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7 Types of AI Risk and How to Mitigate their Impact

Identifying and managing AI risk is vital for all organisations. Some of the below mentioned risk area is a huge domain by itself — and requires extensive reading and hands-on experience to become familiar with the topic. I encourage you to check out the references below to get additional perspective on handling AI risk.
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Working on AI/ML initiatives is the dream of many individuals and companies. Stories of amazing AI initiatives are all over the web and those who claim ownership of these are sought after for speaking, offered handsome positions andcommand respect from their peers.

In reality, AI work is highly uncertain and there are many types of risks that are associated with AI/ML work.

“If you understand where risks may be lurking, ill-understood, or simply unidentified, you have a better chance of catching them before they catch up with you.” — McKinsey [1]


7 Dimensions of AI Risk 

  1. Strategy Risk
  2. Financial Risk
  3. Technical Risk
  4. People and Process Risk
  5. Trust and Explainability Risk
  6. Compliance and Regulatory Risk
  7. Ethical Risk

Notes:

[1] Confronting the risks of artificial intelligence, McKinsey. https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/confronting-the-risks-of-artificial-intelligence

[2] AI and risk management, Deloitte. https://www2.deloitte.com/global/en/pages/financial-services/articles/gx-ai-and-risk-management.html

[3] Ulrika Jagare. Data Science Strategy for Dummies, 2019.

[4] Derisking machine learning and artificial intelligence, McKinsey. https://www.mckinsey.com/business-functions/risk/our-insights/derisking-machine-learning-and-artificial-intelligence

[5] Understanding Model Risk Management for AI and Machine Learning, EY. https://www.ey.com/en_us/banking-capital-markets/understand-model-risk-management-for-ai-and-machine-learning


7 Types of AI Risk and How to Mitigate their Impact was originally published in Towards Data Science on Medium, where people are continuing the conversation by highlighting and responding to this story.

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