Aug 30, 2019
Risk & Compliance: rapid emergence and new challenges

If the general view is true: that in the Netherlands compliance is ‘still in its infancy’, then it’s a child that has had to grow up very quickly. Because in the boardroom of the early ’90s, anyone mentioning the term ‘compliance’ would have been met with blank stares. So, what’s changed? And how can organisations comply with stricter rules without sacrificing agility? Before we can answer those questions, we need to go back in time.

In the financial sector, self-regulation was the motto until well into the 1980s. The establishment of the Securities Traffic Supervision Foundation (STE), the predecessor of the Netherlands Authority for the Financial Markets (AFM), was the first attempt in the Netherlands to regulate securities trading by the government. In 1992, the STE’s powers were laid down in the Securities Trading Supervision Act which, for example, prohibited company managers from buying securities in companies in which they themselves are active.

Driven by the increased complexity and globalisation, the main focus of the financial sector shifted from self-regulation to government supervision. Due to new legislation, compliance within organisations became more important. Although a specific compliance role was not required by law, the first Dutch compliance officers at financial institutions appeared around this time. In 2001, the Association of Compliance Officers was founded.

Jul 31, 2019
Banishing bias in chatbots

Expectations for chatbots and virtual assistants powered by Machine Learning and Artificial Intelligence (AI) are extremely high. With investment in the industry already topping EUR 20 billion, analysts are labelling the technology the ‘next big thing’. However, 92% of C-suite executives are concerned about the potential negative impact of rogue data & analytics on reputation. Take back control by addressing key issues around governance and bias to protect your brands, trust and profit.   

As chatbots gain in importance in marketing, sales and customer service, your prospects and customers are more and more likely to come into contact with them. In some cases, their conversation with the bot will be the single point of contact with your organisation. Therefore, it is crucial that these bots reflect your values and knowledge base. 

The importance of understanding users’ intent

Put simply, chatbots are programmed to answer users’ questions in a conversational form. By recognising language use and sentence structure, bots can pick up on a specific tone or emotion and then reflect it in their answer to sound more human and relatable.

The challenge for bots is to understand a user’s intention, also known as ‘intent’. In order to do so, they need to comprehend the context of the user’s question. To identify intent and know how to respond, bots are programmed with algorithms based on so-called training data, which is made up of masses of information, parameters and answers.

AI is used to make the interaction more engaging, conversational and lively. It also enables bots to learn from conversations and improve their ability to offer appropriate responses and solutions. However, bots are only as good as the training data they are built on.

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How flawed data impacts chatbots

If the data is poorly sourced or biased, the results can be disastrous. Google’s facial recognition tool had trouble recognising non-Caucasians because photographs of faces it had been fed were mainly white. At another company, an HR bot was discovered to favour male job applicants. Why? Its training data included the company’s previous recruitment information and this had an anti-female bias.

Taking action against bias

Avoid disastrous scenarios like the ones above, by testing your bots for bias before deployment. Consider the following questions:

  • What are the knowledge base and values of your organisation? How will you make sure that your bot reflects them?
  • How does your bot perform if it interacts with someone (or another bot) whose values run counter to yours?
  • Is the bot’s initial set of questions and answers diverse enough in terms of culture, gender, ethnicity and socio-economic background?
  • How familiar are you with the training data you’re using and where it was sourced?
  • Does your bot have an avatar with a traditional gender, ethnic or racial identity? If so, does it reference any stereotypes?
  • How does your bot respond to gendered or sexist remarks? And to racial epithets or religious slurs? Are the responses appropriate to people in the targeted group?

Answering the above will help determine whether bias has been unintentionally encoded into your system so you can take retroactive measures. In fact, bias can creep in at any stage of the bot development process, including framing the problem the bot will address, and data collection and preparation. We will dive deeper into this topic in a future blog.

