It Ends With AI: Digital Innovation Is Transforming Risk Management

It Ends With AI: Digital Innovation Is Transforming Risk Management

With turbulent regulatory landscapes, escalating tariff wars and growing supply chain challenges, the need to adapt to digital innovations such as AI is no longer an option for risk managers – it’s a survival strategy. Reflecting this, the Verdantix 2024 global corporate risk management survey found AI to be one of the top priorities for increased spending on risk management. As AI continues to permeate business functions, industry leaders are turning to AI-driven risk management platforms that prioritize resilience, compliance and efficient workflows.

To capture AI’s market disruption and influence on risk management strategies, our report on AI in risk management outlines the key use cases and current barriers to adoption based on industry professionals’ insights. Some of the key findings are:

• AI is a significant driver for increased spending on risk management in highly regulated industries and those operating with complex supply chains. These organizations are investing more due to AI functionality that helps to better manage compliance and third-party risks. This includes real-time monitoring and forecasts to prepare for geopolitical and cyber security risks.
  
  
• Copilots for risk management are the most widely adopted AI use case. Copilots enhance risk management tools by identifying risks, mapping them to tolerance levels and mitigating them based on industry best practices.
  
  
• Heavy regulation around AI is the most significant barrier to adoption. Stringent regulations – such as the EU AI Act – require cross-border compliance and can result in hefty non-compliance penalties, which is deterring firms from implementing AI into their risk management strategies.
  
  

As AI continues to mature and transform risk management, risk managers should consult with their IT and CISO teams to gauge preparedness and resilience postures against digital disruptions. Firms need to define robust AI governance plans to overcome harmful vulnerabilities before introducing AI into business processes. To learn more about how AI is transforming risk management, read the full report here Market Insight: Use Cases And Adoption Challenges For AI In Risk Management.