AI is already here with its risks and rewards
Rise of AI and its risks
Artificial intelligence (AI) is no longer a futuristic concept that businesses can afford to ignore. It’s here, and it’s poised to revolutionize every industry. With the arrival of generative AI like ChatGPT, we have witnessed AI at a visceral level, and we have seen the potential for AI to change the world. However, with that potential comes risk, and many corporate boards and management teams have yet to develop an AI risk management plan. In this article, we will define the risks that come with widespread implementation of AI.
Risk of disruption
Artificial intelligence will disrupt existing business models and markets like no technology before it. Creative industries like media and advertising are at risk, as are personalized service professions such as teaching and financial advisory, and even elite skill segments like pharmaceutical R&D and computer science. According to a March 2023 report, as many as 300 million jobs may be eliminated worldwide by generative AI like ChatGPT. Whatever business or profession you are in, it is almost certain that your company will face massive change within the next few years.
Cybersecurity risk
Keeping organization data, systems, and personnel safe from hackers and other saboteurs was already a growing problem for business leaders. Artificial Intelligence will exacerbate this challenge exponentially. The use of Deepfake technology like voice clones in cyber swindles have been reported since at least 2019. With AI improving and diversifying every day, the problem of cyber risk management will only get worse from here.
Reputational risk
When your AI behaves in a way that is not in accordance with your values, it can result in a PR disaster. Nascent forms of AI have already acted like a racist, misogynist creep, led to wrongful arrests, and amplified bias in staff recruiting. Sometimes, AI can ruin your relationships with customers. According to a report, 75 percent of consumers are disappointed by customer service chatbots, and 30 percent take their business elsewhere after a poor AI-driven customer service interaction.
Legal risk
New regulations might be coming soon and the risk to your company goes beyond compliance. If something goes wrong with a product or service that uses AI, who will be held accountable: the product manufacturer, the software developer, or the company that implemented the AI? There need to be legislation to govern AI, targeting facial recognition, hiring bias, addictive algorithms, and other AI use cases.
AI risk management
The risks of AI are significant, but they can be managed. Here are some strategies for AI risk management:
Risk assessment: Begin by assessing the risks specific to your company and industry. Consider the impact of AI on your existing business model, the potential for cyber-attacks, and the reputational risk associated with AI.
Compliance: Stay informed about relevant laws and regulations, and ensure your company is in compliance. Develop an ethical framework for your AI use, and ensure that your AI aligns with your company’s values.
Cybersecurity: As AI increases the risk of cyber-attacks, companies need to be proactive in securing their systems. Ensure that your AI systems are secure, and train employees on how to recognize and respond to cyber threats.
Transparency: Be transparent about how AI is being used in your organization. Ensure that employees and customers understand the role of AI in your business, and how it is impacting their interactions with your company.
Education: Provide education and training for your employees on AI and its potential risks. Help your employees understand the implications of AI for your business and the broader industry, as well as how to recognize and respond to potential risks.
Continuous monitoring: Regularly monitor and review the performance of your AI systems to identify any potential risks or issues. This will help you to quickly identify and address any problems before they become more serious.
AI has the potential to revolutionize the way we do business, but it also comes with significant risks. To ensure that your business is able to take full advantage of the benefits of AI while minimizing the risks, it is important to develop an AI risk management plan. This plan should include strategies for risk assessment, compliance, cybersecurity, transparency, education, and continuous monitoring. By proactively managing the risks of AI, your business can stay ahead of the curve and successfully navigate the rapidly evolving landscape of AI.