Posted on October 22, 2024
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Staying at the forefront of disruptive trends with Cliftons
Everyone agrees that artificial intelligence (AI) is having a transformative impact across industries and roles. One of the most significant topics for discussion is what the accelerating adoption of AI tools means for businesses from a risk and compliance perspective.
To explore this topic in more detail, Cliftons will be hosting a training and strategy session with Emily Wright, a specialist consultant in non-financial risk and executive coach for senior leaders in governance, risk and compliance, and Milinda Kotelawele, an agile governance specialist. This will be an exclusive, invitation only event for Cliftons clients. You can register your interest for this complimentary session here.
This blog provides an introductory overview of some of the content Emily and Milinda will cover, with the in-person sessions a chance to delve deeper and explore specific challenges.
How is AI impacting risk and compliance roles
In a recent webinar hosted by Emily and Milinda, they explored the insights and lessons broadly applicable to risk and compliance officers in various sectors. Three key themes emerged that are crucial for governance, risk and compliance professionals to consider.
One: AI is here, now, and needs to be addressed
First and foremost, it’s vital to acknowledge that AI is no longer a futuristic concept – it's here, and its adoption in risk and compliance functions, although still patchy, is accelerating and gathering momentum.
There’s a range of AI tools already being used in the industry, showcasing the art of the possible and reshaping work. However, it's crucial to recognise that alongside the excitement, there's also a healthy dose of scepticism about AI's real impact and timeline. This scepticism is not unfounded, lead us to the first major area of focus: addressing resistance and fear.
It's natural for employees to feel apprehensive about AI. Common concerns range from fear of job replacement to worries about loss of autonomy. Some employees lack understanding of AI capabilities, while others are concerned about work becoming dehumanised. These fears are real and need to be addressed directly by organisational leaders.
This means leaders must embrace AI and lead by example. It's not enough to simply mandate the use of AI; leaders need to understand and embrace it themselves. By doing so, they can better emphasise the benefits of AI for employees, such as reducing work overload and minimising menial tasks. Including employees in the AI transition process is also vital. When people feel they're part of the change rather than having it imposed upon them, they're more likely to embrace it.
Two: AI is best viewed as a collaboration tool, not a replacement for humans
The second key area to consider is fostering effective human-AI collaboration. To support human-AI collaborations, we need to cultivate an AI-positive culture while maintaining a critical eye. This means clearly defining roles for AI systems and human professionals, implementing collaborative workflows, and providing ongoing training and upskilling opportunities.
Transparency in AI decision-making is crucial and human oversight remains important in successful collaboration. For risk and compliance professionals, this means learning to understand how AI systems arrive at their conclusions. This doesn't mean everyone needs to become data scientists, but we do need to be able to interpret and question AI-generated insights. Encouraging this kind of critical thinking will be essential in ensuring that AI enhances rather than replaces human judgment.
Three: How risk and compliance roles will evolve with AI
As AI takes over more routine and data-intensive tasks, risk and compliance roles in the first and second lines, as well as audit, will need to evolve. This means becoming strategic advisors, focusing more on creating a risk culture than on processing controls. Risk and compliance officers need to be ethical guardians, ensuring AI systems adhere to ethical standards and regulatory requirements. As risk innovators, governance professionals need to identify and address new risks associated with AI implementation and changing business models. Concerns around cyber security, AI accuracy, potential bias in AI and more also need to be considered, each with their own risk profile.
This role as regulatory liaison will become even more critical as AI regulations evolve. It’s essential to stay ahead of changes and maintain open dialogues with regulators. And perhaps most importantly, risk professionals should strive to become AI supervisors, overseeing these systems to ensure they operate within intended parameters and produce reliable results.
Staying ahead means adapting your skills
To thrive in this AI-augmented future, risk and compliance professionals will need to develop new skills like:
- Data literacy and understanding AI fundamentals.
- Expertise in ethical AI application.
- The ability to interpret and explain AI-generated insights.
- Strong communication skills to bridge the gap between technical and non-technical groups.
- An adaptive learning mindset to keep pace with rapidly evolving AI technologies.
As we navigate this new landscape, it's crucial to remember that the AI revolution in risk and compliance is not about replacing humans – it's about augmenting human capabilities. We can position ourselves at the forefront of this transformation by addressing fears, fostering collaboration, evolving our leadership roles, and developing new skills.
Training and strategy days to help avoid compliance pitfalls
Investing in face-to-face training and strategy days will continue to be critical as organisations navigate the AI revolution. Giving your senior executives the time and space to disconnect from daily demands and engage deeply with experts and peers is so important to staying ahead in governance, risk, and compliance – and that’s what offsite locations like Cliftons offers.
As AI technologies continue to rapidly develop, we anticipate a raft of new regulatory and ethical challenges for organisations to navigate. Proactive approaches to training – like compliance training to prevent data privacy violations and unethical AI use, as well as ongoing education to mitigate risk and maintain trust with customers, regulators and stakeholders – will be essential as technologies continue to evolve in scope and application.
Given the importance of compliance, and the potential risks if training is not done well, investing in offsite, face-to-face training where people can focus their attention for the day is incredibly valuable for governance, risk and compliance topics. A dedicated training day helps to foster collaboration and problem solving, with more time for discussions and networking to share ideas and solutions.
Register your interest to learn more
The future of risk and compliance belongs to those who can effectively leverage AI while maintaining the critical human elements of judgment, ethics, and strategic thinking. Integrating AI creates opportunities to drive innovation and create more robust risk management and compliance frameworks for the future.
If you’d like to stay informed, register your interest to attend an exclusive, invitation-only future session with Emily and Milinda at Cliftons. Or to book a training day for your organisation, get in touch with our team to discuss venues, and speaker management.
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