Fireside chat recap with Dow Jones Risk and Compliance: AI and the supply chain
Last week, we shared the stage with our partners Dow Jones Risk & Compliance at the Economist Impact’s General Counsel Summit 2023. Our CEO, Chris Green, co-hosted a fireside chat with Gavin Proudly, Head of Third-Party Risk Proposition, on the role of AI in the supply chain. Keep reading for a recap of the discussion’s themes.
Traditional due diligence processes
The conversation began by addressing the challenges in the market, with Gavin shedding light on the ever-increasing and often unclear regulatory landscape. He also touched upon the broadening perspective through which companies assess their third parties.
Gavin highlighted the limitations of current due diligence processes, which have struggled to keep up with the broad risk lens through which companies judge who they work with. He emphasised the need for a disruptive change, something that he’s been seeking for a decade.
The opportunities and risks of AI
Our CEO, Chris Green, delved into the possibilities offered by AI. He contrasted the traditional way of conducting due diligence, which historically relied on lists and manual research, with the recent introduction of AI-driven tools that have streamlined reading, analysing and reporting on findings, resulting in substantial time and cost savings.
Gavin touched on how AI can empower general counsels to gain deeper insights into a larger segment of their value chain, aligning with the latest wave of EU due diligence regulations. While traditional manual research struggles to keep up, AI enables organisations to quickly onboard new suppliers, customers, or partners at scale.
Chris further elaborated on the advantages of performing due diligence at an earlier stage in the onboarding process. This prevents frontline or sales efforts from being invested in third parties that will ultimately fail due diligence or fail to deliver value to the organisation.
Ensuring compliance when using AI
The discussion moved towards the risks associated with using AI, where Gavin raised two concerns. Firstly, he pointed out the potential for AI to generate incorrect or misleading information, known as “hallucinating,” which makes it unsuitable for use in third-party risk management and decision-making. He also raised the issue of data privacy risks.
This led Chris to unpack the latest advancements in disambiguation technology and explain how it ensures organisations collect data using AI that’s accurate and compliant with GDPR. For instance, only collecting data on individuals with a legitimate interest, such as an organisation’s customers, and preventing unintentionally gathering data on unrelated individuals.
This shift in the broader business’s relationship with compliance marks a fundamental transformation, with compliance evolving into a department that enables and supports the business, rather than acting solely as a barrier.
To learn more about how AI can improve transparency in your supply chain, check out this blog. Or, read about how to protect corporate reputation in the age of the conscientious consumer here. If you’re interested in how Xapien can help, fill in the form below and we’ll be in touch.
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