‘Braking’ the risk speed limit: move fast, confidently

Discover how you can unlock speed and innovation in risk management with EY's AI-driven platforms.

In brief

• How does AI enable organizations to manage risks and boost productivity simultaneously?
• What are the potential risks and rewards of integrating AI into risk management strategies?
• In what ways can AI transform traditional knowledge management within organizations?

Most people associate race cars with power and speed, yet it’s the brakes that safely allow for the cars’ ever-increasing velocities. Without elite braking technology, racing at such speeds would lead to disasters at the first turn; a driver couldn’t accelerate with the confidence necessary to win. Similarly, artificial intelligence (AI) provides an opportunity for your organization to move at incredible speed while boosting nearly every organizational quality measure. This means more innovation, increased profits, higher client satisfaction and less stress for your team.

For dozens of years, clients have trusted EY teams to provide leading-class risk management advice that imbues their decisions and actions with confidence and stability. Building on this bedrock, the EY organization has taken a bold step into the future with value-driven, AI-enabled platforms. Consisting of a suite of AI software services, new risk metrics like the Confidence Index, and AI-centric consulting services, these platforms equip your entire organization to “move fast, confidently,” giving you the metaphorical brakes to round corners and come out of every turn ready to re-accelerate. 

At its core, EY teams leverage powerful generative AI (GenAI) that will enable your organization to manage risk in ways that were impossible — until now. Every team member can access the dual advantages of proven EY insights and cutting-edge AI through EY proxy status between your team members and the AI services they need. Every team member can achieve an order of magnitude in productivity gains, in a safe and reliable environment protected by the centralized controls your organization needs to manage the risk profile associated with every AI interaction. 

EY GenAI platform-enabled services can help you take risk management to the next level, but the decision to invest in AI as part of your overall strategy is not one to be taken lightly. There are six reasons that your organization’s risk management function should lead the way to not only unlocking access to AI but accelerating its adoption. 

Mitigating undiscovered and evolving risk

In 2018, renowned technology author Bernard Marr popularized the estimate that 2.5 quintillion (or 2.5 x 10^18) bytes of data were being produced each day, leading to a staggering per annum data creation output of just under 1 zettabyte.¹ In that same year, it was estimated 33 zettabytes of total data globally, with an estimated 175 zettabytes of accumulated data globally by 2025.² In the context of risk management, the “bigness” of this data is important. What matters much more is the richness of the data — the intertwined linking of discrete pieces of information that aren’t interesting or useful on their own, but that once linked to the ever-growing corpus of data, tells a story. It’s within this “story” that you’ll find hidden, unmanaged risk.

An organization’s ability to manage risk has been limited to what it can directly identify and assess. Just like an iceberg, where about 90% of its mass is underwater and invisible, a massive amount of latent risk is hidden within the digital icebergs of organizational data. Traditional risk assessment tools and human-driven approaches make it impossible to find these threats since the data scales much more rapidly than processes and people. 

GenAI technologies can be thought of as “at-scale” automation of human reasoning. This automation of reasoning allows for fast, scalable pattern recognition that enables AI to detect risks that are dynamic and constantly evolving, beyond the reach of human cognition. 

However, the introduction of AI is not without its own risks: from biases in algorithms and risk of inadvertent data leakage to cybersecurity vulnerabilities. While AI helps to uncover latent risks, it paradoxically introduces new dimensions of uncertainty that must also be managed.

Through EY, your organization will be able to control the risks associated with using AI itself. Team members’ interactions with AI service providers are channeled through while anonymizing their interactions, tracking responses, auditing details regarding those interactions, applying risk controls, and assigning both risk and confidence scores to their AI exchanges.

Neutralizing the threat of disruption

AI is a not-so-secret capability available to everyone in your organization’s ecosystem: customers, partners and competitors. Because of AI, all parties in your ecosystem pose disruptive risk to your organization. With competitors, the risk is obvious. With customers or partners, the risk is less obvious but just as insidious; if they boost their productivity by two times their current levels, they will pressure you to meet their newly raised bar — and may punish you if you can’t scale to their demands. Any organization that finds itself lagging in AI adoption becomes a weak link in its own ecosystem. The ripple effect can be far-reaching, leading to disruptions that reverberate through the entire ecosystem.

In the context of risk management, one form of risk that often goes unmanaged is that associated with inaction. Organizations that hesitate, citing “caution” as a reason to maintain the status quo, risk falling behind in an unforgiving market. Adopting AI brings the promise of unprecedented productivity gains and opens the door to disruptive opportunities for innovation that can redefine markets. The speed at which an organization incorporates AI could very well determine its competitive edge. The sooner you start, the further ahead you’ll be in this transformative race, and the less likely your organization will succumb to disruptive forces.

