How AI helps mitigate risk during transformation
Before we jump into the role of artificial intelligence in digital transformation, let’s take a minute to understand digital transformation.
What is digital transformation?
Digital transformation is the integration of digital technology into all areas of a business, which in turn leads to a change in how the business operates and delivers value to its customers. With the present economic environment, growing competition and the lowering of physical boundaries, digital transformation is becoming imperative for all businesses, big or small, and most often it includes customer experience, operational agility, culture and leadership, workforce enablement and digital technology integration.
Now that we have understood what digital transformation is and what it entails, we can move on to the role that AI plays in the digital transformation process.
Role of AI in digital transformation
AI has a large part to play in digital transformation and includes various digital innovations such as machine learning (ML), deep learning, natural language processing (NLP), and predictive analytics. Each of these technologies individually help businesses work smarter by systematically analysing their data, automating routine tasks, accurately forecasting and identifying trends that drive growth and profits.
In a recent study, 50% of businesses reported they adopted AI in at least one business function and 75% of them said they plan to digitally transform their operations by 2025.
AI in Security
With its ability to bring large-scale automation and identify many different types of threats — ranging from malware to identifying risky behavior that might lead to a phishing attack or downloading of malicious content — AI in data security has become very crucial. According to a survey by Trend Micro, AI will replace human beings in cybersecurity by the end of 2030.
With increased integration of digital technologies, businesses are using AI in cyber security to defend vulnerable networks and data from cyber attackers.
AI in Collections
The aim to utilize AI algorithms in improving debt collection processes of enterprises has enabled the creation of propensity to pay solutions. With the power of AI, companies can now expect seamless communication to not only connect with debtors but help reduce household debt at no additional cost.
AI and Risk Reduction
AI provides the ability to evaluate unstructured data about risky behaviors and activities in the organization’s operations, and identify patterns of behavior related to past incidents and transpose them as risk predictors. AI risk management and reduction greatly enhance fraud detection, threat analysis and management as well as cybersecurity.
This said, AI tools have their own set of operational and functional advantages, and their own risks. It then becomes important that companies carefully evaluate the use of AI within their operations and understand the risks and rewards when adopting this technology. Systematic planning and implementation of AI can reap the right rewards.
1.What are the benefits of digital transformation?
Increases customer satisfaction, data-based insights, software monetization, high-quality user experience, collaborative and improved communication, increased agility, reduction of human error and improved employee performance, increased operational efficiency and digital growth are a few benefits of digital transformation.
2. How does AI risk management help businesses?
AI automates processes and reduces the room for human error. From fraud detection, threat analysis and management to cybersecurity, AI detects and manages risks that may otherwise go unnoticed, thus improving business performance.
3. How important is AI in digital transformation?
Today, AI goes hand in hand with digital transformation. It includes various digital innovations such as machine learning (ML), deep learning, natural language processing (NLP), and predictive analytics — all of which are imperative to digital transformation — helping businesses work smarter and more systematically.