Author: Florentina Șușnea, Managing Partner, PKF Finconta

In the era of information accessed instantly, mistakes can be expensive. Companies that want to succeed in the world of artificial intelligence must have a risk optimization approach resulting from the exploitation of such technology. Risk management means building the confidence of the factors involved in the ability of the company management to adopt the change but also the involvement in the use of artificial intelligence.

Transferring tasks from employees to the impersonal performance of software introduces risks to the ordinary operations of a company. With the technical, ethical and social risks associated with such a transfer, the need to identify, measure and offer relevant solutions is outlined.

Risk management in the artificial intelligence world

Risk management is more than preventing the danger of reputation, legal or regulatory implications. Given the risk-oriented discourse of artificial intelligence adoption, risk management becomes an important tool for building trust. In this sense we identify 5 points of support for the trust:

1. Support - Emphasizing the benefits of artificial intelligence and how they will improve the quality of the products or services offered.
2. Competence - Artificial intelligence and how its use will increase brand visibility, improve the product, service, and experience of an organization's stakeholders.
3. Consistency - Align the use of artificial intelligence to the stated purpose of the organization and support its achievement over time.
4. Openness - Communicating and engaging effectively with all stakeholders on the use of AI and potential benefits and risks.
5. Integrity - Confidential design and use of artificial intelligence according to the expectations of the factors involved.

Efficient risk management is demonstrated not only by the structure of processes but also by the responsibility of those who make this management and who convert intentions into behaviors. Regardless of the level of autonomy of the artificial intelligence, ultimately, the responsibility and responsibility of an algorithm has the human factor or the company.

By adopting a risk management system in organizational design, the company only proves the commitment to the responsible use of artificial intelligence. After all, the responsibility for forecasts, decisions, and behaviors of artificial intelligence is held by those in control of it.

Understanding how artificial intelligence works is an ongoing process. How and when risks can increase is not known and that is why many AI systems are considered an implicit risk that requires a cautious approach.

To mitigate risks, various tools and platforms are developed to help organizations quantify the impact and confidence of their artificial intelligence systems.

Measuring the risks of artificial intelligence

In developing a trusted AI platform, there are three important components to risk management:

1. Technical risk - Evaluates the basic technologies, the technical operating environment and the level of autonomy.
2. Impact on stakeholders - Consider the purpose and objectives of the agent controlling AI and the financial, emotional and physical impact for external and internal users, as well as reputational and regulatory risks.
3. Control effectiveness - Consider the existence and operational effectiveness of controls to mitigate AI risks.

Together, they provide an integrated approach for assessing, quantifying and monitoring the impact and confidence in the implementation of AI.

A trusted AI platform uses interactive evaluation and operating tools to build the system risk profile and then an advanced analytical model to convert user responses into a composite score that includes technical risk, stakeholder impact, and control effectiveness.

In conclusion

In developing a risk reduction strategy, it is important for an organization to use an integrated approach that takes into account the objectives of the AI ​​system, the potential impact for stakeholders, the technical feasibility and maturity of the control mechanisms, and the operational risk tolerance.

If they want to be competitive and grow faster, companies need to access artificial intelligence. In the 21st century, there will be no growth without risk and a performing company without artificial intelligence. The future belongs to those who navigate the surge of artificial intelligence.

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About PKF Finconta

For over 25 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.