Knowledge

In recent years, the utilization of Artificial Intelligence (AI) technology has rapidly expanded across various industry sectors. From customer service to manufacturing process automation, AI has become a symbol of efficiency, speed, and data-driven intelligence. This is no less true within the realm of Governance, Risk, and Compliance (GRC)—an integrated approach that forms the foundation for organizations to achieve objectives ethically, legally, and with measurable risk. 

However, while AI offers tremendous potential in strengthening GRC systems, one fundamental principle must not be overlooked: AI is merely a tool. Governance, risk management, and compliance still require robust guidelines and human decision-making based on values and experience. 

What is GRC and Why is AI Necessary? 

GRC is an integrated framework that encompasses: 

• Governance: Directing and controlling an organization to align with its vision, mission, and core values. 

• Risk Management: Identifying, assessing, and responding to various types of risks that could hinder the achievement of organizational objectives. 

• Compliance: Ensuring that the organization adheres to laws, regulations, industry standards, and internal policies. 

As data volumes and regulatory complexities increase, traditional approaches to GRC—still reliant on spreadsheets, emails, and manual processes—are becoming increasingly inadequate. This is where AI plays a role: not to replace humans, but to complement and significantly enhance the effectiveness of GRC systems. 

Strategic Benefits of AI in GRC 

1. Automated Governance Insight 

   With Natural Language Processing (NLP) capabilities, AI can sift through thousands of policy documents and provide alignment recommendations against standards such as ISO 37000, OECD, and applicable national regulations, thereby enriching existing governance.

2. Real-Time Data-Driven Risk Management 

   AI can process and analyze transaction data, user behavior, and market trends to proactively identify potential risks. For example: 

   • Prediction of business process disruptions 
   • Identification of cyber security breaches 
   • Analysis of project risk probabilities 

   AI also enables automatic risk weighting, based on dynamic parameters such as incident count, escalation, and business impact. 

3. Automated Compliance Monitoring 

   Through the integration of AI and Robotic Process Automation (RPA), companies can: 

   • Automatically monitor activities that violate internal policies 
   • Ensure adherence to regulations such as the Personal Data Protection Law (UU PDP), ISO/IEC 27001, 27701, and GDPR 
   • Automate compliance reports and audit trails 

AI as a Tool, Not a Decision-Maker 

While AI can perform rapid and massive analysis, it lacks human moral values, ethics, or intuition. Therefore, organizations should not rely entirely on AI without a strong foundation for governance. 

Why Are Guidelines Still Needed? 

AI will only be as accurate and secure as the data and guidelines used to train it. Without structured and human-reviewed policies: 

• AI could detect false positives detrimental to users. 

• Systems could become biased due to inaccurate, non-neutral, or biased historical data. 

• The risk of privacy and ethical violations increases. 

Therefore, human-based GRC guidelines remain the primary reference for evaluating AI‘s output—from risk appetite policies, internal control frameworks, to organizational ethical standards. 

The Vital Role of GRC Consultants in the AI Era 

For AI to be optimally implemented in GRC, organizations need to engage GRC consultants who understand three crucial aspects: 

• Compliance with local and international regulations: For example, the Personal Data Protection Law (UU PDP), ISO 37301, or OJK regulations. 

• Value-based organizational governance: AI can provide data, but only humans can assess based on the organization’s culture, ethics, and strategic direction. 

• Structure and framework for AI implementation in GRC: Consultants play a role in developing effective and secure AI-based policies, oversight mechanisms, and audit models. 

Implementation Challenges and Mitigations 

GRC Transformation: Innovative, Adaptive, and Human-Centered 

Implementing AI-based GRC does not mean abandoning fundamental governance principles. Instead, AI strengthens GRC—if direction, oversight, and evaluation remain in human hands. 

AI allows for risk detection in seconds, but humans determine whether that risk warrants action. AI can detect violations, but only humans can assess the context and implications. 

Conclusion 

AI has opened a new chapter in Governance, Risk & Compliance. However, the success of its implementation heavily depends on one crucial factor: the existence of guidelines, policies, and humans who remain in control.

Therefore: 

• Organizations need to establish a robust GRC framework first, before integrating AI as a supportive tool. 

• Engage with GRC consultants to ensure AI policies and systems align with the organizational context and applicable regulations. 

• Maintain a balance between technological efficiency and humanistic governance values. 

AI is not a substitute for GRC, but an enabler towards a more effective, resilient, and sustainable GRC. 

If you are looking to establish and develop your organization’s GRC framework to meet the challenges of the digital era, we can assist you. Contact Robere & Associates (Indonesia) at 0811-9555-476 and build adaptive and sustainable governance.