Artificial Intelligence (AI) has permeated nearly every aspect of our lives. From personalized recommendations on streaming platforms to autonomous vehicles on our roads, it’s hard to find a sector untouched by AI. According to a report by McKinsey, over 50% of organizations have adopted AI in at least one business function, with widespread benefits such as increased efficiency, cost savings, and improved decision-making. But with great power comes great responsibility and in a world where AI is transforming industries, compliance has become the unsung hero of the digital age.
In this short article, we’ll dive into the importance of compliance in the AI era and why its being considered as the silent guardian ensuring that AI-powered innovations work for us, not against us.
- Ethical Considerations: AI systems can have significant ethical implications. They can reinforce biases, invade privacy, and make decisions that impact individuals and society at large. According to the consumer privacy survey of 2023, around 60% of organizations are concerned about the ethical use of artificial intelligence. Not too long ago, Amazon made headlines when it pulled the plug on its AI hiring tool, exposing its gender bias against female applicants. All of these reinforces the importance of ethical considerations in AI. Compliance frameworks help ensure that AI applications align with ethical principles and do not cause harm or discriminate against certain groups.
- Data Privacy and Security: AI systems often require access to large amounts of data, especially consumer sensitive data such as PII. The global volume of PII data is expected to reach 175 zettabytes by 2025. Gartner estimates that AI is responsible for about 40% of all new PII data created, which is a 100-fold increase from 2018. Compliance with data protection regulations, such as the GDPR (General Data Protection Regulation) in Europe or the CCPA (California Consumer Privacy Act) in the United States, is absolutely critical to protect individuals’ privacy and ensure the secure handling of their data. Non-compliance to GDPR has led to significant fines such as Google’s €50 million fine for lacking transparency and obtaining inadequate user consent.
- Transparency and Accountability: Compliance measures promote transparency in AI systems. They require organizations to disclose how AI decisions are made, which algorithms are used, and what data is utilized. This transparency is crucial for accountability and trust-building. So much so that a recent PwC survey found that 85% of consumers will not do business with companies they do not trust. And how can we forget the Facebook’s Cambridge Analytica scandal which only strengthened the need for transparency as users demanded to know how their data was used.
- Fairness and Bias Mitigation: AI systems can inadvertently perpetuate and amplify biases present in the data they are trained on. In fact ProPublica reported that an AI used in the U.S. justice system was twice as likely to falsely flag black defendants as future criminals compared to white defendants and X’s (formerly Twitter) image-cropping algorithm favored faces with lighter skin tones, revealing the need for fairness and bias mitigation. Compliance frameworks encourage organizations to implement fairness and bias mitigation strategies to ensure AI systems treat all individuals fairly, regardless of their demographic characteristics.
- Legal Liability: Compliance with existing and emerging AI regulations is essential to avoid legal consequences. Failing to comply with relevant laws and regulations can lead to fines, legal action, and reputational damage for organizations. The global average cost of a data breach in 2023 was 4.45 million, a 15% Y.O.Y. increase, according to IBM. Meta, T-mobile, X (formerly Twitter), Instagram are just some of the companies which were fined in 2022 owing to data breaches affecting their users and demonstrates the legal consequences of data breach.
As we navigate the exciting AI era, compliance isn’t just a checkbox on a list of to-dos; it’s a compass guiding us through the complex terrain of ethics, privacy, accountability, and trust. Embracing compliance ensures that AI serves humanity responsibly, ethically, and within the bounds of the law.
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