AI has the capacity to transform processes and reveal unknowns, according to Arnout van der Veer
THE ANNUAL RITUAL to define the ten issues that dominate business risks misses one key number: 11. We spend our time focused on the known, but fail to anticipate the unexpected. Off-radar risks are the most dangerous, as the organisation is wholly unprepared for competition from outside, rapid technology shifts or the slow familiar burners which, unnoticed, change the whole environment.
Recently a chief economist responsible for well in excess of half a trillion dollars of investment, related to me his dilemma. “I know that 40% of the S&P companies will be gone in the next ten or so years. Hence it matters less to us the short term performance of companies. What really matters is whether they will be around at all in ten years’ time. On that we want to put our money.”
In a globally interconnected world, it is irresponsible to focus on a list of ten trends
In a globally interconnected world, it is irresponsible to focus on a list of ten trends – there are so many No11s out there. The world is complex, not complicated. Uncertainty is interconnected, off-radar and will eat your breakfast, lunch and dinner if you do not obsess over it.
The scope of the task outlined above can only be approximated through technical assistance. Something bigger than Excel and more ambitious than PowerPoint will have to help. Risk managers need to make big data and artificial intelligence central to their task, not peripheral to it.
Risk managers need to ask themselves if there is a risk that late or no adoption of AI by their business will cost them competitive advantage. What is the impact on the business model and where are the new opportunities and risks? Herein lies the core of the challenge for risk managers.
Answering the challenge of No11 is not a process issue but a capability one. With new technology solutions, use of AI and machine learning, there is now that capability available for knowing some of the unknowns.
These new tools are a step change in our ability to discover and interact with the edge
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StrategicRISK EUROPE EDITION Q1 2017 www.strategic-risk-global.com