AI Integration in Compliance Processes Slight Among Firms, Indicates International Compliance Association Study
In a recent report published by the International Compliance Association, insights from 383 compliance professionals across 87 countries reveal the current state of AI integration in governance, risk, and compliance (GRC) processes. The report, titled "Navigating the future: The role of governance, risk, and compliance in modern business," highlights both the potential benefits and the substantial obstacles that are hindering the widespread adoption of AI in GRC.
One of the key findings is that only 1.6% of firms have fully integrated AI into their GRC processes, while 32% are in the early stages of incorporating AI. This slow adoption can be attributed to several intertwined challenges:
- Data Quality and Accessibility Issues: Poor data quality, including unclean, disorganized, and inaccessible data, significantly hamper AI implementation efforts in GRC.
- Complex and Evolving Regulatory Environment: AI deployment must comply with complex data protection and privacy laws like GDPR and CCPA, which create high hurdles for responsible AI governance and continuous monitoring.
- Governance Gaps: While many organizations use AI, only a small percentage have a fully embedded, formal AI governance framework that integrates cross-functional accountability (legal, ethics, HR, etc.).
- Ethical and Bias Concerns: Opaque AI models can produce biased or unfair outcomes, raising ethical issues especially in regulated sectors.
- Cultural Resistance and Lack of Trust: Employees and leadership frequently resist AI adoption due to fears about job security, skepticism around AI accuracy, and lack of understanding about AI's role.
- Leadership and Strategy Deficiencies: Absence of clear, enterprise-wide AI strategies with strong executive sponsorship undermines the ability to scale AI initiatives successfully.
- Need for Skilled Resources and Collaboration: There is insufficient cross-functional collaboration and a need for investments in AI skills and infrastructure to enable integrated AI governance and compliant deployment.
Despite these challenges, more than half (51%) of compliance professionals view advancements in AI and technology as the biggest driver for change in GRC over the next five years. This indicates a growing recognition of the transformational potential of AI in GRC, even as firms navigate the technical, regulatory, cultural, and strategic obstacles that slow adoption.
The report also sheds light on the priorities of compliance professionals. 17.2% prioritize 'educating the business' as the single most important compliance activity, while 15.6% consider 'interpreting and applying regulatory requirements' as the top priority. Interestingly, only 11.3% are very concerned about GRC jobs being displaced by AI, and 41.3% are not concerned at all.
In a deregulated climate, 28% of respondents rank 'understanding the business' as the single most important compliance activity. This underscores the importance of aligning GRC strategies with business objectives, even as regulations evolve.
In conclusion, while the adoption of AI in GRC is slow, firms recognise its potential benefits and are taking steps to overcome the challenges. Success requires addressing data issues, establishing strong governance frameworks, managing ethical risks, fostering organisational trust, and securing committed leadership, along with cross-functional collaboration.
- The slow adoption of AI in governance, risk, and compliance (GRC) processes can be attributed to challenges such as data quality and accessibility issues, complex regulatory environments, and cultural resistance due to concerns about job security and AI accuracy.
- Despite these obstacles, advancements in AI and technology are viewed as the biggest driver for change in GRC over the next five years, indicating a growing recognition of the transformational potential of AI in GRC.
- In a deregulated climate, understanding the business is prioritized as the single most important compliance activity, highlighting the importance of aligning GRC strategies with business objectives.
