Legal guidance for businesses adopting AI: What you need to know before deployment – London Business News | Londonlovesbusiness.com

Artificial intelligence has moved from a sci-fi fantasy to a powerful game-changer that’s transforming entire industries. Scratch the surface and the potential is clear: automating tasks, improving the customer experience, making data-driven decisions – the list goes on. However, with great power comes great responsibility and in this case, great liability too.

The role of AI in business

Behind every AI innovation, there are tough legal questions. Unfortunately, many businesses are so laser-focused on building AI that they’re failing to ask those questions. Truly, AI innovation is outpacing AI regulation, from AI-powered chatbots that help customers in real time to the supply chain efficiencies in countless global businesses.

Here’s the hitch, though: implement AI without considering its legal consequences and you’re sure to run into serious hurdles. Lawmakers around the world are especially concerned about how businesses use it to infringe on data privacy and mislead consumers or worse.

Regulatory frameworks

The legal implications of AI are becoming increasingly sophisticated and nuanced. Depending on the sector and country, you could be dealing with multiple AI legal frameworks. Banks, for example, are already using AI tools to sift through an ocean of data and provide customers with more personalised financial products.

Healthcare providers are leveraging AI to help diagnose ailments and recommend treatment. Regardless of your business or location, your AI system, data practices, commercial agreements and more will likely be subject to new regulations.

Mitigating legal risks

In the US, the FTC has released a new set of guidelines for using automation, data security and the like. Now, it’s up to courts and Congress to decide how to enforce those rules. In a government-led approach to oversight, the law around defrauding consumers is more likely to be rigid. Across the pond, the EU AI regulation proposal will lump different AI systems in a four-tier risk category and add a host of legal requirements.

How AI shapes up in the legal sector and beyond will be a function of answers to some very basic questions. For example, the FTC guidelines don’t create any new legal requirements or obligations for businesses. At the same time, that could change with one simple decision by Congress.

Ethical AI and risk assessments

The ethical dimension matters as much as the legal one. Your company’s AI-generated decisions may lead to bias, privacy loss or hurt stakeholders. Include risk evaluation in the deployment plan. Being prepared for possible risks will help your company mitigate them before they materialise.

What legal experts can do

Dealing with all the rules and hazards related to implementation may sound like a big challenge. However, working with lawyers who deal with the implementation of AI can help your company enter the space in a safe, compliant way. They ensure companies can extract the most value out of the data resources they have, advising on how to draft contracts, what to pay attention to in terms of regulatory requirements and ethical questions relevant to that industry. Companies that use legal guidance for AI have more confidence in their journeys.