new report predicts that compliance and assurance functions could double the amount they spend on new technology by 2027. According to the research, issued by Gartner Inc., generative AI, machine learning, and large language models will fuel a surge in spending by compliance, risk management, and assurance functions.
The news isn’t all good. The report also predicts a wave of disillusionment with advanced technologies as expectations are exceeding capabilities in many cases. Accordingly, Gartner experts have placed AI at the “peak of inflated expectations” in the 2024 “Hype Cycle” for legal, risk, compliance and audit technologies.
“Some assurance leaders are prematurely expecting AI technology to greatly enhance productivity,” said Weston Wicks, senior director analyst in the Gartner Legal & Compliance Practice. “While these technologies show promise, in the near-term Gartner recommends assurance leaders identify where they can pilot and experiment with them while maintaining healthy skepticism as they are implemented.”
Gartner experts believe that GenAI will have a foreseeable impact on adjacent innovations in the analytics space, and therefore certain innovations, such as data and analytics governance, audit analytics, legal analytics, and advanced contract analytics, have moved further toward the trough as the te to plateau for these innovations becomes nearer-term — two-to-five years.
“Certain notable movements on the 2024 Hype Cycle are driven by assurance leaders convinced that incorporating new technology and generative AI (GenAI) tools is necessary to manage the growing burden of new rules and regulations imposed on executives and enterprises globally,” said Wicks. “Select emerging innovations, such as compliance monitoring solutions, have been directly impacted by GenAI and have seen substantial movement along the Hype Cycle as a result.”
Proceed with Caution
While there are some expectations that the advancements in GenAI will be transformative in assurance, Gartner experts caution that early adopters must acknowledge the risks of these new advancements and their impact on teams’ ability to manage them.
“Early lessons learned by assurance leaders include understanding the importance of information management and data governance, and the importance of intentionally including humans in the loop to mitigate bias and other risks,” said Wicks. “For these reasons, Gartner estimates the innovations will achieve high benefit ratings across the next five years.” 