The Growing Need for AI and Risk Management Solutions Integration

By CIOReview | Monday, January 10, 2022

In the risk management area, it is more accurate to state that AI will be a game-changer, but it will change the game one step at a time.

Fremont, CA: The idea of intelligent computers outsmarting and replacing humans has captivated the collective imagination for decades, thanks to famous sci-fi movies and books. Fortunately, that hypothetical nightmare has yet to become a reality. However, another development has occurred: the rise of artificial intelligence (AI), particularly cognitive computing. Artificial intelligence is becoming an increasingly important aspect of our daily life. AI technology is used to power digital personal assistants, cellphones, self-driving cars, music and movie apps, online shopping sites, and any other application that can learn and adapt to human tastes.

The cognitive ability of AI has begun to assist business decisions and increase business performance with the use of traditional analytics and human thought processes. Data mining, machine learning (ML), and natural language processing are examples of cognitive capabilities of AI models (NLP). These sophisticated concepts can be used to educate computers on how to recognize and identify hazards and how to deal with difficult situations. The topic of risk management lends itself to the cognitive powers of AI because typical corporate risks generally consist of unexpected catastrophic events.

How AI and risk management solutions work together

Computers have always outperformed humans in terms of their capacity to execute calculations faster and more correctly. With the introduction of artificial intelligence (AI), computers gained the ability to learn and interpret information faster than humans. Because AI can readily handle and assess unstructured data—information that doesn't fit into structured rows and columns—useful it's in risk management. NLP, for example, is an AI cognitive technology that uses powerful algorithms to analyze unstructured data and generate insights from it.

Risk management solutions based on AI are being used by financial technology businesses, banks, and insurance organizations to help with decision-making, decrease credit risks, and deliver tailored financial services. AI's machine learning algorithms can analyze vast volumes of data for IT security management, risk assessment, and accurate business decision-making. Trello, a digital application platform, has already begun to employ AI to monitor user behaviors and forecast their users' recurring online activity. QuillBot, a content generation and rephrasing tool, bases its business strategy on AI technology, including natural language processing (NLP). These AI technologies can also be utilized to improve organizational risk management, streamline business operations, and make better use of IT resources.