The Chartered Institute of Loan and Risk Management of Nigeria has called for a greater integration of artificial intelligence in risk management strategies across various industries.
The institute emphasised that leveraging AI technologies could help mitigate potential risks, prevent project failures, and ultimately reduce financial losses caused by fraud.
The CILRM President, Nkechi Akubuiro, stated this at the just-concluded 14th Annual Risk Professionals International Conference in Abuja, themed: “Artificial Intelligence: An Essential Factor in Risk Management Practices”.
According to Akubuiro, artificial intelligence is transforming risk management practices.
The CILRM president explained that the future of risk management extended beyond mitigating threats to leveraging AI for opportunities.
She said, “Many of you are here because of artificial intelligence and I want to encourage you. AI is taking over many life endeavours. You know very soon that if you have no idea what it means to your profession, you are illiterate.
“If you don’t know how to apply it to your profession, you will become illiterate very soon. Technology is developing fast.
“Artificial intelligence is an essential factor in risk management practice. We must learn how to maximise and optimise risk management using AI. Why would you say AI is revolutionising risk management? Some parts of AI are trying to push away risk management. So you need it.
“AI is very useful in fraud detection. When you are in the bank, in the oil industry, or in whatever sector, AI is important for fraud detection. AI improves accuracy in everything you are doing and efficiency.”
The introduction of AI, according to the CILRM president, will allow professionals to identify, assess, and mitigate risks better, resulting in more accurate and data-driven decision-making.
In his keynote address, the Provost of the College of Postgraduate Studies, Veritas University, Linus Osuagwu, underscored the importance of AI in risk management.
He described it as a systemic process involving the identification, assessment, mitigation, monitoring and control of potential risks.
“AI encompasses a portfolio of technologies, including machine learning, natural language processing and predictive analytics.
“In risk management, AI facilitates the analysis of large datasets, identification of complex patterns, and generation of predictive insights that enhance organisations’ decision-making processes.
“Some of the applications of AI in risk management include credit risk assessment, fraud detection and prevention, marketing risk analysis, operational risk management, cyber security threat detection, supply chain risk management, and environmental risk assessment,” he expounded.
According to Osuagwu, the integration of AI into risk management provides benefits including enhanced accuracy, real monitoring, scalability, and cost efficiency.
However, he acknowledged that the adoption of AI also presented challenges, noting, “Some of these challenges include data quality and availability, model interpretation, regulatory compliance, ethical implications, integration with existing systems, dependence on technological infrastructure, cyber security risks, as well as costs and resource requirements.”