Giving your teams access to AI in a risk-controlled manner is the sort of action that the current AI environment demands.

Aligning with evolving human behavior

Technological advances have a profound and lasting impact on consumer behavior, influencing everything from daily habits to lifestyle choices. One of the most striking examples of this transformative power is the mobile phone. Mobile phones are not just communication devices; they are portable offices, entertainment hubs and even personal assistants. According to a Pew Research study, as of 2021, 97% of Americans owned a cell phone of some kind, and a remarkable 85% owned smartphones.⁴ From work emails to food delivery to transportation services, mobile phones have seamlessly integrated into every aspect of our lives.

While mobile technology introduced new risks — ranging from data security to employee distraction — it also presented organizations with an opportunity for aligning work-life and consumer-life behaviors. Companies that quickly adapted and became more risk-tolerant gained a competitive advantage by enabling their employees to harmonize their work and personal lives. This alignment not only boosted employee satisfaction, but also offered tangible benefits in terms of productivity and efficiency.

AI stands poised to make an even greater impact on consumer behavior. It is now generally accepted that AI’s impact could be measured in the tens of trillions of dollars within the next decade. Unlike any technology that has come before, AI has the capacity to disrupt entire industries and redefine the way we live and work through the automation of human reasoning. The opportunity here lies in removing barriers to AI adoption within the workplace, thereby aligning behaviors and expectations in both professional and personal contexts.

Just as mobile phones became an inseparable part of our daily lives, so too should AI be integrated into our work environments. The key is to treat AI not as a novelty or a specialized tool, but as an essential component of modern work life. Organizations that make AI accessible and user-friendly at work will foster a culture where the benefits of AI are not limited to any particular setting. The result will be a complete alignment of behaviors, whether an employee is in the office or at home, leading to a more cohesive, agile and forward-thinking workforce.

Enabling the rapid development of market offerings

Traditionally, crafting market offerings took extensive research, development and time — sometimes months or even years. However, the rise of AI, particularly GenAI, sets the stage for a seismic shift in the speed and nature of innovation across all industries. Organizations clinging to old models will find themselves outpaced by competitors that harness AI for rapid innovation. Thus, in an AI-enabled world, the long-standing paradigm of extensive product or service development cycles will become obsolete. If this sort of case study was possible in the pharmaceutical industry, it’s certainly possible in nearly every other industry.

As we transition into this new era, every enterprise will need to fundamentally re-evaluate what it offers to the market and how it delivers its products or services. This isn’t just a technological shift; it’s a conceptual revolution akin to how computers transformed computation and how the internet redefined information management. There is no offering too large or too small to tap into GenAI to help drive product or service innovation.

Translating tribal knowledge into institutional knowledge

The trend toward democratizing access to knowledge has been unfolding for decades, notably beginning with the advent of the internet. According to a report by the Pew Research Center, as of 2021, 93% of American adults used the internet, up from just 52% in 2000.⁵ The internet has transformed our ability to acquire information, taking us from an era where most knowledge was often isolated or “tribal” to a time where virtually anyone can “look up” and learn anything.

GenAI is set to take this democratization to a whole new level. Unthinkable just years (or even months) ago, generative models have shown the capacity not only to provide information but also to reason, summarize and generate new ideas. This is revolutionary in that it can turn what is often tribal or specialized knowledge — understood only by a few, and rarely documented or shareable — into institutional knowledge that is accessible to many. Truly managing risk is often based on experience of the risk manager; this reliance on tacit knowledge hinders your ability to scale and introduces the very real possibility that the risk manager’s wisdom will evaporate with workforce turnover. This need to capture tribal knowledge and crystallize it as institutional knowledge was one of the driving forces behind EY GenAI platform-enabled services. With the help of EY, risk managers could, for example, readily assess risk across a mass of legal contracts that even the senior-most risk manager would struggle with.

In the late 1990s, some companies chose to ban internet use, only to find themselves at a significant disadvantage in the early 2000s. Today’s enterprises risk a similar fate if they do not adapt to the rapidly evolving capabilities offered by GenAI. Integrating AI into your processes presents a priceless opportunity to transform tribal knowledge into a valuable institutional asset; failing to do so creates a recruitment and retention disadvantage and diminishes your position in the competitive landscape. It’s a scenario that no modern organization can afford, especially as AI continues to redefine the paradigms of knowledge and productivity.