Environmental Social Governance ESG on wooden blocks next to a green world made of fake grass

Using intelligent technology to manage risk compliance and governance

All large businesses need to manage risk and compliance. Those operating in highly regulated environments must report frequently and accurately, and so need the technology, processes and reporting procedures in place to do so. Organisations working in less regulated sectors still have stakeholders who expect them to meet ESG obligations and these expectations are likely to increase as ethical performance becomes more important both internally and externally.

This is a hot topic: commentators on websites from top management consultants to IT organisations are talking about how technology – and generative AI in particular – are going to play a central role in managing these critical areas of business.

So here’s our take, as a company with cross-sector expertise in finance and technology, and as a team who speak regularly to CFOs and CEOs about what’s keeping them awake at night.

1. Staying ahead of the regulatory landscape

Digital transformation means that the way organisations work is changing faster than the regulatory landscape. You only have to look at the conversations about regulating AI to see that while forward-thinking businesses are adopting intelligent technologies, regulators and legislators are still trying to work out how to manage them.

Digital transformation is the key to maintaining a competitive advantage. But it throws up its own internal issues when it comes to risk and compliance. According to McKinsey, companies focus on the speed of transition, rather than on the consequences of it. Instead of implementing large, expensive changes for the sake of it, C-suite leaders need to think in the round – choosing solutions that support growth while also mitigating the risk of regulatory or compliance failures.

2. Understanding risk events

At the heart of good risk management is understanding your potential exposure to risk and putting in place realistic mitigations. Banks and other financial organisations are already using technology to manage data and build risk models. By introducing the right AI into your business, you can understand patterns, scenario plan for a large number of potential events and build a risk register that is clearly based on accurate data and insights.

This depth of understanding is even more critical when you are moving into new markets, undertaking M&A or IPO activities or managing other risk-heavy business changes.

3. Real-time horizon planning

Good compliance and ESG reporting is often hampered by poor or out-of-date data. In large organisations, this is usually down to a large number of legacy systems – many of which are unsupported by the original supplier, or aren’t able to talk even to your new ERP system. 

What you need is a solution that connects to all your current systems, collecting data into a central source, where it can be analysed and interpreted in real time. This allows you to have access to relevant, accurate data to help you continuously identify both financial and operational risks, focus your planning, detect business-critical patterns, reduce errors and improve processes.

4. Easy reporting

How much time does your team spend on collating and analysing data – before even starting to put your compliance or ESG reporting together? It’s almost certainly time that could be better spent on commercial activities. 

The benefit of using AI to augment the human intelligence in your team is that all those tasks are completed for you – and you can rely on the results. Fast, easy reporting to the parameters you set internally, and all without having to invest in overly complex or disruptive systems.

Today’s business landscape is both highly competitive and unusually volatile. Whether you operate in a strictly regulated industry, or you want to improve your ability to report on ESG matters accurately and quickly, AI is there to help. Talk to us about how our bespoke AI templates can help you tackle your specific challenges at a lower cost than you think.