Fostering Trust and Governance: CFO's Path to Harnessing the Power of AI Responsibly and Ethically

Atif Zaim, Advisory Principal, Consulting Leader at KPMG US

Atif Zaim, Advisory Principal, Consulting Leader at KPMG US

Artificial intelligence (AI) is a disruptive force that is fundamentally changing business models across industries. The integration of AI throughout firms will improve productivity, scale how work gets done, and accelerate the value delivered to clients.

A recent KPMG survey found that consumers increasingly use generative AI (GenAI) in their personal and professional lives, and are optimistic about its potential positive impact on society. The survey found that consumers believe the benefits of the technology outweigh the risks but expect businesses to play a vital role in ensuring its responsible and ethical use. In fact, the survey found that 83 percent of consumers said that technology companies that develop GenAI technologies or use them in applications are responsible for ensuring that they are developed and used ethically. Trust is paramount in the use of AI, and companies must define “Trusted AI” as a strategic framework to design, build, deploy, and use AI systems in a safe, responsible, sustainable, ethical, and inclusive manner.

This is a valuable opportunity for businesses to take the lead in fostering trust by establishing governance frameworks, conducting regular assessments, and addressing concerns such as misinformation, scams, privacy, and cybersecurity. Trust in AI is a competitive advantage that drives innovation and value creation.

"One of the most common misconceptions about AI is that it will elicit a wave of layoffs across industries, including professional services. However, the opposite is likely to happen."

KPMG Trusted AI is the firm's strategic approach and framework for designing, building, deploying, and using AI solutions responsibly and ethically to accelerate value with confidence. The approach rests on 10 core pillars across the AI lifecycle, which are fairness, transparency, explainability, accountability, data integrity, reliability, security, safety, privacy, and sustainability.

These ethical pillars align closely to emerging requirements, but our Trusted AI approach is not limited to addressing regulatory compliance. It was purpose-built to accelerate the value of AI for clients and the firm while serving the public interest and honoring public trust.

We treat our firm as “client zero” and share the best practices we develop for our own implementation of AI with our clients.

GenAI has seen major advances in 2023, leading to discussions in most boardrooms about the opportunities and risks posed by the technology. The potential benefits of GenAI vary by industry, but the risks are significant, including inaccurate results, data privacy and cybersecurity risks, intellectual property risks, and compliance risks.

In 2024, oversight of GenAI will be a priority for most boards and may involve multiple committees. The audit committee may oversee compliance with laws and regulations, internal controls, and disclosure procedures related to GenAI. They may also have broader responsibilities overseeing the company's governance structure for the development and use of the technology, including decision-making, risk management, talent, and resources.

As a CFO, it is important to work with the management team to establish and uphold a governance structure and policies for the development and utilization of GenAI. This includes overseeing decision-making, risk management, compliance, talent and resources, and board and committee oversight.

Our recent survey of technology executives found that AI is seen as the most important technology for achieving short-term ambitions, with 52 percent of US businesses citing it as the most important technology.

Adopting an AI-focused mindset is the first step companies need to take to prepare for AI disruption. Understanding where major technology innovations, like AI, are going and learning how to systematically adopt them to transform their own businesses is crucial. Companies must create an enterprise data strategy and foundation to prepare data and set clear strategies around operationalizing AI. This will move the organization from experimentation to implementation.

Leveraging a partner ecosystem is also essential for successful AI adoption. The most successful organizations will harness innovation and collaborate with a variety of partners.

Assessing workforce skills, data assets, and overall readiness to pinpoint AI’s most promising applications is also crucial. Companies must prioritize adoption and enablement to ensure that their workforce is prepared for an AI-centric future. Upskilling the workforce for an AI-centric future is a significant challenge.

One of the most common misconceptions about AI is that it will elicit a wave of layoffs across industries, including professional services. However, the opposite is likely to happen. AI is a complement to the workforce of the future and, in the long run, it’s likely to be more of a job maker, eliciting new roles and new skills to meet market demand. With AI, knowledge workers can be faster and more comprehensive in their service offerings. Humans will need to know how to work with AI as a colleague.

AI is a disruptive force that will fundamentally change business models across industries. Trust and responsible use must be built into AI programs from the start to ensure that AI is used in a trusted, responsible, sustainable, ethical, and inclusive manner.