AI adoption is outpacing AI governance, leaving organisations exposed to risks
At a time when nearly every single organisation is experimenting with – or even scaling up – AI, a new report from Deloitte warns that more efforts are needed to ensure that a robust AI governance is in place – which is key to ensure the technology is used safely, responsibly, and sustainably.
On the back of its plethora of benefits to services, operations and innovation, the adoption of AI is growing rapidly across the business landscape. In its report, Deloitte said that investment in AI across the Asia Pacific region is on track to grow fivefold by the end of the decade, reaching US$117 billion by 2030. GenAI is the largest driver, and is now the fastest-growing enterprise technology around.
This pace and scale of AI adoption has a potential dark side too – leaders are increasingly encountering AI related risks and issues. Of the 900 managers that were canvassed for the study, 86% said they encounter security vulnerability issues, with surveillance (83%), privacy (83%), legal risks (80%) and regulatory uncertainty (79%) other common concerns for senior leaders when using AI.
“The rapid adoption of AI means senior leaders need to move quickly to understand and develop AI governance while the technology continues to advance at pace,” said Elea Wurth, partner at Deloitte.
Yet most leaders are not moving quickly enough or taking sufficient action, highlighted the report. Based on a maturity model it developed (which assessed 12 indicators across 5 pillars), Deloitte said that more than 90% of organisations can improve their AI governance.
That analysis further found that many leaders appear to think they understand AI risks better than they actually do. Around a quarter (23%) say they are ‘highly prepared’ to manage AI risks, but a deeper look shows only 9% have a ‘ready’ level of governance. Organisations with formal reporting systems see five times more queries and twice as many reported incidents, indicating those without these systems may be blind to emerging risks.
Organisations which score higher on AI governance, reap the returns. The report highlighted that organisations with better AI governance are three times or more likely to use AI in customer service, marketing and sales, operations and production, and research and development (R&D), potentially reaping higher productivity gains. Organisations with better AI governance have 28% more staff using AI solutions and have close to 5% higher revenue growth.
On top of that, 45% of organisations report improved reputation among customers as a key benefit associated with Trustworthy AI.
“Having trust in AI solutions is essential for any organisation to fully leverage this powerful technology. Higher levels of AI governance lead to greater returns from AI but most organisations need to do a lot more to capitalise on the opportunities AI brings. Prioritising AI governance practices can be challenging amidst competing priorities,” noted Wurth.
John O’Mahony, partner at Deloitte Access Economics, added: “Our report clearly shows the benefits of developing good AI governance and what senior leaders need to focus on to really reap the rewards of AI implementation.”
