Learn how to mitigate the risks of using AI in your business with our guide. Discover how to ensure compliance, protect your customers' data, and avoid bias. Contact LawyersInHouse.com to learn more.
Artificial intelligence (AI) has become increasingly popular among businesses of all sizes in recent years. However, with this technology comes risks and challenges that business owners must be aware of to ensure they are compliant with regulations and protect their customers’ data. In this blog post, we will discuss the risks your business may face when using AI and the steps you can take to ensure you are compliant.
Risk #1: Privacy and Security
According to the 2023 Forbes Advisory Survey, the primary use case of AI for businesses is customer service. While this can be very efficient, AI systems often require significant amounts of data to operate effectively.
This data may contain sensitive information such as personal details about customers. If this data is not properly secured, it may be vulnerable to potential breaches and hacks, which could result in exposure of customers’ personal information.
For example, in March 2023, OpenAI, the creators of the popular chatbot ChatGPT, experienced a data breach. In OpenAI’s statement about the incident, they stated that some users were able to view another active user’s first and last name, email address, payment address, last four digits of a credit card number (only), and credit card expiration date. The issue was quickly resolved with minimal damage, but it raises concerns, particularly for businesses that lack the resources to handle a similar situation quickly and easily.
SOLUTION: To mitigate this risk, your business should ensure that you collect only the necessary data for your AI systems and that this data is properly secured. This includes implementing strong data encryption practices, regularly testing their systems for vulnerabilities, and having a plan in place in case of a data breach. These steps will help your business protect your customers’ privacy and will build trust with your customers.
Risk #2: Bias and Discrimination
One of the biggest risks associated with AI is the potential for bias and discrimination. AI systems rely on data to learn and make decisions, and this data can often reflect existing biases in society. If not properly designed and monitored, AI systems can perpetuate and amplify these biases, leading to discrimination against certain groups of people.
For example, in a recent study, the University of California, Berkeley discovered that algorithmic bias in fintech tools resulted in Latino and African-American borrowers paying higher interest rates on their mortgages.
SOLUTION: Your business can take steps to mitigate the risk of biased AI systems by ensuring that they are designed to be fair and unbiased. This includes using diverse data sets and regularly testing the systems for bias. Additionally, your business should establish processes for human review and intervention in cases where the AI system makes a decision that could potentially harm an individual or group.
By implementing these steps, your business can maintain the trust of your audience and increase brand credibility.
Risk #3: Compliance with Regulations
Small businesses using AI need to ensure that they comply with regulations specific to their industry and the type of AI system they use. For instance, financial institutions using AI for credit scoring may need to comply with regulations related to fair lending and credit reporting.
SOLUTION: To ensure compliance, your business should work with legal and compliance experts who can help you understand your legal obligations and develop a compliance program that works for their business. This includes conducting regular audits of your AI systems and processes to ensure they are in compliance with regulations.
While AI can offer many benefits for all types of businesses, it is important that business owners are aware of the risks and challenges associated with this technology. At LawyersInHouse.com, our team of experts can help your business navigate the complex compliance landscape and ensure that your use of AI is both safe and compliant. Contact us today to schedule a consultation and learn how we can help you protect your customer data and build trust with your customers.