Artificial Intelligence in Governance, Risk and Compliance: Results of a study on potentials for the application of artificial intelligence (AI) in governance, risk and compliance (GRC)

TL;DR

This paper explores how artificial intelligence technologies can enhance governance, risk, and compliance functions by analyzing a 2021 survey on AI applications in GRC, highlighting potential benefits and areas for digital transformation.

Contribution

It provides an empirical analysis of AI's potential in GRC based on survey data, emphasizing its role in improving organizational decision-making and process efficiency.

Findings

AI can process unstructured data in GRC effectively

Survey identifies key AI applications in governance and risk management

AI enhances decision-making and compliance monitoring

Abstract

The digital transformation leads to fundamental change in organizational structures. To be able to apply new technologies not only selectively, processes in companies must be revised and functional units must be viewed holistically, especially with regard to interfaces. Target-oriented management decisions are made, among other things, on the basis of risk management and compliance in combination with the internal control system as governance functions. The effectiveness and efficiency of these functions is decisive to follow guidelines and regulatory requirements as well as for the evaluation of alternative options for acting with regard to activities of companies. GRC (Governance, Risk and Compliance) means an integrated governance-approach, in which the mentioned governance functions are interlinked and not separated from each other. Methods of artificial intelligence represents an important technology of digital transformation. This technology, which offers a broad range of methods such as machine learning, artificial neural networks, natural language processing or deep learning, offers a lot of possible applications in many business areas from purchasing to production or customer service. Artificial intelligence is also being used in GRC, for example for processing and analysis of unstructured data sets. This study contains the results of a survey conducted in 2021 to identify and analyze the potential applications of artificial intelligence in GRC.