI is far from what we expected.' The question now is what they intend to do with that: will they pull back AI investments? It's unlikely. No entity, certainly not a public-sector one, will say, 'I am not investing in AI.' Even a year from now, it will still be very challenging to see real ROI in organizations that do not adopt a highly methodological approach. What's interesting is that this spans across organizations, sectors, and countries. ROI is a central pain point, typically framed within a one-to-three-year horizon."
The survey also found that in Israel, the outlook is relatively optimistic.
"Since the survey was conducted over the last two to three months, there is a more optimistic atmosphere in Israel, especially compared to the rest of the world. Israelis see the geopolitical and economic uncertainty, but they feel that things will improve. In contrast, globally, there are issues around Trump, tariffs, U.S.–China tensions, and uncertainty over trade agreements, all of which make investment decisions very complex. And still, no one can ignore AI. The trend is to bring technologies in, even if the ROI is not yet at full maturity."
“I do not believe in ‘Things will sort out on their own’”
So the starting premise is: we’ll bring in AI, and something will work out? Will the technology mature? Will the market evolve?
“I am not a big fan of ‘Things will sort out on their own.’ It won’t happen without a methodological process. We see a clear distinction between organizations that have a process - leadership that knows what it wants, a precise choice of fields to start with, ROI measurement - vs. organizations that say, ‘Help us navigate AI,’ without defining an objective. The organizations that are the most enjoyable to work with are those that say, ‘We have mapped a particular problem, and technology can solve it. Let’s work together and see how.’ There, the problem is clear, and the likelihood of real ROI is high. In other places, we start with basic questions: ‘Where? Why? What are the performance indicators?’ When there is top-down pressure to ‘put something into action’ but no clear definition, the risk of failing to see meaningful ROI is high. Ultimately, we are expected to raise red flags in the right places, not just ‘bring technology,’ but ensure it truly delivers value.”
Let’s take a step back. You’re an accounting firm. What kind of AI consulting do you actually provide?
“Many firms worldwide primarily provide consulting services, meaning, they look at the current situation, prepare a nice presentation, and tell the client, ‘Implement this.’ In Israel, because of the market structure, most of the Big Four (the four largest accounting firms worldwide. MCR) also entered areas where they perform hands-on work. We took it a step further, especially in digital domains. We have a robust team that builds services and solutions, rather than just providing consulting services. So if a CEO, CTO, CFO, or division head comes with a technological issue or concern, we craft the solution and also implement it inside the organization, in collaboration with their IT team.”"
How did it all start?
“Ten years ago, we brought into the firm a group of employees from IBM, who worked on Watson, which at the time was one of the most advanced projects in the world. The group included developers, DevOps, and QA team members, and it built tools as a tech company operating within a consulting organization. We started with a small core that delivered a major project abroad. Slowly, we built more capabilities and recruited more talent. Over the last five years, most of the group’s activity has been hands-on - writing and producing solutions for clients. The challenge is getting the organization to embrace behavioral changes, create a user experience, close gaps in understanding, and only then convince them with proof of ROI.”
You are describing the structure of a software house inside an accounting firm. How does that work together?
“In Israel, it’s a bit easier because of the ecosystem’s dynamics. Even people starting their accounting internships today want to be part of an organization that embraces innovation. They need to know that the firm is adopting technologies across both audit and taxation. Most students who arrive today immediately ask me about AI: ‘What are you doing? Where are you positioned?’ They want to know they’ll be exposed to technology, because it is a major career asset.”
“We prefer to redeploy employees rather than lay them off”
Let’s talk about employees. We have been seeing quite a few rounds of layoffs, some of which are directly due to successful AI implementation. Is this something you’re noticing among your clients?
“In organizations that we support end-to-end, and have set clear goals - yes, we see organizational changes. However, most organizations are not talking about cutting staff. They are talking about boosting employees’ technological capabilities enabling reassignment to areas with personnel shortages. Organizational knowledge is a tremendous asset. Replacing an employee who leaves is extremely expensive. That’s why organizations prefer to redeploy employees rather than let them go. In any case, unemployment in Israel is not high. Laid-off employees typically find work quickly elsewhere. Israel is a country that adopts technology, so we’re not seeing an unemployment wave because of AI.
“What we are seeing now is mainly turbulence in the tech world: startups that cannot raise funds, mid-sized companies downsizing. In large organizations, we still do not see deep structural change driven solely by AI. But it is still important to say this: anyone who doesn’t learn to use technology will fall behind. In almost every role, there will be growing dependency on technology. Without willingness or readiness to learn, it will be difficult to keep your job.”
One of the sectors people claim AI will replace is actually yours -auditing, financial statement analysis, anomaly detection, and data cross-checking. Do you see this as a threat to the profession or an opportunity?
"A threat is always a good thing. It pushes you toward change. You can't ignore it. I actually view it as an opportunity. We, too, will adopt technologies in areas where people do not really enjoy the work. If those tasks can be handled more quickly and automated with fewer labor hours, that's a significant advantage for us. We're embracing it, and employees want us to do so as soon as possible.
"There are two factors that could slow the full automation of the audit world: the first is the regulators. They also expect things to be done gradually, responsibly, and with controls in place. When a regulator comes to inspect, they will want to see that not only software, AI, and agents did the work, but that there is still a partner who manually signed the audit report, was involved at the right points, and ensured the work was done properly. The second factor is trust. We saw this in a report issued by one of our competitors, which used AI and cited incorrect sources. The report was erroneous, and everything became complicated. That's why one of the fields that will grow significantly is how to adopt AI while ensuring that the information sent to clients or outside the organization is accurate. There will need to be a structured 'Trust in AI' process: human controls reviewing the report, and in case of an error, reverse engineer the process to understand what the AI did."
"For employees, using AI is a matter of survival"
Lately, we're hearing more and more talk about AI being a bubble feeding on itself, a circular economy of hype. What do you think? Is it all going to blow up?
"The reality is somewhere in between. On the one hand, yes, there is a self-feeding hype. On the other hand, these tools absolutely change how work is done; they genuinely address areas where there aren't enough people or enough skills. It is not just hype, but tech companies are certainly capitalizing on it. Inside our organization, I see the eagerness, especially among the younger staff members, but not only them. Everyone wants to try it, to understand how it affects their day-to-day work. In the past, you would hear hype about other technologies; now it's AI. In a few years, the focus may shift to quantum. We are already taking our first steps there, supporting investment bodies as they enter the field. If and when the world moves vigorously toward quantum, the question of whether AI is a bubble may become irrelevant."
What advice would you give to the younger generation entering the job market today?
"First, look for an organization that embraces technology, is involved in innovation, and whose leaders honestly view this as their focus. That will shape your skill development. Second, as individuals, you must do everything in your power to master these technologies faster than others. Your value to an organization depends on it. The significance of using technology is also a matter of survival. Some organizations will decide to hire only individuals with technological capabilities. Whoever doesn't have them will have a hard time even getting their foot in the door."
