The Artificial Intelligence (AI) governance gap is among the key risks threatening business growth in the coming year, according to KPMG’s Top risks forecast: Bottom lines for business in 2024 and beyond report.
The bottom line for business
The three most critical risks for business, known as ‘bottom lines,’ are reported to impact business operations in 2024 and beyond.
As AI revolutionises industries, the report noted that AI investment had increased more than fivefold between 2013 and 2023. Along with its opportunities, AI also brings governance gaps for its ethical and responsible deployment.
“Organisations should prioritise transparency, accountability, and fairness in their AI systems to mitigate potential risks and ensure its responsible integration into their operations,” the report explained.
According to the report, in addition to the AI governance gap, trade policy restrictions and vulnerability calling for operational resilience also threaten business growth.
Regarding global trade policy restrictions, the report noted approximately 3,000 restrictions imposed globally, nearly tripling since 2019, posing challenges for organisations operating in international markets.
“The geopolitical landscape is characterised by increasing vulnerability, driven by rapid technological advancements, climate change, and geopolitical tensions. In 2023, a staggering 91 countries were involved in some form of conflict, a significant increase from 58 in 2008,” the report outlined, further explaining its impact on the global economy, with conflict estimated to have a 12.9 percent impact on global GDP.
Navigating the geopolitical risks
The report urges business leaders to take proactive steps to mitigate potential challenges by conducting a comprehensive risk assessment, staying informed on geopolitical developments, diversifying supply chains, enhancing operational resilience, and fostering strong stakeholder relationships.