Governance: the bigger picture

Avoid bias in future by tackling issues around AI and data governance. If governance is causing you sleepless nights, you are not alone. As mentioned in the introduction, when Forrester surveyed C-level executives on our behalf, 92% said they were concerned about the threat posed by faulty data analytics on their reputation. And just 35% fully trusted their own organisation’s use of different analytics.

Staying in control of AI

In response to these concerns, KPMG developed the AI in Control framework. Using tested AI governance models, the framework addresses risks involved in AI, and helps organisations achieve greater confidence and transparency throughout the lifecycle of a bot. It includes recommendations and best practices for establishing effective AI governance, performing assessments, and integrating continuous monitoring. To give you a taster, here are three tips to improve AI governance in your organisation: 

  1. Develop AI design criteria and establish controls in an environment that fosters innovation and flexibility.
  2. Integrate a risk management framework to identify and prioritise business-critical algorithms and incorporate an agile risk mitigation strategy. Address cybersecurity, integrity, fairness and resilience.
  3. Design and implement end-to-end AI governance and operating models across the entire lifecycle: strategy, building, training, evaluating, deploying, operating and monitoring AI.

What you can do now

These tips are a start to establishing reliable AI governance and avoiding the dangers bias poses to your brands and bottom line. KPMG’s Digital Advisor platform is designed to manage the governance of multiple chatbots in your organisation. If you have any questions or would like to experience how the technology can work for your organisation, contact us now.

Pank Seelen is a member of the Strategy and Investment Team at KPMG’s Smart Tech Solutions.

Jul 29, 2019
KPMG Digital Advisor platform nominated for award

KPMG’s Smart Tech Solutions have been nominated for the 2019 Computable Awards. I am proud to announce that we are finalists in the SaaS supplier of the year category for our Digital Advisor platform.

Jun 18, 2019
Compliance in practice: “Believe my Excel sheet”

In many companies it’s standard practice: sending a flood of e-mails and Excels to the various business units for the periodic audit. Departments fill in the questionnaires, mail them back and the head office goes through them. But how does an organisation know if it is compliant today, when all the information is scattered and unclear?

Jun 18, 2019
Problems In Risk And Control Management

Risk and control management are areas that are always going to be of chief importance when it comes to business operations. One poor decision can have serious ramifications to a business’s health – many of which can be avoided by appraising the risk involved. However, part of the issue is that risk and control management has its flaws, just like anything else. Here are some of the main examples of where things can go wrong with what should be your prime line of defense.

Jun 13, 2019
From cars to real estate: the case for chatbots

Extensive market research confirms a sharp rise in the number of use cases for chat- & voicebots. According to Gartner, 68% of service leaders believe chatbots will become even more important within the next two years. So if you’re in the service industry, now is the time to decide how this technology could be integrated into your customer interactions. 

To better understand the value of chatbots to different sectors, check out my previous blog about promising use case domains. This follow-up is a deep dive into real-life examples of chatbots and conversational AI being applied in the real estate, HR, insurance and automotive sectors.

May 29, 2019
How poor Access Management in your information systems can lead to fraud

Information systems fraud is about as high a set of stakes as you can get. Millions of dollars can be lost over time, as some historical examples have shown us. Also, should you be found out of compliance with regulations, resulting legal action from clients and governing bodies can add fees and fines to the financial burden.

Because of this, it is important for all businesses to identify potential pain points for fraud. One of the more surprising areas of opportunity for this is poor access management. Here is how this can play out.

May 15, 2019
Why choose a chat- & voicebots platform over a chatbot solution

While most companies are still exploring various chatbot use cases, the technology is entering the next phase. Ready to launch or improve chatbots within your organization? This blog looks at fundamentals like market needs and tool selection. I’ll also explain why it’s so important to go for a platform rather than a simple chatbot solution.

May 15, 2019
Remote monitoring is problematic for multinationals

A multinational’s headquarters can be compared to a lighthouse. Thanks to its revolving beam of light, the lighthouse sees all the company’s branches, but the beam can’t shine in every direction at once. Which is a problem, especially for access management. How can you limit business risks if you lack the tools to constantly monitor thousands of roles and rights?

