Risk management and AI
Assessing risk in the era of Big Data
Risk management is the practice of pattern recognition. We look at environmental signals and compare them to historical contexts; we create mental models of what we consider to be a threat, and then match that model to our real-world perceptions to see if we can detect a pattern in the noise. Our ability to recognize patterns and act on them is one of the hallmarks of being human.
In the past, the major obstacle to assessing risk was lack of credible data. Information was scarce and expensive to obtain. With few data points, it was often impossible to see risks or infer the right patterns from the information in front of you: just ask the captain of the Titanic!
Imagine the captain of the Titanic was not only able to scan the seas ahead for icebergs, but from analysis of other ship routes, temperatures, currents, and wave patterns could be made aware of where other icebergs were forming! This type of data processing across millions of variables and data points is the type of task AI was made for.
With the advent of the modern age, the limits of human data processing became more apparent. We became more capable of monitoring our environment and analysing cause and effect, but information began to outstrip our ability to comprehend it.
From not enough data to too much
In the 21st century, we are drowning in information. Around 4.2 million terabytes of data is newly generated, captured, copied or consumed every day, and even within a single organization, information management consumes entire departments with dedicated full-time resources just to secure and maintain a company’s data.
Whole business functions and teams are tasked with trying to make use of this data to inform decision making, and most of our jobs at some point still involve copying data from one spreadsheet into another, in the hopes that connecting enough information together will yield some kind of insight that will give the organization an edge in the market.
AI, or “Algorithmic Interpolation”
AI offers a new tool for digesting the vast amounts of data. Although the acronym AI stands for “artificial intelligence”, it might be better termed “algorithmic interpolation” – a form of pattern recognition that mines the vast body of information humans have created to date and uses it to find patterns in new data.
AI tools can make inferences and detect patterns that no human could conceivably make. The AI model of Volpara, designed to detect breast cancer, is trained on more mammography images than a human clinician could look at in many lifetimes, and is constantly improving due to cycles of reinforcement training.
By now, we’re familiar with the downsides to this technological approach – AI can only look backwards, and in stretching to find patterns to please its users, it can see things that aren’t there. In risk management-speak, “AI hallucinations” can be termed “false positives”; not inherently a bad thing – organisation simply need to have human processes in place to fact
check it and mitigate these risks.
Global Feed from Signal Corp.
Signal Corporation, a member of Risk NZ, is harnessing the power of AI to give organisations the ability to separate the signal from the noise amidst the vast sea of international incidents, threat events, and breaking news across the internet. Their new tool, Global Feed, analyses over 30 million pieces of content per month to enable organisations to be alerted to incidents that may be happening near their facilities, on a Global/Region/Country or even City basis. Filters can also be applied to look for mentioned of organisation names on the likes of ransomware blogs. The advanced AI is able to categorise, geolocate, and summarize events as they occur, providing an accessible stream of updates that can be channelled to the right people at the right time.
With Global Feed, teams and leaders tasked with monitoring risks to their business operations get timely, actionable intelligence categorised by severity and confidence level, so they can make quick decisions to mitigate threats.
Leveraging AI to manage risk
For organisations seeking an edge in their business decision making, or the business leaders responsible for assessing and mitigating risk, AI can provide a way out of the deluge of Big Data; a way to see more clearly and find the crucial patterns that impact a company, its people and its customers.
