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As industries rush to harness the power of generative artificial intelligence (AI), a significant gap in risk management has emerged. According to a report by PwC, only 58% of executives in sectors like healthcare, technology, and financial services have conducted a preliminary assessment of AI-related risks, despite the widespread adoption of the technology.
The report, based on an April survey of 1,001 executives from both private and public organizations, found that 73% of executives either use or plan to use AI, including generative AI. However, many of these leaders are only focusing AI applications on operational systems, potentially overlooking broader risks.
PwC warned that companies slow to integrate AI comprehensively may find themselves lagging behind competitors, making it difficult to catch up. The rapid pace of AI advancements, coupled with the challenges of managing associated risks, is becoming increasingly apparent to business leaders.
The World Economic Forum (WEF) echoed these concerns in a July 2023 report, highlighting that three out of four Chief Risk Officers (CROs) view AI as a reputational risk to their organizations. Additionally, 90% of CROs expressed support for stricter regulation of AI development and use, with nearly half advocating for a slowdown in AI advances until the risks are better understood.
Primary concerns
Among the primary concerns are the “opaque” nature of AI algorithms, which can lead to unintended data sharing and biased decision-making. Furthermore, AI is becoming a potent tool for generating false information, or “synthetic content,” which the WEF predicts will manipulate individuals, damage economies, and fracture societies in the coming years.
PwC underscored that managing AI risks is not a one-time effort but a continuous commitment that must be integrated into every stage of AI technology development, deployment, and monitoring. As AI continues to evolve, the pressure on businesses to balance innovation with risk management is likely to intensify.
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