A recent investigation conducted by Riskonnect has highlighted the significant hazards linked to the integration of generative AI within corporate environments. While a vast majority, 93%, of corporations acknowledge these hazards, only 9% consider themselves sufficiently equipped to tackle and mitigate these looming dangers.
Corporations struggle to keep pace with AI risk management
The findings from the research indicate a disconcerting deficiency in addressing AI risk management issues across the corporate spectrum. A mere 17% of leaders in risk and compliance have undertaken formal measures to impart knowledge and brief their respective organizations on the potential hazards associated with adopting generative AI technologies.
Jim Wetekamp, the Chief Executive Officer at Riskonnect, has voiced his apprehension regarding the tardy response to this emerging threat, stating, “Generative AI is advancing at an unprecedented pace, bringing forth a fresh wave of business risks. Our research findings highlight the sluggish corporate response, creating vulnerabilities across the entire organization. The rise of generative AI is the latest instance of how rapidly the contemporary risk landscape evolves. We have unequivocally entered a novel era of risk.”
Primary concerns: Data privacy, cybersecurity, and beyond
The study underscores various pressing concerns among corporations in relation to generative AI. Among these concerns are data privacy and cybersecurity issues, with 65% of corporations expressing apprehension. In addition, 60% of respondents are troubled by the prospect of employees making decisions founded on erroneous information, while 55% are concerned about potential employee misconduct and ethical quandaries. Intellectual property risks and copyright infringements also loom large, with 34% acknowledging these as valid concerns.
Present predominant risks
Even as generative AI assumes a greater significance, corporations remain susceptible to other risk factors. The leading four risks impacting organizations comprise talent shortages and layoffs, recession risks, ransomware, security breaches, and cyberattacks sponsored by states.
Notably, 63% of corporations have refrained from simulating their worst-case scenarios, leaving them ill-prepared to handle and navigate unforeseen risks. A mere 5% feel adequately equipped to grapple with unforeseen and unpredictable risk events in the future.
Another notable issue highlighted by the study is the lack of trust in risk management. Only 23% of organizations are confident in their risk management data’s accuracy, quality, and applicability. An even smaller fraction, merely 5%, exudes a strong confidence in their capacity to extract, consolidate, and communicate risk insights for informed decision-making.
Among the challenges that corporations associate with labor shortages and layoffs, the research spotlights mistakes and shortcuts precipitated by worker burnout as the most significant worry, with 66% of corporations expressing concern. Following closely is the apprehension of an inability to achieve strategic objectives, a concern 41% of organizations hold.
Investments in confronting emerging risks
Despite these challenges, corporations are taking proactive measures to address emerging risks. A noteworthy finding is that 52% of corporations have appointed a chief risk officer, and an additional 6% plan to do so in the forthcoming 6-12 months. This reflects the growing acknowledgment of the critical role of dedicated risk management leadership.
Moreover, despite layoffs occurring in other sectors, 82% of corporations affirm that their workforce dedicated to risk management has either grown or remained stable over the past half-year. Furthermore, 28% of organizations have reported increased budget allocations for risk management technology during the same timeframe.
Jim Wetekamp, CEO of Riskonnect, has commented on these encouraging changes, stating, “We are witnessing significant and positive shifts in how corporations identify, prioritize, and manage risks. Present-day risk leaders acknowledge that the threat landscape is ever-evolving. They strategically plan for worst-case scenarios, prioritize enterprise-wide visibility, and invest in tools to combat the comprehensive and interconnected spectrum of risk.”
