Is Artificial Intelligence the future of Due Diligence?
Updated: Sep 29
Now more than ever, the methods and techniques in which Due diligence is conducted have continuously evolved. The advancement of the digital era has become an essential tool for an individual and or organisation to confirm the facts before entering a transaction with another party. The future of the practice will see many changes including Machine Learning, and Artificial Intelligence.
Machine Learning and Artificial Intelligence
Due to the increasing number of documents a business has, there is no substantial way of analysing every aspect efficiently. To tackle this problem, machine learning and artificial intelligence have been introduced to effectively analyse documents for due diligence auditors. For instance, artificial intelligence software such as Anti-money Laundering Systems has been implemented by many organisations to determine the legitimacy of financial records given. Machine Learning artificial intelligence use the information input to determine an assessment for the proposed transaction. Additional tools such as risk-management and virtual data room platforms allow artificial intelligence to make decisions based on data acquired, thus creating an efficient due diligent process.
The following are a few examples where machine learning and artificial intelligence can be used to maximise efficiency:
- Identifying a document with similarities to other topics
- Collating and processing all information without error
- Reduce risk and provide visibility into market trends
- Identify problems more quickly
- Holzinger, A., Kieseberg, P., Weippl, E., & Tjoa, A. M. (2018, August). Current advances, trends and challenges of machine learning and knowledge extraction: from machine learning to explainable AI. In International Cross-Domain Conference for Machine Learning and Knowledge Extraction (pp. 1-8). Springer, Cham.
- Woodbury, J. (2019). How Can Technology Transform Transactional Due Diligence?. Lawson Conner. https://www.lawsonconner.com/how-can-technology-transform-transactional-due-diligence/
- Fothergill, L. (2016, May 5). Rapid digital technology advancement is significantly impacting young people, socially and economically. Independent. https://www.independent.co.uk/student/istudents/rapid-digital-technology-advancement-significantly-impacting-young-people-socially-and-economically-a7014656.html