Learning & Development

The Dangers of AI in the Workplace: Why Pro-Active Compliance Efforts Must be the Norm for Safe and Ethical Use of AI

Businesses have used AI in some form or another since its conception years ago. However, deploying AI in business today is not as “uncomplicated” as it was a few years ago.

Aside from the many benefits it brings, AI is equally capable of causing long-term catastrophes when businesses fail to use it ethically and responsibly. AI is all set to see an annual growth rate of 37.3% by 2030. With an increase in AI activity, new businesses will also have to brace for newer and more complex regulations.

With newer vulnerabilities, compliance risks, and other legal and ethical concerns AI comes with, how can businesses work toward regulating their processes while staying fully compliant? The answer lies in understanding and managing AI-related risks and deploying systems for the safe use of this technology.

What Dangers Does AI Unveil in the Workplace?

AI is evolving faster than we can blink our eyes. This evolution also announces the arrival of many newer and more comprehensive regulatory requirements over the next couple of years. Staying compliant in the wake of these changes will require businesses to understand and prepare for any AI-related dangers before applying the technology across their operations. Here, we understand the challenges that AI brings to the workplace and how businesses can prepare to tackle them.

Data Privacy

Data is the treadmill all AI-related business processes run on. With oceans of data fueling these processes, collecting and using this data can come with several data privacy and security risks. While chatbots, video interviewing software, online surveys, resume scanners, compliance training software and more can make your job easier, they come with a massive responsibility to keep consumer and employee data secure. Aside from safeguarding this data, businesses must also offer training programs to ensure no sensitive company, customer, or employee information is at risk.

Potential for Bias

Who designs AI algorithms? Humans. What does that mean? These algorithms are just as prone to biases as humans are. So, if someone unaware of their unconscious biases feeds AI, the results would naturally be biased.

For instance, Amazon halted the use of its hiring algorithm after discovering it favored male resumes and Google’s online advertising systems favored men for high-paying positions more than women. Aside from keeping a business from tapping into valuable talent, biased technology often leads to reputational losses that end up damaging a company’s bottom line. This is why businesses need to diagnose their systems to detect and erase biases before implementation.

Legal vs Ethical

The age of AI also puts many ethical dilemmas on the table. Some AI applications may not be illegal but might be unethical. When faced with these situations, should businesses prioritize profits over values?

When ethical dilemmas are ignored in the long run, the company’s compliance culture begins to suffer. Employees refuse to work in a toxic culture and customers turn down businesses known for unethical practices. Unfortunately, understanding what’s legal and what’s ethical goes beyond the capacity of a machine which is why it is incredibly important to test every AI system multiple times before its full-blown implementation.

Third-Party Vendors

When it comes to deploying new AI technologies in the workplace, businesses cannot rely on a vendor’s assurance that their service complies with all necessary regulations.

If a tool fails to comply with a law, it is often the business that is held liable. For instance, if a third-party service fails to comply with Title VII of the Civil Rights Act of 1964, for example, EEOC’s (Equal Employment Opportunity Commission’s) guidelines hold the employer accountable.

Those sourcing and procuring AI hiring tools must be trained to analyze the risks associated with third-party vendors. To ensure your business only works with trusted vendors, it’s critical to leave no stone unturned in running comprehensive vendor background checks.

Newer Vulnerabilities

The age of AI also introduces never-before-explored security vulnerabilities that can easily go undetected but ultimately wreak havoc on the entire organization. A Stanford study, for example, found that “software engineers who use code-generated AI systems are more likely to cause security vulnerabilities in the apps they develop.”

Aside from unlocking unique security issues, AI can also put a business’s intellectual property and other sensitive information at risk. Any customer data fed into a tool that hasn’t been thoroughly tested can be stored and accessed by other service providers. Moreover, many AI models can be easily tricked to bypass complex security controls for malware execution.

AI and Reputational Risks

AI has been teaming up with businesses for a long, long time. Today, however, AI use for customer-facing purposes has been a common trend and demands special attention. Previously, AI was mainly deployed for predicting customer behavior and data analytics purposes. Now, AI is used to directly interact with consumers. While this makes a business more efficient, it also leaves room for many reputational risks. A single misstep is often enough to cause long-term reputational damages.

What Businesses Can Do to Manage AI-Infused Risks 200

Managing risks associated with AI demands a proactive approach. Here are a few steps to ensure safe and responsible use of AI:

  • Get your stakeholders from HR, IT, and compliance to analyze all risks associated with your AI tools. Focus on areas such as privacy, security, transparency, fairness, and third-party associations.
  • Run comprehensive evaluations on all third-party AI vendors and tools.
  • Craft a formal AI policy to ensure your business’s use of AI aligns with its goals, values, and ethical standards.
  • Start preparing for future AI regulations.

Over to You! 100

AI is an absolute gift for businesses that know how to use it ethically. The inability to understand and manage AI risks can spiral businesses into long-term compliance troubles, financial and reputational damages, and legal repercussions.

Assessing every AI tool for risks, thoroughly evaluating all third-party tools, outlining all policies related to AI use, bracing for future regulations, training your team to manage AI-related risks, and working with a trusted compliance partner can help your business glean the many benefits of this tool while avoiding compliance pitfalls.

Giovanni Gallo is the Co-CEO of Ethico, where his team strives to make the world a better workplace with compliance hotline services, sanction screening and license monitoring, and workforce eLearning software and services. Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so Ethico’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community. When he’s not working, Gio’s wrangling his two young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.

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