EY calls for embedding AI in companies’ risk management
Consulting company EY, in a new study, urged businesses not to limit the use of artificial intelligence to automating existing procedures, but to redesign risk management systems with the technology’s capabilities in mind. As Cyprus Mail reports, EY believes that AI’s data-processing speed, scale of analysis and analytical capabilities are becoming necessary to address increasingly complex risks.
In its third Global Risk Transformation Study, the company noted that many risk management departments are still taking a wait-and-see approach to AI adoption. At the same time, the technology is developing rapidly, making this approach increasingly difficult to sustain, EY said.
Risks in real time
EY describes the current risk environment with the term NAVI — non-linear, accelerated, volatile and interconnected. According to the company, risks can emerge suddenly and cause broader consequences for businesses.
Kapish Vanvaria, EY’s Global Risk Consulting Leader, said that the speed, scale and analytical insights AI can provide are becoming indispensable amid rapid change. According to EY, the technology can replace slow, periodic manual procedures with fast automated responses and help assess more variables and scenarios than a human can.
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The company also noted that AI’s analytical capabilities can reduce the impact of human cognitive limitations, including the tendency to seek confirmation of one’s own assumptions, cognitive overload and indecision in decision-making.
More than automation
EY stressed that adding AI to existing processes will not necessarily deliver the technology’s full benefits. Many companies started with platforms for corporate governance, risk management and compliance. Such platforms can standardize procedures, improve coordination and reduce the amount of manual work.
According to EY, an incremental approach remains useful because it allows companies to test the concept, achieve short-term results and requires fewer changes to the operational structure. At the same time, the greatest benefits may come from fundamentally redesigning processes rather than merely improving their efficiency.
Dan DiZio, EY Consulting’s Global AI Leader, said that leading companies are increasingly viewing AI as a foundation for rethinking workflows rather than an addition to them. EY also believes that combining AI with proper oversight and monitoring of AI agents’ work can help companies identify the consequences of crises earlier and respond to them faster.
