Deloitte Report : AI Governance Improvement Opportunities in the APAC Region

The Asia Pacific (APAC) region is at a pivotal moment in the rapid adoption of artificial intelligence (AI). Generative AI, powered by sophisticated tools, is now a primary driver of technological transformation across industries. 

However, the expansion of AI technologies has outpaced the establishment of robust AI governance frameworks, leaving organisations in the APAC Region vulnerable to a range of risks. Deloitte's latest report underscores the significant opportunity for improvement in AI governance practices across Asia Pacific Countries.

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AI Governance in APAC: The Need for Improvement

A detailed survey of nearly 900 senior leaders across 13 countries in APAC reveals that while organisations are increasingly adopting AI, there is a glaring gap in governance structures. Deloitte’s AI Governance Maturity Index classifies 91% of organisations in APAC as having “Basic” or “In Progress” AI governance structures. 

This signals a substantial need for improvement in managing the complexities of Generative AI and its associated risks. Among the key findings:

• 86% of organisations face security vulnerabilities when deploying AI technologies, while 83% are concerned about privacy and surveillance issues.
  
  
• Over a quarter of organisations report a rise in data breaches or other AI-related incidents over the past year.
  
  
• A significant portion of APAC organisations—two in five—lack a reporting mechanism for AI-related incidents or queries, potentially blind to emerging risks.

Despite these challenges, Deloitte’s study highlights the APAC Region as having the greatest opportunity to enhance AI governance, with the potential to establish industry-leading frameworks that can ensure trustworthy AI deployment at scale.

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Governance Gaps Across Key Pillars

Deloitte identifies several key pillars of AI governance, and its findings suggest that APAC organisations need substantial improvements in these areas:

• Policies and Principles: Nearly 31% of organisations in APAC are still at the "Basic" stage in developing AI governance policies. Many organisations lack clear ethical guidelines and timelines for governance implementation. In contrast, 76% of organisations have a strategy for AI but have not fully implemented key governance elements like AI risk management procedures.
  
  
• Procedures and Controls: 23% of organisations lack a comprehensive risk procedure or AI control framework to mitigate potential AI-related risks, pointing to a critical gap in the operational management of AI systems.
  
  
• People and Skills: While 58% of employees have the skills and capabilities to use AI responsibly, a significant number of organisations still face challenges in ensuring that their workforce is adequately trained. 56% of organisations are actively upskilling their staff to address this gap, but this process needs to accelerate to match the fast-paced advancements in AI technology.

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The Benefits of Strong AI Governance

Organisations that are successful in strengthening their AI governance frameworks report a number of positive outcomes, which include:

• A 28% increase in staff using AI solutions.
• Nearly 5% higher revenue growth, attributed to enhanced AI governance.
• 45% of organisations report an improvement in their reputation among customers due to their commitment to ethical AI practices.

These benefits are particularly evident in sectors where AI is being deployed in customer-facing or critical operational areas, including customer service, marketing and sales, research and development, and operations.

AI Governance as a Strategic Enabler

A robust AI governance framework is not just about risk management—it is a key enabler for unlocking the full potential of AI technologies. The survey revealed that organisations with a more mature approach to AI governance are more likely to:

• Deploy AI solutions in three additional areas compared to those with less mature governance frameworks, which results in broader AI adoption across the organisation.
  
  
• Achieve higher levels of productivity, with a 16 percentage point difference in AI adoption between ‘Ready’ organisations and ‘Basic’ organisations.

This proves that proper governance is not only crucial for mitigating risks but also for reaping the long-term benefits of AI scalability, including higher adoption rates, increased staff engagement with AI tools, and faster deployment of AI solutions across the business.

Addressing AI Risks: Deloitte's Key Recommendations

To tackle the governance gap, Deloitte outlines several high-impact actions organisations should take to build more trustworthy AI systems:

1. Prioritise AI Governance to Realise Returns: Organisations must engage in continuous evaluation of their AI governance frameworks, ensuring they keep pace with evolving regulations and best practices in AI.
   
   
2. Leverage the Broader AI Supply Chain: By interacting with developers, regulators, and customers, organisations can build a holistic understanding of AI’s risks and benefits, which can inform their governance strategies.
   
   
3. Develop Risk Managers, Not Risk Avoiders: Organisations must equip employees with the skills to manage AI risks proactively. This can be done through upskilling initiatives and the development of clear risk management procedures.
   
   
4. Ensure AI Readiness Across the Organisation: Clear communication of the AI strategy, coupled with transparency about AI’s risks and benefits, will empower employees to use AI responsibly and confidently.
   
   

The Urgency of AI Governance in the APAC Region

With AI adoption continuing to accelerate, APAC organisations must move quickly to establish robust governance frameworks. Deloitte’s findings underscore that AI adoption is outpacing the development of governance structures, leaving many organisations exposed to significant risks. These risks include data breaches, regulatory fines, and loss of customer trust.

However, organisations that take action now to improve their AI governance frameworks will not only be better equipped to manage these risks but will also position themselves for significant competitive advantage in the APAC Region. By addressing AI governance holistically, organisations will unlock AI's full potential, leading to greater innovation, efficiency, and revenue growth.

Thus, Trustworthy AI as the Path to Future Success

In conclusion, the APAC Region presents a remarkable opportunity for businesses to lead in the responsible deployment of Generative AI and other AI Tools. By focusing on enhancing AI governance practices, organisations can mitigate risks, foster greater trust with customers, and unlock the immense value AI offers. Trustworthy AI is no longer a luxury—it is a critical enabler for future business success across the region.

The time to act is now.

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