Skip to content

Insights

Why AI Risk Governance is Important to Your Organization

The speed with which artificial intelligence (AI) has rolled out into the mainstream in the past year and continues to increase in usage across a variety of technologies has created significant opportunities and equally significant risks. A comprehensive and well-thought-out AI governance framework is essential to identify and mitigate possible risks to your organization. A recent ISACA survey found that only 15% of organizations have a formal policy governing the use of AI technology. In addition to an AI policy, an effective AI governance framework should also include risk assessment, monitoring, ongoing review and revision of risks, policies, and uses for AI as this technology continues to evolve.

Although there are a multitude of risks associated with the use of AI that need to be addressed with governance, three major ones are Bias, Privacy, and Safety.

Ethical and Bias Risk

When it comes to AI, the information that comes out of AI is only as good as the information that was put into the model. With this in mind, it is important to monitor and examine any output that will be used in decision making or communicating with stakeholders to identify and mitigate any bias found. For example, if AI tools are used in the hiring process, it is imperative that any discrimination or even perceived discrimination be avoided.

Data Privacy Risk

Although private source AI tools are available, the majority of AI usage currently is performed in open-source applications. This means that any data an individual provides to the AI tool to accomplish a task will be retained by the tool and combined with all other information that exists in the tool. This is how AI is constantly improving and refining its abilities and responses. It is important that users within an organization understand that personal or proprietary information should never be used in open-source AI, as it carries a risk of inadvertently exposing sensitive information that could set an organization, its employees, or their customers up for a data breach, not to mention financial and reputational losses.

Safety and Reliability Risk

As AI becomes more integrated into various sectors of the economy, safety risks are concerning since AI’s decision-making capabilities have the potential to produce harmful outcomes if the systems are allowed to operate autonomously. Proper testing and monitoring are necessary to prevent grave outcomes from AI errors. Failure to do so could result in financial or physical harm.

Another result of the previously mentioned ISACA survey indicated that only 35% of respondents said that AI risk mitigation was a current priority for their organization. AI governance is critical for organizations to adequately detect and respond to the risks associated with AI usage. As AI continues to advance and permeate the technology landscape, organizations should prioritize a comprehensive governance framework to identify and mitigate risks. Doing so will position organizations to utilize and adapt to AI swiftly and achieve long-term success.

For more information on AI Risk and Governance and more, be sure to visit our SOC & Technology Consulting, Cybersecurity, and Forensic Examination pages, and don’t hesitate to contact Dave Hammarberg regarding our services.

About the Author

Lynnanne Bocchi

Lynnanne joined McKonly & Asbury in 2018 and is currently a Director with the firm. She is a key member of our firm’s System and Organization Controls (SOC) Practice, preparing SOC 1, SOC 2, and SOC 3 reports for our clients. She holds the… Read more

Related Services

Subscribe to Our Newsletter