2023 Predictions Part One: The Year of Data, AI, Blockchain…or Everything?
Data has moved to center stage. Ongoing evolution in the way people work and communicate, increasing global regulatory enforcement across areas including data privacy requirements, antitrust compliance, and environmental, social and governance (ESG) disclosures, has underscored the importance of managing data origin, lineage, transparency, management, transmission and more. The need to derive insights from data to remain competitive has spurred an urgent focus on improving visibility and understanding of enterprise, employee and consumer information.
However, data is never an island. Alongside data’s growth in volume, variety, sensitivity and importance has been a parallel rise in the relevance, risk and complexity of artificial intelligence and other advanced technologies such as blockchain and digital assets. Today’s environment has become one in which it seems as though governance must be everything, everywhere, all at once.
Since most corporations don’t have an Evelyn Quan Wang to call upon, navigating the new world order can be overwhelming. To help level set, our team of Digital Insights & Risk Management experts have compiled a set of predictions for the issues they expect to surface as the most pressing in the coming year.
- “The effect of data on investigations is only one critical aspect in the risk landscape general counsel now face. Stepping back to a broader view, issues like operational risk, information governance, compliance and ESG come into the picture. Data is integral to each of these risk areas and as the data footprint continues to expand, digital risk is becoming the primary driver and concern in corporate risk. Thus, it must be addressed holistically, rather than through isolated initiatives.” – Al Park, Senior Managing Director
- “Two recent developments at the DOJ have signaled a continuation and intensification of the agency’s focus on the role of data, proactive compliance and analytics in the antitrust enforcement ecosystem. In the coming year, I expect we'll see the DOJ formalize ‘best practice’ when it comes to using data in compliance programs, thus moving from general guidance to specific expectations. Generally, the DOJ is likely to continue leaning on data more and more." – Andrea Levine, Managing Director
- “Privacy is now impacting regulatory compliance, litigation, reputation, governance practices, e-commerce and the way businesses engage with their customers via marketing and advertising. I believe there is an impending spike in privacy enforcement from Attorneys General in multiple states, who are focused on invisible data collection by the third-party advertising technology industry. There will also likely be a rise in class action litigation in the U.S. that alleges AdTech-based data collection is a breach of privacy rights. What this means is that organizations will need to strengthen their overall privacy controls and incorporate AdTech as part of their third-party risk management programs.” – Todd Ruback, Managing Director
- “Machine Learning will continue to be used for cases with more than 250,000 documents to review, but emerging data types will require more linear review due to their atypical format. This will force software developers to innovate to provide ways to either parse short form messages and journals into document formats, or find a way to analyze shorter form content. Imaging AI will begin to be used on matters involving large review of images, but there is bias within the imaging AI that will need to be accounted for when deploying the software. Failure to account for imaging bias could result in costly remediation efforts.” – Deedra Smith, Managing Director
- “The global economy has been contending with broken supply chains for a prolonged period. Ongoing difficulty in obtaining raw materials, manufacturing delays, labor challenges, geographic conflicts and economic pressures will collectively motivate organizations to carefully invest in technologies that will provide sustainable savings and transparency across the entire supply chain from inception of raw materials, through to consumer receipt. Therefore, implementation of blockchain solutions to transparently record and trace all aspects of goods, services and finances will take hold in material ways. In the year (and decade) ahead, the impacts of blockchain solutions are expected to fuel fundamental shifts in sourcing and fulfilling demand, for commodities, to electronics and everything in between.” –
Tom Barce, Managing Director
- “Many legal teams are either not aware of or deeply underprepared for the risks and opportunities in the blockchain and digital assets space. This past year has been eye-opening for many to see both the extreme volatility in this nascent industry, as well as the confidence many financial services institutions have in its long-term viability. As the crypto markets recover and advancements in Web3 and enterprise blockchain continue to gain momentum, we’ll see more blockchain use cases develop outside of finance and increased tokenization of assets. Crypto-native companies will also undergo increasing maturity around compliance and resilience.” – Jessica de Brignac, Managing Director
Organizations that can successfully approach Digital Insights & Risk Management challenges and opportunities with cohesive and holistic solutions will be well-positioned to remain resilient in an environment that will continue to expand in intensity and complexity.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.