Artificial intelligence (AI) can “Unlock incredible potential and is an essential part of digital transformation. However, risk management of an ill-defined, continuously evolving and much misunderstood technology that presents as many concerns as opportunities is a key challenge for organizations globally”, stated the MercerMarsh Benefits in People Risk 2024 Report.

The new survey report polled 4,575 HR and risk professionals in 26 countries across eight regions between October and November 2023. Both groups of participants, which were pretty evenly divided in number, identified “increasing health and benefits costs” as their most pressing people-related risk concern facing their organization. Additionally, the mismanagement of AI is also viewed as a significant people risk for their businesses. Here is the key finding pertaining to the top concerns around mismanagement of AI:

Critical concerns over AI mismanagement

53% of survey respondents say, “Mismanagement of artificial intelligence would have catastrophic or severe impact if it were to occur”, according to the MercerMarsh Benefits report.

Source: MercerMarsh Benefits People Risk 2024 Report

The report goes onto elaborate that the improper and uninformed implementation of AI by organizations or their employees can lead to “Bias, errors, loss of intellectual property and knowledge, resulting in legal action, brand and reputational risk.” However, what is most concerning is the over-reliance and complete trust in AI-generated content without thorough or adequate verification, as stated by more than a third (36%) of the respondents.

For businesses, this over-reliance and over trust can create cyber vulnerabilities that are difficult to predict and mitigate, as well as pose potential risks of diminishing critical thinking and problem-solving skills among their employees. It can also hinder employees’ ability to think creatively and independently.

Address AI mismanagement promptly

The report urges HR and risk executives not to delay addressing AI mismanagement. Leaders and their workforce should collaborate across their organizations “To understand the advantages and risks of artificial intelligence, evaluate uninsured scenarios, encourage safe adoption and build a digital-first people strategy”, the report advocates.

Furthermore, the report asks, “Where is the right balance between putting too much trust in AI and underinvesting in a transformative technology?”

The report emphasises that merely banning generative AI isn’t an effective approach, given its easy access and widespread availability.

“Instead, employers should navigate the challenge of enabling employees to leverage generative AI for work-appropriate use while mitigating risks involved”, the report recommends.

Moreover, to fully harness AI’s positive uses, the report advises organizations to “Implement centralized governance, risk and compliance processes to monitor and adapt quickly to emerging legislation, new developments and threats.”

To conclude, the impact of AI on businesses is expected to be profound, transforming the way companies operate and creating new opportunities for revenue and profit growth. Additionally, AI can improve employee productivity and be a positive power for good in the corporate world.

“The potential for AI to be used in business as a force for good is significant. An estimated 300 billion work hours could be saved globally every year, roughly equivalent to an average of two hours per person per week”, observes the Oliver Wyman Forum’s “How Generative AI is Transforming Business and Society 2024 Survey Report.”

Oliver Wyman Forum’s report estimates that generative AI could “Add up to US$20 trillion to global GDP by 2030.”

AI offers numerous business possibilities and comes with a spectrum of risks. For now, the MercerMarsh Benefits report points out that it is imperative for senior leaders to prioritise “Understanding the risks and opportunities presented by generative AI, taking a multi-stakeholder approach and staying ahead of emerging legislation” to confront the mismanagement of AI.