How governance gaps are creating a shadow AI risk for finance leaders
The risk, if left unaddressed introduces a significant shadow AI risk with consequences that far outweigh productivity gains
Governance gaps in AI adoption are creating a "shadow AI" risk for finance leaders, according to research. While AI adoption is soaring in finance functions, governance lags behind, with nearly half of UK finance leaders admitting their organizations have gaps in AI governance strategy. This governance gap is concerning for two reasons: it is a compliance exercise and underpins how confidently businesses can adopt AI at scale.
Without clear guardrails, employees may start making their own decisions about AI tools, leading to the emergence of shadow AI. Shadow AI is essentially unchecked AI use, which can result in data leakage, compliance failures, poor record-keeping, and inconsistent decision-making. It exposes businesses to increased scrutiny and compliance risks.
Good governance, however, enables AI by making it easier for employees to use approved tools, setting clear policies for use, and ensuring productivity and innovation are supported rather than hindered.
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