The Role Of Artificial Intelligence In Enhancing Due Diligence And Risk Assessment In Cross-Border

The Role Of Artificial Intelligence In Enhancing Due Diligence And Risk Assessment In Cross-Border Mergers

Arjun Khanna, Amity Law School, Noida

ABSTRACT

In the pursuit of global expansion and market consolidation, businesses are increasingly using cross-border mergers as a strategic tool. Notwithstanding, it is imperative to acknowledge the intricacy and inherent hazards linked to said transactions, thereby requiring a comprehensive and thorough examination of due diligence and a meticulous evaluation of risks. In recent years, it has come to our attention that the utilisation of Artificial Intelligence (AI) has become increasingly prevalent as a formidable instrument in augmenting the process of due diligence and risk evaluation in the context of cross-border mergers. The present study delves into the examination of the role of artificial intelligence (AI) within this particular field and its prospective capacity to fundamentally transform the efficacy and proficiency of the due diligence procedure. The utilisation of AI technologies, such as machine learning algorithms, natural language processing, and data analytics, serves to automate and analyse extensive quantities of data. This, in turn, expedites the process of identifying and assessing risks. The aforementioned technologies serve to augment the process of risk identification and compliance assessment by effectively identifying potential compliance risks, evaluating regulatory obligations, monitoring shifts in legal frameworks, and mitigating legal and operational risks through the utilisation of artificial intelligence-driven analysis. Notwithstanding the advantages, it is imperative to acknowledge that the integration of artificial intelligence (AI) in the realms of due diligence and risk assessment gives rise to ethical considerations. In order to adequately address these concerns, it is imperative to prioritise the safeguarding of data privacy and security, as well as effectively mitigate any potential biases and limitations inherent in AI algorithms. Furthermore, it is crucial to strike a harmonious equilibrium between AI-driven analysis and the invaluable insights provided by human expertise. Through the use of artificial intelligence (AI) in the process of conducting due diligence and assessing risks, companies that are involved in cross-border mergers have the opportunity to acquire more profound insights, make well-informed decisions, and mitigate potential risks.