An area of computer science that emphasizes the creation of intelligent machines that work and react like humans, artificial intelligence (AI) is being used for speech recognition, learning, planning, and problem solving.
Automating some or all of these activities in the realm of compliance or procurement could deliver big benefits, but according to a new report, executives across both domains are taking a “cautious-but-optimistic” approach to this advanced technology.
Cyber Risk Rises to the Top
In researching its latest “Compliance and Procurement Sentiment Report”, Dun & Bradstreet found that 53% of 630 compliance and procurement professionals surveyed said they “strongly agree” or “somewhat agree” that AI will improve efficiencies and enhance insight within the compliance and procurement function. Yet, 45% admitted to being unsure they had the appropriate skills in place to utilize AI in the next year, Aly McDevitt writes in Compliance Week.
In its report, Dun & Bradstreet also tackled the topic of cyber risk. It says that while AI is looked upon as a driver to help with risk and fraud detection, most executives don’t understand exactly how the technology can be used with third-party risk and compliance programs.
“Cyber security is the top concern in the next six months reported by procurement and compliance professionals,” Dun & Bradstreet notes in its report. “Yet, despite being concerned respondents reported not always having a solution in place to mitigate the risk.”
Keeping Up with the Pace of Innovation
Top of mind for both procurement and compliance, cybersecurity was cited as a “number one concern in the next six months,” Dun & Bradstreet reports. That’s no surprise, given the heightened awareness of the increased risk in the digital world. As corporations’ global footprints expand, more and more data is created. This has resulted in a lot of unstructured data (roughly 85% of all data, in fact).
“The pace of innovation is faster than our ability to grasp it and threats are coming more rapidly than ever,” the firm adds. One issue that procurement continues to grapple with is the fact that most cybersecurity expertise lives within the CIO’s organization, and not within the procurement function.
As third-party risk management and compliance programs become more complex and costly to administer, compliance and procurement functions are looking to solutions that allow for some level of automation, Dun & Bradstreet reports, noting that the top four anticipated areas to benefit from AI include:
- Risk and fraud detection (detection and monitoring of status, changing of circumstance and risks).
- Data gathering and validation (new account setup, campaigns, and ongoing monitoring).
- Risk screening (reducing false positives and remediation efforts).
- Account reconciliation (identifying/merging duplicates and updating records)
According to Dun & Bradstreet, most companies have a shared vision of AI’s benefits for procurement and compliance, but those visions do differ by industry. Financial services and retail most anticipate improved risk and fraud detection, with 60% and 55% selecting this as their top area respectively. On the other hand, 56% of government agencies and 47% of manufacturers believe that data gathering and validation will benefit the most from Artificial Intelligence.
Dun & Bradstreet concludes that AI within the compliance and procurement function is not something that will be resolved quickly. “While half of our respondents believe that AI will improve efficiencies, 45% of respondents were not confident that they have the right skills in place to use artificial intelligence in the next year,” the company reports. “This indicates that training and hiring the necessary talent will be key to any compliance or procurement organization looking to implement AI.”