Does AI Negatively Impact Enterprise Risk Management?

Today, more and more businesses are adopting artificial intelligence (AI) based solutions. AI has numerous advantages. However, it can also disrupt business processes and negatively impact profits if improperly managed. Additionally, adopting AI tools can change a business’s risk profile, especially around the stakeholder model and business risk. In this article at VentureBeat, Arthur Cole explains how AI complicates enterprise risk management (ERM).

AI Can Cause Harm

“As the various AI implementations of multiple vendors, partners, and other entities start to communicate with one another, the potential to introduce new risks increases,” says Cole. For example, a new tool within a vendor’s customer relationship management platform can create data privacy and compliance risks across multiple geographical regions. In addition, AI can introduce several unknown risks across various disciplines such as operations, legal, regulatory, and compliance sectors.

Stakeholder Risk

Incorporating sophisticated AI techniques into an organization can change how an enterprise interacts with its workforce. Therefore, organizations must treat AI just like any other employee. Enterprises must give AI a limited set of responsibilities, analyze its performance, and promote it to higher levels of authority if the technology performs per the expectations.

How to Manage Risks

Industry experts believe that the best way to manage risk is to implement proper controls before introducing AI into your organization. To manage the complications posed by AI, industry leaders must conduct a full-stack review of everything that it interprets. To prevent AI from creating difficulties, organizations must ensure to incorporate human interests as the core element.

Every competitive enterprise must consider how it can embrace AI-based models to power its business. AI increases the efficiency of existing services and opens new opportunities that organizations might not have tapped into.. However, business leaders and tech experts within the organization must thoroughly understand how AI-based tools impact ERM and appropriately manage them.

To read the original article, click on https://venturebeat.com/2021/06/18/how-ai-complicates-enterprise-risk-management/.

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