A 2019 global risk study by the insurance company AON found that damage to reputation or brand was the 2nd leading concern of corporate executives, just behind fear of an economic recession.
Recent high-profile corporate crises might help explain the ranking:
- Marriott’s massive data breach, which was the second largest in cyber security history exposing 380 million records;
- Deutsch Bank’s $150 billion money laundering scandal, which led its share to a record low; and
- Tesla’s alleged factory sabotage by a trusted insider, with the news breaking after a leak of a company email from Elon Musk.
Only 47% of Business Leaders Prepared to Deal with a Corporate Crisis
Despite these examples, and the focus business leaders place on reputation management, only 47 percent said they were prepared to deal with a significant corporate crisis, according to the same AON report.
And that can be a significant pain point for those charged with protecting their brand and business value. The internet and social media play a central role in corporate scandals, either amplifying issues or giving rise to the crisis itself. AON finds that reputational costs are twice as costly for companies in the age of social media.
Reputational Events Twice as Costly Thanks to Social Media
The insurer Allianz, which produced a report similar to the AON study, noted: “Product recalls, cyber incidents and executive conduct have all tainted the reputations of organizations in recent years, affecting airlines, car manufacturers, banks and charities meaning protecting against loss of reputation or brand value takes on urgency in the social media age when crises spread rapidly.”
2,500,000,000,000,000,000 Bytes of Data
And therein lies the challenge.
- 2.5 quintillion bytes of data are added to the web daily (That’s 2,500,000,000,000,000,000 bytes of data, if you are counting zeroes).
- 4.75 billion pieces of content are shared on Facebook each day.
- 4.1 million videos are watched on YouTube every minute.
- 126 million are people active on Twitter.
- 3.6 million Google searches are conducted every minute.
With this magnitude of data, it’s difficult for a corporation to manage a crisis as it’s happening, let alone use the vast information available on the internet to predict a potential reputational issue before it occurs.
70% of Business Leaders Say AI is Most Useful Technology to Mitigate Risk
But, AI and machine learning – with the ability to analyze massive amounts of structured and unstructured data – can provide business leaders with the insights they need to understand risks facing their company, identify issues and prevent a damaging event.
That explains why 70 percent of respondents in the Allianz study noted that artificial intelligence (AI) would be the most useful and valuable technology to provide risk mitigation services that prevent damage before it occurs.
In fact, consulting firm Deloitte in a report outlining the role of AI in risk management, highlighted the value of the technology this way:
“The use of artificial intelligence to manage risk is particularly helpful when handling and evaluating unstructured data—the kind of information that doesn’t fit neatly into structured rows and columns. Cognitive technologies, such as natural language processing (NLP), use advanced algorithms to analyze text in order to derive insights and sentiment from unstructured data.”
AI Can Help Evolve from Early Warning to Early Learning Systems
Those sentiments were echoed by E&Y, in a brief designed to help corporate boards identify key issues related to implementing AI technologies:
“Machine learning plays an increasingly prominent role in enterprise risk management. AI can be used to create sophisticated tools to monitor and analyze behavior and activities in real time…. They can also evolve from early warning systems into early learning systems that prevent threats materializing for real.”
In fact, the McKinsey Global Institute estimates that AI’s predictive abilities could generate $250 billion in value, and that’s for the banking industry alone.
Lumina’s AI-driven Radiance is Purpose-built to Help Companies Predict and Manage Risk
Radiance’s Open Source Intelligence (OS-INT) is a deep-web listening tool that uses machine learning and artificial intelligence to assess and prioritize risk.
OS-INT includes more than 8,000 terms related to corporate risk. The platform conducts nearly 170,000 searches across all publicly-available data on the web, correlating names with these terms.
The results are prioritized, making it easy to further analyze the findings and determine potential risk A manual web search of this magnitude would take almost 1 year for one person to complete.
You can try Radiance for free today
Learn more about Radiance’s suite of technologies and the role they can play in mitigating corporate risk.