Whitepaper
Digital Trust

The Cost of AI Failure

An economic study into the potential financial risks if appropriate guardrails are not in place. Discover the AI governance opportunity.

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Research reveal the cost of AI failures and governance shifts

Make AI governance a strategic capability for your organization to reduce risk, innovate safely and build resilience. Key findings include:

AI failure could cost significant amounts: up to 3.6% of market revenue could be at risk each year.
75% of organizations have experienced an AI failure in the last year.
92% of organizations that encountered AI failure experienced more than one.
Only 47% have a process for managing AI incidents.
AI governance is growing but too slowly: 38% have an AI governance programme in place.
Failures aren't a barrier to innovation: 78% expect AI investment to increase.

Products & Services

Make AI governance your competitive advantage

Upskill your teams, manage risks, gain market access, comply with regulations, innovate safely - we're here to help achieve your AI governance goals.

Training

AI training and qualifications

Build practical skills to implement, manage and audit an AI management system, with flexible training and recognized qualifications.

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ISO/IEC 42001 AI management system

Build confidence in responsible AI with independent ISO/IEC 42001 certification, helping you manage risk and demonstrate accountability.

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Modular framework

AI Foundation Framework

Build trust in AI adoption with a flexible, modular framework to help you strengthen governance, manage risk and demonstrate accountability.

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AI Performance assessment

Independently verify your AI system's performance, bias and robustness claims to help demonstrate trust to clients.

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Assessment

AI performance for large language models

Understand how your adapted LLM performs with independent testing against measurable criteria for quality, safety and fitness for purpose.

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Assessment

EU AI Act Conformity Assessment

Meet EU AI Act requirements for high-risk biometric AI systems with accredited conformity assessment supporting CE certification and EU market access.

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FAQs

Understand more about AI failures and good governance

Understanding the cost of AI failures can help organizations assess risk, prioritize AI governance investments, and make informed decisions about AI adoption.

Many organizations invest in AI to improve efficiency. Globally 65% of leaders see this as the biggest investment driver. However, if AI fails to perform as intended this can result in financial loss, client impact, operational disruption, regulatory penalties, reputational damage and more.

By understanding the consequences and potential costs of AI failure, organizations will be well placed to decide where and how AI should be deployed. It enables leaders to prioritize AI investments aligned to business objectives and risk appetite to ensure AI delivers value.

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The AI confidence-action gap is the difference between how confident organizations are in their AI governance capabilities and the governance practices they have in place.

BSI's research with over 1,200 business leaders across nine markets and seven sectors found optimism in their organizations' ability to manage AI responsibly, but significantly fewer have the measures in place. For example, 68% say AI data and algorithms are transparent, yet only 39% understand what data is used to train or deploy AI systems.

Closing this gap is essential for reducing AI risk, improving trust, and creating sustainable business value.

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AI governance is more than a compliance or risk management activity. When approached strategically, it can help organizations adopt AI responsibly and achieve business objectives with confidence.

As AI becomes embedded across products, operations, and decision-making, treating it solely as a risk to manage you may limit the value it can deliver to your business. Viewed as a strategic capability, AI governance can align initiatives with your organization's strategy, culture, and risk appetite, helping AI investments deliver measurable business outcomes. Don’t just use AI governance to protect your organization, use it to build trust and unlock the full value of AI adoption.

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