Apr 2, 2019
How to overcome the burdens of risk and compliance?

Ask yourself the following questions

  • Do you have a complete overview of your controls and do you know what your control objectives are?
  • Do you want to reduce the burden of your control activities?
  • Are you fully informed about which controls are executed by whom, in which timeframe, and where potential issues may arise?
  • Is risk & control management a structural part of all your organisation’s activities? And do you monitor your risks & controls consistently?
  • Are there processes in place that continuously monitor if the corporate policy is truly followed?
  • And are these processes evaluated regularly?

In other words, are you really in control?

Mar 18, 2019
How to control your ERP access configuration

ERP systems are complex IT solutions that support business processes within organisations. Such systems support a large spectrum of configurations and customisation. Within the range of configurations, ERP systems also allow for multiple security configurations which, if not addressed correctly, can cause various business disruptions as well as security leaks, eventually resulting in potential fraud, errors, lack of compliance with regulations and/or process inefficiency.

Mar 15, 2019
How to apply chat- & voicebots to your business

The global intelligent virtual assistant market is expected to reach USD 19.6 billion by 2025, at a CAGR of 35.4% between 2019 and 2022. As I mentioned in my previous blog, it’s not a matter of if, but when chat- & voicebots will transform your business. Given the pace of developments in Artificial Intelligence (AI), Natural Language Progressing (NLP) and Machine Learning (ML), it’s vital to jump on board this high speed train and start with the implementation of intelligent automation across your company.

Mar 12, 2019
The future of controls and identity management

Controls and identity/access management are two areas that are vital to anyone concerned with security at any business level. Gone are the days where complex passwords and two-step authentication were enough to keep data and assets safe.

Mar 4, 2019
KPMG and GRC SaaS solutions

Governance, risk, and compliance (GRC) has become a top executive priority, but many organizations are strug­gling to manage and control risk effectively today. The growing interest in GRC solutions stems mainly from outside forces. Several high-profile data breaches, as well as regulations such as the EU's General Data Protection Regulation (GDPR), have put pressure on businesses to increase their security measures not only for their own data but also for that of their customers.

Feb 25, 2019
Why KPMG is creating Software as a Service solutions

KPMG Advisory recently introduced various cloud services (Smart Tech Solutions, Sofy) onto the market which are based on the Software as a Service (SaaS) model. IT solutions developed and maintained by KPMG, in collaboration with alliance partners, are offered to clients as subscription-based cloud services. As a professional services firm, KPMG’s entry into the marketplace for off-the-shelf software products by delivering them in a SaaS model is a new concept for us. What’s the rationale behind the introduction of this new business model?

Feb 18, 2019
Actualities in the SaaS world

SaaS (Software as a Service) has rapidly evolved from a new additional concept for different businesses into the gold standard for technology. For example, statistics show that 73% of companies have indicated that nearly all of their apps will be running on SaaS by 2020. The main reason is that SaaS provides financial savings for many businesses, with small and large businesses benefitting the most.

Feb 7, 2019
The five most common chatbot use cases for business

A professional assistant that gives insight and answers your questions at any time -and always the right time- on sales figures, trends, analyses and/or information on competitor activities may seem too good (or too expensive) to be true. If this were actually reality, it would mean you have all the relevant information to hand at all times. It would put an end to endless searches in network files or SharePoint for the right data, which you have to transform into something meaningful before you can work on it. And if this assistant could also send messages for you, give updates to colleagues and manage your schedule, you'd be guaranteed to work more efficiently.

Dec 21, 2018
How chat- & voicebots are taking over the world and will change your business

The expectations chat- & voicebots in combination with Machine Learning (ML) and Artificial Intelligence (AI) are extremely high for the coming years. With investments in this industry already topping $24 billion, analysts, trend watchers and other experts are labelling these developments as the 'next best thing'. But what are they exactly? And how can they create value for your organisation? In this blog I explain the basics of chatbots and the different business applications you can use them for.