AI governance is a major concern for UK businesses. As more and more companies adopt AI technologies in their daily routines, issues revolving around privacy and security are becoming greater than ever before. The fundamental problem is that most companies are either not governing their AI systems at all or failing to do so correctly. Consequently, you see businesses running into the same issues time and time again.
Shadow AI & Employee Negligence
Shadow AI is a relatively new term that refers to the use of unsanctioned AI within a business by employees. The easiest way to think about it is an employee using their personal ChatGPT account to do business work. The employer hasn’t approved of this – and it is creating a severe problem for companies all over the country.
Proper AI governance for UK businesses will put a stop to this by ensuring that organisations keep better track of what AI is being used at work. It is sometimes as simple as creating legally binding documents that employees have to read through and sign, dictating that they won’t use unsanctioned AI for work and will only use the approved tools available.
But what is the main problem with shadow AI? Employees could be handing over sensitive information about a business to public AI systems. When someone writes a prompt in Claude or ChatGPT to get help with their work, the information is then stored in that AI, and the AI can use it however it wishes. It’s very easy to see how this can result in private information ending up as public knowledge – or in the wrong hands.
Data Processing & Retention
There will always be big debates and concerns surrounding AI and data usage, particularly in a business sense. The big question for you is this: how do the various AI systems process and retain your business’s data?
It is easier to understand this when building AI systems internally from the ground up. In these scenarios, the business can clearly learn or implement systems that define what data gets stored, how long it is stored for, etc. You have control over these things – but that’s not the case for third-party AI software.
And wouldn’t you know it, most businesses are dealing with the latter, as the AI software they use comes from external suppliers. It is up to the business to ask the supplier about data retention and processing so that you understand how your data is used and stored. Moreover, problems stem from updates made to existing third-party software, which can then change the rules surrounding data retention and processing.
A lot of businesses are unaware that things like this are happening, meaning their data is being stored or shared in ways that they don’t necessarily approve of. This all happens because there’s a lack of AI governance within organisations; proper governance allows you to identify issues such as these and create policies to ensure that the correct data protection routes are followed.
Privacy Disclosures
As well as issues surrounding business data, there are going to be similar concerns involving customer data. This is happening more and more often as companies might utilise AI tools that require customer data. There are several obvious examples of this:
- Using customer service software that looks at a customer’s data to provide personalised responses or support emails
- An AI-powered marketing program that pulls customer data to deliver marketing content that suits their preferences
- Analytics software that analyses customer data to help businesses improve
The bottom line is that this is a governance issue when businesses are not clear on AI usage. There must be clear privacy disclosures that are sent out to all customers – or made available when someone visits a website, much like cookie disclosures – that detail how AI is being used by the business and what information it can take from customers.
Having a clear AI Privacy Disclosure means you’re covering your tracks and there aren’t any grounds for legal complications if a customer discovers you’re using their data without their consent. If they have been sent the disclosure or it is clearly visible on your website, and they’ve not objected in any way beforehand, then they have no legal leg to stand on.
Accountability
Some say the biggest AI governance issue for UK businesses is the idea of accountability. Who is accountable in situations where AI systems go wrong? This is one of the more confusing aspects of artificial intelligence because the AI itself is not accountable – as it isn’t a real thing.
Instead, the responsibility falls on either:
- Your business
- The company that developed the AI
But there are many instances when it isn’t easy to figure out who should be accountable. Is your business accountable if an AI system makes an error, even if the error stemmed from a fault with the system itself? Depending on things like GDPR and other regulatory frameworks, arguments can be made against either party.
Bringing it back to the idea of AI governance, the “issue” companies run into is that there aren’t any clear rules regarding accountability. Proper governance looks like this: your company creates a contract with any external AI providers that clearly outlines responsibility and accountability. It details what the provider will be responsible for and what your business is responsible for. This clears up any potential arguments and means that someone is accountable if a problem ever crops up. For businesses, it is normally advised that the software provider is held responsible for any errors relating to the software itself.
It’s clear that UK businesses have an AI governance problem, and many keep running into the same barriers over and over. Proper strategies must be in place to govern the use of AI and establish things like privacy frameworks, accountability, shadow AI usage, and more. In a world that looks set to use more and more artificial intelligence, it’s now more important than ever to have the right governance in place to avoid any damaging complications when things go wrong.
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