In effect, enterprise risk management aims to enable organisations to make better decisions and thus become more successful. As a whitepaper from Xactium observes, however, artificial intelligence (AI) has the potential to enhance this business area.
AI in enterprise risk management
First of all, AI can improve efficiency and reduce costs through general assistance and guidance during the risk management process. The technology also has the potential to help enterprises make better business decisions.
As the whitepaper notes, AI can provide greater predictive insight and visibility of risk. Using AI, risk managers could therefore benefit from a better understanding of the potential consequences of business activity and incidents.
Xactium are now developing innovative new ways of integrating AI into their compliance and audit solutions. Indeed, the company outlines a number of ways in which AI can assist Risk Managers in making the process more efficient and predictable.
Use cases for AI in enterprise risk management
Assistive AI has the potential to aid risk managers in many of their day-to-day risk management activities. Indeed, the report notes that this is both “productive and non-intrusive.”
For example, AI can help group and categorise incidents by matching the words used in an incident description against those already identified in the database. Moreover, AI can also recommend mitigating controls for a specific risk based on an intelligence keyword search.
Predictive AI is also incredibly useful in enterprise risk management. As predictive AI learns from past experience, it is particularly effective in situations where large volumes of historical data are present.
Risk managers can therefore apply this technology to predict the potential cost of a loss or claim. In addition to this, AI can also predict the potential for new incidents to occur based on KRIs and other data sources.
Finally, the report observes that AI is also potentially useful for Audit and Compliance managers as the third line of defence. Indeed, managers can incorporate AI into an intelligent audit needs assessment or breach identification.