Pictured: Author, Lawrence Vesey, Partner in Sia Partners.
The opportunities presented by the rapid and on-going developments in Gen AI are truly remarkable, offering a combination of the positives of innovation and the threats of disruption. By Lawrence Vesey, Partner, Sia Partners.
However, an underlying consideration that all organisations need to address is whether the adoption of Gen AI will increase or decrease the level of trust in their organisation – across shareholders, staff, suppliers, customers, regulators and all other stakeholders. In a world where the level of trust is declining across previously trusted institutions, leaders who can maintain and increase trust in their organisations have the opportunity to build a distinctive and sustainable advantage in their markets and with their customers. Conversely, damaged reputation is difficult and expensive to recover – sometimes fatally so.
It is in this context that the recent EU AI Act should be viewed, rather than as another piece of onerous legislation. This Act has been described as being potentially the most significant piece of legislation since GDPR for technology in the EU, and it is certainly the most comprehensive single piece of legislation globally to attempt to regulate the use and deployment of AI to date. With potentially significant penalties for non-compliance (up to 7% of global turnover), the act defines 4 categories of AI with different requirements for each (Critical risk areas where use of AI is prohibited, high risk where rigorous controls are needed, and moderate to low risk where the compliance overhead is less but still requires code of conduct and transparency.) The act comes into force on 1 August 2024, with the first provisions mandatory in February 2025, and the remaining provisions in force by 1 August 2026.
© Copyright Sia Partners 2024
Building an AI readiness plan to understand the impact of using AI in your organisation was always important – now it is also urgent. Doing it quickly, in a way which is pragmatic, risk driven and commercially aware while focusing on the wider issue of reputation and trust may require support. Sia Partners are a leader in helping organisations transform their business while remaining compliant, and our proven methodologies are helping clients to ensure they are ready for the first deadline in 2025.
An AI breach may have a greater resonance for Boards of Directors and Executive Leadership teams than a data breach does today. Decisions may have been made based on AI and triggered consequences for customers. Either way, it’s a matter of trust, so now is the time to get ready.
Lawrence Vesey is a partner in Sia Partners, a global management consulting firm.