Generative AI the ‘next big risk multiplier’ says BDO
Business leaders are fundamentally optimistic about the next generation of artificial intelligence but the risks are not yet fully understood, according to a recent report.
The BDO Global Risk Landscape 2023 survey has shown business leaders are largely positive about AI with 83 per cent viewing AI as an opportunity for their business.
The survey found business leaders view the technology as an opportunity to streamline operations, reduce overhead costs, make fast decisions and facilitate complex tasks, such as wider business strategy.
Only 24 per cent of survey respondents considered AI to be a significant or somewhat significant business risk.
“The challenge for companies is to balance leveraging AI’s enormous benefits with managing the risks, not all of which are fully understood,” the report said.
“Existing AI-associated cyber-risks include criminals using the technology to develop sophisticated attacks that are difficult to detect and defend. These can be technical, such as manipulating systems and bypassing security measures, or human behavioural, such as manipulating users into making mistakes that expose organisations to cyberattacks.”
The report also highlighted that AI can be used to develop code for business use which may include security vulnerabilities.
“In addition, AI across different organisational levels may expose internal sensitive data or strategic information,” the report said.
“Using AI to process and interpret data for decision-making is appealing, but the systems are not always transparent or accountable, and can be prone to biased or flawed outcomes. This can expose companies to reputational damage if poor decisions have a serious impact, such as recruitment discrimination, as well as potential financial, governance and environmental impacts of flawed AI-generated decisions.”
Heavy reliance on AI could also lead to new vulnerabilities and operational risks along with ethical concerns about autonomous systems.
“Job cuts might make financial sense, but create reputational risks, while over-reliance can create crises when there is a shortage of human capital,” it said.
While AI is recognised as a risk multiplier and cyber security issues are likely, strategies and processes can be put in place to mitigate new risks.
The main challenges with digital transformation involving AI solutions identified in the survey included data protection and privacy laws at 24 per cent and protecting systems from cyberattack at 23 per cent.
“Cyber security is a high priority globally, with 74 per cent of all respondents saying that cyber security is the number-one risk priority for their organisation and 55 per cent are struggling to handle the speed and sophistication of current cyberattacks,” the report said.
“A worthwhile strategy could be to include AI risks in an organisation’s continuous risk assessment process to evaluate the different potential impacts that the use of generative AI may have on businesses.”
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