The Role of AI in Risk Management: Benefits, Challenges, and Adoption Strategies

Abstract

This study explores the role of artificial intelligence (AI) in risk management, focusing on its integration within business operations. The primary objective of this research is to examine both the potential benefits and associated risks of adopting AI technologies, with a specific emphasis on data security, ethical concerns, and governance. A mixed methodology was employed, combining a comprehensive literature review on AI\u27s applications and limitations with qualitative interviews conducted with professionals from various industries, including risk management, higher education, and IT development. The findings highlight key challenges in AI adoption, such as data privacy issues, bias in AI algorithms, and the lack of ethical reasoning in decision-making processes. Based on these insights, the study recommends practical strategies for businesses to mitigate risks, including implementing effective governance frameworks, developing AI literacy through employee training, and deploying safeguards such as guardrails, audits, and human oversight. The findings emphasize the importance of balancing AI\u27s potential benefits with responsible integration to foster trust and ensure ethical AI practices in business operations