The surge in interest in artificial intelligence (AI) following the public release of ChatGPT has democratized AI capabilities by making them accessible to the masses. This surge has captured the attention of executive management and boards of directors, sparking imagination for new business models and profit sources. Technology vendors have also embraced AI in their offerings and marketing strategies, sometimes rebranding their products to highlight AI integration. Organizations grapple with macro (environmental and societal) issues and micro (internal) challenges that AI can help manage.
The quote “If things seem under control, you are just not going fast enough,” often attributed to race car legend Mario Andretti, underscores the impact of emerging tools like cloud computing, blockchain, data analytics, and the Internet of Things. The evolving landscape of AI poses governance challenges, necessitating risk managers to align AI initiatives with organizational objectives. The accounting profession, in particular, has been exploring AI applications like robotic process automation (RPA) and predictive analytics, with publications like The CPA Journal guiding professionals on embracing AI.
The adoption of AI technologies raises governance concerns related to ethics, transparency, bias, and performance. Professional accounting organizations have released white papers to aid members in adapting to AI advancements. Automation’s ability to replace human tasks underscores the importance of ethical considerations in AI implementation, as outlined in publications like the Chartered Professional Accountants of Canada white paper on building ethical AI solutions. Governance frameworks must address the impact of AI on social media and society at large.
As AI applications rapidly evolve post-COVID, organizations face new geopolitical, social, and cybersecurity risks. The introduction of generative AI technologies like ChatGPT has revolutionized business interactions but also amplified risks. Publications like the International Monetary Fund’s report on “Generative AI in Finance: Risk Considerations” highlight concerns such as privacy breaches, bias, and cybersecurity threats associated with AI advancements. Risk managers are advised to follow frameworks like the National Institute of Standards and Technology’s AI Risk Management Framework to navigate the complex landscape of AI risk management effectively.
In conclusion, AI risk management requires continuous adaptation to evolving technologies and threats. Neutral frameworks and governmental agencies play a crucial role in providing independent guidance on managing AI risks. Consulting firm publications serve as valuable resources for staying updated on AI governance practices. As organizations increasingly leverage AI opportunities, risk managers must dedicate more effort to effectively navigate the challenges and benefits presented by AI technologies.
