Today’s rapid pace of technological innovation is impacting business models and processes. Traditional means of assurance – such as corporate governance, board meetings, financial statements, internal and external audits – will need to take into account new factors to remain relevant and build confidence among stakeholders.
Legal and regulatory frameworks haven’t kept pace with digital transformation, and organizations are seeking guidance. This challenge is intensified by the speed of technological change and the breadth of its adoption – which is introducing new risks that demand new responses.
Emerging technologies can provide improved accuracy, better quality and cost efficiencies for businesses in every sector. They can enhance trust in the organization’s operations and financial processes. But this can produce a paradox: the very solutions that can be used to better manage risk, increase transparency and build confidence are often themselves the source of new risks, which may go unnoticed.
There is one risk common to both AI and blockchain – the over-reliance businesses may place on these two technologies.
The extent to which the mitigating actions are successful will largely depend on humans and on their judgment. To mitigate potential risks and maximize potential benefits, you should focus on:
Finding and developing the right skillsets and mindsets: New technologies will be sophisticated and require a steep learning curve even for experienced staff. Acquiring the right capabilities, whether by hiring or training, will be critical. Throughout your organization, you’ll also need to develop increased risk awareness and a shared sense of responsibility to identify and respond to emerging threats and opportunities.
Looking at buy vs. build strategies: How do you best implement new technologies? Do you build these capabilities in-house, or look to third parties, partnerships, or acquisitions to bring in these capabilities from the outside? You may need to rethink your approach to M&A to make the right decisions.
Identifying appropriate success metrics: While some traditional business analysis approaches will remain, the transformative age may require a rethink on how you measure success. One approach that organizations could consider is looking not only at what new technology programs have delivered, but also what they should have delivered – and how their performance ultimately conforms to those expectations.
Trust in the digital age can be both built and compromised by emerging technologies – and the outcome will ultimately depend on the quality of human decisions.
Read the full article here.
EY legal contacts:
Peter Katko – Global Digital Law Leader
Fabrice Natalski – Global Data Privacy Law Leader
Richard Goold – Global Law Technology Sector Leader