Listen to the audio version of this article (generated by AI).
Listen to the audio version of this article (generated by AI).
The study, based on responses from 1,200 risk management executives, found that companies are increasingly having to prepare for events whose effects can spread across multiple industries and continents at the same time.
Recent tensions around the Strait of Hormuz, for example, have shown how a known risk can quickly develop into a broader business threat affecting energy markets, transport routes, procurement costs and supply chains.
EY said AI could support companies by analyzing large volumes of data, identifying warning signs earlier and detecting connections between seemingly unrelated developments.
Most companies, however, are still mainly using AI to improve efficiency and have yet to integrate the technology deeply into decision-making.
“Company leaders can no longer afford to review their most important challenges only a few times a year. In constantly changing situations, they need to identify risks and make decisions accordingly. Artificial intelligence can help them recognize warning signs earlier and better understand the expected impacts of interconnected events,” said Péter Molnár, head of EY’s business consulting practice.
The research found a significant difference between organizations that view risk management as part of strategic decision-making and those that continue to treat it as a traditional support function.
Among executives in the first group, 70% expect AI to fundamentally transform risk management. That compares with just 40% among companies taking the more traditional approach.
“Many companies today still use AI to perform the same tasks faster. The greatest value, however, may not necessarily lie there,” said Erik Slooten, EY AI Confidence partner.
He cited the example of an AI agent-based system used by a leading European automaker that anticipated the potential impact of a helium shortage resulting from the closure of the Strait of Hormuz.
“Such early warnings can prevent millions in losses while providing companies with a significant competitive advantage,” Slooten said.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
