The Federation of European Risk Management Association today launches the first thought paper on the implications of artificial intelligence (AI) for risk management at its 2019 Risk Management Forum in Berlin.
This paper aims to guide risk managers on applying AI from a basic understanding to developing their own strategy on the implementation of AI. It includes an action guide and a template for risk managers to develop their own AI risk management roadmap.
FERMA brought together a group of experts from within and beyond the risk management community to develop the work. Their aim was to perform an initial assessment of the potential value of AI to improve enterprise risk management (ERM), and second, to understand how risk managers can be key actors in highlighting to the organisation leadership the opportunities and challenges of AI technologies.
As with every new technology, there are emerging risks and challenges related to AI. Questions on ethics, equality, biases, trustworthiness and reliability of decisions made or suggested by AI, are just some of the topics that need attention. Transparency of algorithms and increasing cyber risks are also questions for the risk manager to address.
The working group expects that corporate risk management will benefit from AI in several areas. From its ability to process large amounts of data to the automation of certain risk management repetitive and burdensome steps, AI could allow risk managers to respond faster to new and emerging exposures. By acting in real time and with some predictive capabilities, risk management could reach a new level in supporting better decision making for senior management.