Article by Daniel Inadomi, Esq.
As organizations push to take advantage of AI tools to streamline operations, improve decision-making, and create competitive advantages, they are faced with questions about how to manage the legal, ethical, and regulatory risks that accompany the implementation of AI. Thus, the challenge facing many organizations today is how to responsibly incorporate AI into their work flows.
Compliance as a Catalyst for Innovation
While the common perception is that compliance slows progress, the reality is that an effective AI compliance framework can actually enable faster and safer innovation with AI. But a risk-based, phased deployment is key. Embedding compliance into the development process will enable companies to create a foundation for sustainable growth. Deploying AI and compliance in phases based on the organization’s risk profile and data security and privacy requirements will create a platform upon which the organization may continue to innovate with AI while minimizing exposure.
An integrated compliance process will also improve the quality of AI outputs. Organizations that encourage strong data management, retention, and privacy practices are not only more likely to meet regulatory expectations, but they will also benefit from having more accurate and reliable AI outcomes.
But because even sophisticated AI models can generate biased, misleading, or outright incorrect results, it would be prudent for organizations to check for inaccurate and biased outputs through human review processes where feasible. Regular testing and auditing frameworks will not only build trust with the AI outputs, but will also demonstrate due diligence in the event regulators or courts scrutinize the organization’s AI practices.
By way of example, the use of AI technologies that record, transcribe, and summarize meetings and communications comes with certain litigation and investigatory risks that must be managed. Best practices for mitigating these risks include integrating robust data minimization and retention requirements. Incorporating these safeguards early will help prevent the need for expensive subsequent corrective actions. Additionally, the organization can be more confident that its use of these AI technologies will not run afoul of the organization’s confidentiality and legal hold obligations.
It’s All About Balance
Balancing innovation and compliance in the era of AI is not about choosing one over the other—it is about integrating both seamlessly. A proactive compliance by design approach in which ethical and regulatory considerations are embedded into AI development from day one will enable an organization to be at the forefront of innovation while also managing their compliance obligations. But this requires a disciplined, enterprise-wide effort in which business leaders and compliance personnel work collaboratively to achieve their respective goals. Organizations that treat compliance as a strategic advantage rather than a roadblock will be best positioned to harness AI’s potential while maintaining the trust of regulators, customers, and the public.