As artificial intelligence (AI) adoption becomes increasingly pervasive in business operations, addressing AI regulations and managing AI risk has become critical to deploy AI with trust and confidence.
However, navigating the complex landscape of regulations and compliance requirements can be daunting. Governments and regulatory bodies in many regions and jurisdictions are increasingly scrutinizing AI deployments, and noncompliance can result in significant reputational and financial risks.
The need for a streamlined approach to AI governance and compliance is becoming more apparent, as organizations struggle to keep pace with the complexity and volume of regulations and industry standards.
Let’s delve into the changing AI landscape, adding to the need for AI governance and global regulatory compliance. We’ll also cover the state of complexity of growing AI regulations; along with IBM’s take on how to best tackle these problems with a streamlined approach to regulatory compliance.
As businesses increasingly rely on AI to improve productivity, they can face instances where the technology behaves unexpectedly or makes mistakes. For example, an organization’s AI recruiting tool can drift if the training data is biased or incomplete.
In industries such as banking, housing and healthcare, AI is used for tasks such as loan and mortgage applications, and treatment recommendations, each case bringing its own set of challenges and considerations.
In response to these concerns, there is a growing movement to standardize AI development and usage in the business world. The movement aims to establish standardized practices for AI development and deployment in business settings.
The EU’s General Data Protection Regulation (GDPR) was a first step providing guidance on how organizations should approach data privacy and governance, as well as the consequences of noncompliance.
Building on this momentum, the EU AI Act provides specific requirements for the development and use of AI in the European Union. Yet, this regulation is just one from a series of continually evolving regulations across the world.
Proactively managing AI compliance can help businesses avoid the financial, legal and reputational risks associated with the use of AI. Noncompliance can lead to serious fines. Under the EU AI Act, companies can face fines up to EUR 35 million or 7% of their annual turnover in certain cases.
Compliance also aids in protecting brand reputational risks, building trust in consumers on the usage of their data.
A 2024 survey by KPMG found that AI regulation might lead to more stringent data privacy and security measures and increased costs. This survey highlights the importance of developing a more efficient compliance strategy to facilitate cost-efficient AI growth and scaling.
As AI technology advances at an incredible pace, from predictive machine learning models to complex intelligent agents, regulatory compliance requirements and industry standards are also rapidly evolving. These changes demand that companies be agile, responsive and proactive in adapting to new developments.
To add to the complexity, the nature of generative AI complicates compliance activities. Understanding and interpreting AI models and algorithms can be technically challenging, especially because many AI systems operate in real time. Keeping pace with evolving regulations at this speed can be difficult and requires businesses to constantly adapt their compliance programs.
Compliance owners and officers must assess each AI business case against regulatory rules and compliance policies. Adding to the complexity, large enterprises must comply with a diverse range of geographical regulatory requirements in each area they operate. Trying to keep up with all of them across all locations and use cases is extremely time consuming.
To further complicate the landscape, these regulatory requirements can extend beyond local entities, applying to any business that operates or transacts within the region, regardless of their headquarters or location.
Overseeing an organization’s compliance posture can be a challenging task due to the dynamic rate at which the regulatory landscape is evolving. If companies invest in multiple siloed tools for each use case and region of regulation, it can lead to little return on investment (ROI).
Organizations need an enterprise-wide view of their compliance posture with automated compliance workflows that help strengthen AI governance across the globe for various use cases within a single solution.
To scale AI effectively and responsibly, the best approach is to use an end-to-end AI governance solution that supports efficient compliance capabilities and enforces responsible AI principles.
Organizations need a single enterprise view of their compliance posture with automated approval workflows and points of action for each use case and regulation. This method helps to efficiently identify compliance gaps for different AI use cases globally.
To build an efficient compliance process across various use cases and regions, enterprises need an exhaustive data library consisting of compliance policies, processes and requirements. This data library can be used to address their diverse AI use cases in an integrated solution.
The solution should give users the flexibility to make continual updates to policies in a simple process to meet the demands of new and updated regulations.
The regulatory content should be easy to embed into current work streams with guided compliance tasks to allow for easy evidence capture by use case owners.
The solution should be able to facilitate seamless collaboration among organizational stakeholders through a governed multi-user compliance assessment cycle to reduce the need for impromptu and manual processing.
To address these challenges, IBM® watsonx.governance® introduces compliance accelerators—a prebuilt, comprehensive list of AI regulations, frameworks and obligations. This list enables AI use case owners and compliance teams to reduce the time needed to identify their compliance obligations and facilitates mitigating potential risks of noncompliance.
Compliance accelerators within watsonx.governance function as a data-as-a-service library of regulatory content and obligations. This regulatory library can help organizations streamline their compliance processes, enhance accuracy and foster confidence that organizations are addressing applicable regulations.
With watsonx.governance, compliance teams can work efficiently, focusing on critical tasks by helping to automate the tasks that take a considerable amount of time when manually performed such as documenting and researching AI compliance requirements for each use case. IBM watsonx.governance compliance accelerators help automate and tailor the compliance process to the specific business needs of each AI use case and the regulatory requirements of the locations in which the organization operates, all within a cohesive AI governance solution
Request a demo to see how to simplify AI compliance processes with IBM watsonx.governance.
Discover how IBM and Credo AI are partnering to help streamline AI compliance process