In recent years, the business world has collectively honed their focus on risk management, with more and more companies realizing the importance of a well-developed risk management strategy. The reason for this shift is largely rooted in the COVID-19 pandemic, which prompted many companies to revise and re-examine their operations. Others are subject to stringent regulatory oversight, which carry a unique set of risks that must be considered. Evolving views surrounding corporate responsibility have also been a factor.
Countless developers have created enterprise risk management software platforms that provide businesses with the tools they need to identify, monitor, and resolve risks. These risk management software platforms come in many different forms, including industry-specific variations, and are critical to business growth. But the very best risk management software systems are enhanced with artificial intelligence (AI) capabilities.
How is AI Technology Used in Enterprise Risk Management Software?
An increasing number of software platforms are leveraging artificial intelligence and its sister technology, machine learning (ML). By pairing these two technologies, you have a “smart” program that has the ability to make decisions, “learn” and improve itself over time. The possibilities are really significant when this technology is applied to an enterprise risk management software system.
AI can be used to enhance a number of different features within a risk management platform. This makes it one feature that you should absolutely insist upon as you select a risk management software system. Just consider the following.
Identifying and Evaluating Risks – AI can evaluate data in a very efficient manner, which means that this technology can be used to identify potential risks and then, evaluate the severity or seriousness of that threat. AI can actually be more effective than humans at identifying risks, particularly those that can be found in a data set, such as a written document. Artificial intelligence identifies patterns and then evaluates those patterns in a manner that is similar to a human, yet far more efficient in many ways.
Using AI to Predict Risks – Risk prediction is especially useful because you can take action before a threat leads to problems for your business. AI is very effective at evaluating data — including unstructured data — on risky activities or actions. A well-developed AI algorithm can identify risk-related behavior patterns that have occurred in the past and then, it looks for similar patterns in the data set. The result: AI successfully predicts which actions or activities are likely to pose a threat.
AI for Analytics and Insights – The best enterprise risk management software will include comprehensive analytics and insights. When AI is integrated into the platform, you can expect to see richer, more insightful analytics reports. AI can even be used to select the data that is most significant to the user, in addition to identifying metrics that are anomalous and worthy of further investigation.
Third-Party Risk Management Evaluation – Many enterprise risk management software platforms include third-party risk management (TPRM) tools. TPRM evaluations typically include a questionnaire and AI can be used to evaluate those responses. Artificial intelligence is extremely efficient when it comes to assessing questionnaire answers because the technology is objective; AI is focused on finding specific patterns that would likely escape notice by a human. AI can also be used to predict which individuals are likely to pose a threat. If you add machine learning capabilities into the mix, you have a platform that improves its own algorithm, becoming increasingly efficient and accurate over time.
Compliance Monitoring – AI is extremely effective at monitoring for compliance issues in real time. Once a company has established a set of compliance standards, artificial intelligence algorithms can monitor continuously and issue alerts when the situation changes. This technology is quite important for companies in highly-regulated industries such as finance and health care, where non-compliance can be very costly. Many platforms also allow for comparison to standards and frameworks associated with NIST, ISO, NERC-CIP and CMMC.
AI for Fraud Detection – Fraud detection is an important part of the risk management equation, regardless of business type or industry. AI can be used in conjunction with machine learning to perform text mining and analyze social media, databases and other data sets. This technology is very good at identifying suspicious data, patterns and trends that are suggestive of fraudulent activities or other similar threats.
Cybercrime Monitoring – Many enterprise risk management software systems feature integrations with cybersecurity platforms. This can include database monitoring and monitoring of networks and other IT infrastructure. Cyber threats are numerous and varied, ranging from hacks and data breaches, to ransomware, viruses and other malware. These cybercrimes can lead to major losses, especially in cases that involve mission-critical systems or data. AI can come to the rescue, monitoring for behavior patterns and other trends that are suggestive of an impending threat. Some software can even automate the response to these risks, closing down the hatches when risks are detected.
Enterprise risk management software can bring huge benefits to a business because these platforms streamline the processes required to identify and mitigate risk. When you choose a risk management solution with artificial intelligence and machine learning, you can effectively automate many risk identification and monitoring processes. And with machine learning capabilities on board, your algorithm will be continuously improved, resulting in greater efficiency and accuracy over time.
Artificial intelligence is extremely useful for automation and eliminating the need for human intervention. This makes AI a top pick for enterprise operations where you have finite human resources. Companies can maximize productivity when their humans are freed up to work on high-level tasks instead of tending to mundane, automatable to-dos.
Developing a strong enterprise risk management strategy can be a challenge. A comprehensive and multifaceted approach is really critical, yet many companies lack the in-house resources to develop a winning risk management strategy. This is where iTech can assist because we have an expert team that is available to provide high-tech risk management solutions that leverage cutting-edge technologies like AI and machine learning. Contact the team at iTech today to discuss your company’s enterprise risk management strategy.