Risk is the primary cause of issues within global companies. Intermediaries and audits become an integral part of risk management.
With the use of technology, we can tackle the necessity of using intermediaries and instead use trust technology to assess risk. This includes anything from artificial intelligence to blockchain. Blockchain, in particular, provides a centralised place of data storage for auditors to access.
This helps companies to mitigate risk in situations such as mergers and acquisitions and access true transparency without difficulty. This saves costs and enables improved efficiency.
Different ways we can assess risk
There are different technologies that enable us to assess risk. The two primary technologies applicable are artificial intelligence and blockchain.
Artificial intelligence allows us to assess risk through intelligent data storage, analysis and forecasting. Where human predictions might fail, AI excels. It can take a dataset and transform it into meaningful data.
As Deloitte emphasises, ‘The domain of risk management lends itself particularly well to cognitive computing capabilities, as typical risk issues often include unlikely and/or ambiguous events.’ AI provides a more comprehensive view on the way we do business, because it sees things that we, as humans, don’t. It also has the ability to calculate a myriad of possibilities that a human may not even consider.
AI is also key to identifying fraud in businesses. Through smarter analytics, companies can detect smaller and more insidious cases of fraud to provide better visualisations for the whole business. This ultimately saves both costs and efficiency in the long and short term. Of course, to use these intelligent data analytics, you first need to have access to a collection of data.
Blockchain forms the foundation of trustworthy data storage. Ultimately, it backs platforms to ensure that data is secure, transparent, and immutable. This is an absolute necessity before the data is then accessed and analysed by artificial intelligence. Data placed on the blockchain can not be altered or deleted without the changes being visible to the rest of the network.
Blockchain technology plays a key part in managing risk. It functions as a secure and centralised source of data. It is important to back company data with blockchain technology as it minimises the risks posed by existing traditional systems.
By implementing blockchain as part of the global asset chain, companies can ensure that they know where their assets are going and coming from. This particularly applies to determining ESG risk. Companies can display the risk in their supply chains related to their environmental and social impact.
By implementing artificial intelligence and blockchain technology in their digital strategies, companies globally can ensure that risk is minimised, and cost and efficiency is saved.