Info-tech

AI, blockchain tech can potentially increase data breach threat: Accenture study

Our Bureau Mumbai | Updated on December 04, 2019 Published on December 04, 2019

Adopting artificial intelligence (AI), blockchain and robotic process automation (RPA) might not be such an easy task for financial companies given that there could be many unintended consequences. A new study has found risk managers are grappling with the potential downsides of AI and new technology.

Financial firms are struggling to assess risks of disruptive technologies, with 72 per cent of risk managers surveyed by Accenture saying complex risks are emerging more rapidly than their own skills are advancing.

However, many are open to new strategies to better manage emerging threats.

Disruptive technology risk has a bigger impact today than two years ago with data breaches posing a bigger, more complex threat. Operational risk is a traditional but ever-present threat.

Among the key findings of the Accenture study, only 11 per cent of risk managers describe themselves as fully capable of assessing the risks associated with adopting AI across their organisations, and even fewer said they are fully capable of assessing the risks associated with RPA or blockchain (9 per cent and 5 per cent, respectively).

As the external risk environment becomes increasingly complex, risk teams realise they must adapt their approaches to contend with new threats and the heightened pace of change.

Some 72 per cent of respondents said complex, interconnected new risks are emerging more rapidly than ever before. More than four in 10 respondents (42 per cent) said the risk function is, at best, only somewhat effective at responding rapidly to changes in the external risk environment.

"As the risk landscape continues to shift and evolve - with increasing complexity in protecting against data breaches and managing new, interconnected threats - risk managers are not able to evolve at the same pace as technology," Steve Culp, senior managing director at Accenture said in a statement. Culp leads the company’s Finance and Risk practice.

While disruptive technologies, including AI and natural language processing, can present risks across organisations, the survey revealed a strong correlation between the deployment of these technologies and robust risk-readiness within the risk function itself.

Data challenges are also impeding adoption of advanced analytics. The report reveals that risk functions' difficulty to make better use of these technologies, particularly advanced analytics, is compounded by data challenges. The top three obstacles to implementing advanced analytics across the risk function are data residing in silos, lack of clarity around regulation, and integration challenges with legacy systems.

Encouragingly, the report notes, risk managers know that they need to improve how they collect and analyse data to generate useful insights. For instance, nearly two-thirds (63 per cent) said they are improving their ability to collect enterprise-wide data, and 66 per cent said they are honing their ability to analyse it.

The study notes a need to obtain traditional data faster and to draw from new data sources, including marketing and social media, to help respond to threats and add value across the business.

Published on December 04, 2019
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