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March 7, 2023

Navigating the Risks of AI Integration within Your Organization

As organizations rapidly invest in AI tools, software, and technologies, AI itself continues to evolve at breakneck speed. Early adopters are racing to gain a competitive edge, but they must be equally prepared to navigate the significant changes and potential pitfalls that come with these advancements. With the fast-paced nature of AI integration, it’s crucial for organizations to understand the accompanying risks and manage them proactively.

What Are the Risks Your Organization Should Be Aware Of?

1. Accuracy

With the fast-changing nature of AI, the accuracy of its outputs can be inconsistent. Organizations need to assess where AI-driven information is sourced from, and whether those sources are reliable. Are there biases in the AI’s responses? What happens if AI results are flawed or incomplete? If you've ever experimented with ChatGPT or similar tools, you’ll recognize that not all results are perfect. The risk of inaccurate information presents a challenge for decision-making processes and could potentially lead to misguided actions based on erroneous data.

2. Cyber Security

New AI platforms can be vulnerable to security breaches, making them prime targets for hacking. By their nature, AI systems collect and process massive amounts of data, which increases the risk of data theft and manipulation. The security of AI-powered tools becomes even more critical when sensitive company or client information is involved. Many AI platforms currently lack advanced security features, such as encrypted data storage or differential privacy measures, exposing organizations to significant privacy and regulatory risks.

3. Employment Disruption

AI integration has the potential to replace certain job functions traditionally performed by human employees. While automation can improve efficiency, it may also cause anxiety among employees about job security, negatively affecting organizational morale, culture, and recruitment efforts. To mitigate this, companies must be transparent in their AI strategy. Position AI as a tool to augment employee capabilities rather than replace their roles. Effective communication and training are essential to help employees develop the skills necessary to navigate AI technologies.

According to a report from KPMG in partnership with the University of Queensland, 61% of respondents in their Trust in Artificial Intelligence: Global Insights 2023 survey expressed uncertainty or reluctance to trust AI. Employees need training and reassurance that AI is here to assist them, not eliminate their roles.

4. Ethical and Legal Concerns

As AI platforms become more integrated into daily operations, ethical and legal questions arise. For instance, how should organizations handle mistakes made by AI? Should AI be "punished" like humans? Moreover, intellectual property (IP) becomes a concern—if AI generates creative outputs using copyrighted material (e.g., software, art, music), who owns the rights? Legal disputes over copyright infringement could become more frequent. Additionally, employees may view AI-powered monitoring systems as an invasion of privacy, potentially resulting in employment-related legal claims.

Staying Ahead of the Risks

Organizations must proactively monitor the evolving risks associated with AI adoption. From ensuring data accuracy to addressing security vulnerabilities, preparing employees for AI’s role in the workplace, and understanding legal implications, staying vigilant is key. By doing so, organizations can safely embrace AI to enhance their operations while protecting themselves from its risks.

As always, we are committed to helping our clients navigate these complexities and prepare for the future.

Contact me today.

Jeremy Riddle

Executive Vice President

513.985.4208

jriddle@roehrins.com

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