The extraordinarily rapid advancement of machine learning in this decade is putting enormous pressure on enterprises of all kinds to incorporate AI into the applications that drive their operating models. The gains in productivity are almost certain to be game-changing, but it is early days, and that is putting risk management in the spotlight as well.
Understanding and Addressing “Unknown Unknowns” in Risk Management
The challenge is that, in many cases, we are dealing with what Donald Rumsfeld taught us to call “unknown unknowns.” These are risks that we have yet to discover, and so we are at a loss as to how to detect them. As a result, we have no sense of how probable or how damaging their impact might be. Needless to say, this can put a real damper on any plan to be a first mover or even a fast follower.
But there is a way forward. CFOs, working with their IT allies, are the keepers of the systems of record, and it is these systems that will provide the first signals that something is amiss. The challenge is that there is an intractable amount of data to monitor, and we do not know what we should be monitoring for. Ironically, the solution is to turn machine learning ourselves.
How Machine Learning Helps CFOs Mitigate Emerging Risks
Machine learning excels at discovering unknown unknowns. Initially, it requires an enormous amount of computational power to do so because it follows every trail in every direction. But once an unknown unknown is discovered, it can develop algorithms that can detect it going forward, enabling controls to protect against it in future transactions. Building up a repository of effective algorithms is a never-ending undertaking, but some vendors have been at this for long enough to give CFOs a real head start.
With ten years of experience in applying machine learning to the challenge of discovering unknown unknowns buried in enterprise data systems, MindBridge is the leader in AI-powered analytics, working first with partners like KPMG to embed its algorithms in audit and assurance applications, and now increasingly with enterprises like Chevron and Shell to continually address risks.
Empowering CFOs to Lead in an Era of Emerging AI
In short, leading companies need not be held hostage by the risk of unknown unknowns. AI-enabled analytics can detect these well in advance of other methods, thus freeing forward-thinking enterprises to embed AI in those applications where it can have the greatest impact.
To learn more about how MindBridge can help your organization harness the power of AI for financial insights and risk management, contact us to connect with an AI implementation specialist. We’ll work with you to explore tailored solutions that align with your goals and set your team up for success.
