While risk managers do not need to understand the detailed intricacies of every new technology, it is imperative that they have a fundamental understanding of technologies being considered and how certain technologies can help in risk management.
Last week on GC Capital Ideas we explored why and how risk managers can play a critical part in successfully adopting new and emerging technologies. Here we focus on a few technology vehicles, as discussed in this year’s Excellence in Risk Management survey from Guy Carpenter sister company, Marsh, and RIMS.
- In recent years, cloud computing and open source software allowed artificial intelligence (AI) to become more useful. AI, which increasingly works in combination with robotics process automation, has the capability to flag emerging risks and identify relevant trends. To make AI an effective utility, risk managers should first optimize data and analytics functions.
- Blockchain can be an effective tool in managing risk and insurance ecosystems if organizations enable an extremely secure method of tracking transactions. Contrary to many people’s perceptions, blockchain can be utilized across industries beyond bitcoin. It is a digital ledger that can be shared across a network of computers with thousands of users. This allows input from multiple parties.
- Internet of things (IoT) systems allow multiple devices and equipment across diverse locations to be connected and to share data. For instance, it allows a transportation company to monitor the location of its trucks and the temperature of its cargo. IoT systems allow decision-making in real time and can simplify regulatory compliance. Risk managers need to be aware that implementing IoT should go hand-in-hand with increased and optimized security because IoT leads to storage of sensitive data on networks.