Since the first iterations of regulation around artificial intelligence (AI) emerged, the regulatory landscape has been a moving target. Yet it continues to lag significantly behind the rapid pace at which the technology is evolving. As a result, many enterprise leaders feel poorly equipped to handle the risks that AI poses to their business on their own – concerns that inevitably stream down to consumers.
With the absence of firm regulatory standards in place, organizations need to take measures into their own hands. This pressing need is fueling the rapid rise of AI guardrails as companies aim to ensure that AI is being used ethically and securely.
Risk Arising from Undefined Regulation
According to Acrolinx, a company that specializes in AI content governance software, their report titled
“A Snapshot of Enterprise Use, Risk, and Regulation” report, 37 percent of enterprises advocated in favor of innovation to be paused until national regulation is established. However, recent developments show that countries may be moving in the opposite direction as President Trump’s administration aims to roll back on AI regulation and encourages other nations to follow suit.
It’s not just businesses that are grappling with the lack of regulatory progress on the AI front. A recent Prosper Insights & Analytics survey found that the top concerns of U.S. adults about artificial intelligence include the need for human oversight (37.8%), hallucinations providing wrong information (34.2%) and the need for more transparency on the data models use (29.9%). With businesses and consumers alike weary about the safety of AI moving forward, where does this leave them?
AI Guardrails Advance Governance
Governance plays a critical role in operationalizing the responsible use of AI by ensuring the safe development and deployment of the technology. In fact, research from IBM showed that 74% of business leaders believe governance will have high impact in next three years as generative AI adoption barriers are removed, yet only 21% of executives believe their organization’s maturity around governance is leading.
With regulatory guidance falling short against the current realities of generative AI, organizations must take charge in implementing their own AI guardrails to drive responsible AI use and ensure compliance with any existing frameworks.
According to Phil Ferst, CEO and Chief Analyst at HFS Research, we can also expect to see a host of vendors emerge in the coming years focused on solving this challenge by providing a framework for organizations to implement guardrails – which will be referred to as guardrails-as-a-service. At the current rate at which AI and technology innovations are advancing, Ferst believes the relationship between the industry and the government (FCC) will be in a constant state of push-and-pull, and rather than expending resources on internally devised guardrails and toxicity training, organizations will turn towards guardrails-as-a-service providers to fill in the gap.
Safeguarding AI-Generated Content
One major area that businesses are leaning in on generative AI is content development. A recent Prosper Insights & Analytics survey found that 40.2% of executives use generative AI for writing assistance. “Most enterprises are navigating AI-generated content creation without clear compliance guardrails, leading to serious regulatory and legal risks. The result is content that fails to meet compliance standards, deviates from editorial guidelines, and ultimately strays off-brand,” warns Matt Blumberg, CEO at Acrolinx.
This is opening hundreds of organizations up to a slew of risks that could even lead to reputational damage. He adds, “Companies today need more than just generative AI algorithms to maintain necessary levels of quality, compliance, and consistency. AI guardrails provide an additional layer of validation for businesses using AI to develop content by automatically reviewing content, identifying areas of concern, and offering suggestions for improvement so that risky content isn’t published and jeopardizing businesses.”
Customer Loyalty is at Stake
AI guardrails aren’t only ensuring the responsible enterprise use of AI, but they’re also protecting consumers who interact with businesses using generative AI – which will soon be virtually every organization.
Recent data from a Prosper Insights & Analytics survey, also found that 88.5% of U.S. adults prefer to speak with a live person for health care matters. Similarly, this also rings true for a majority of adults (86.4%) when it comes to dealing with banking and financial services. This comes as no surprise as these industries handle high quantities of personal identifiable information and sensitive data. Consumers require high levels of security and transparency when interacting with healthcare and banking providers due to this.
Despite individuals preferring to chat with live representatives, these industries rely heavily on AI and automation for efficiency gains. In fact, research from McKinsey estimated that AI could potentially deliver up to $1 trillion of additional value each year in global banking alone, much of which was attributed to revamping customer service accounts with AI.
For businesses using AI for client relations, especially in highly regulated industries, AI guardrails become even more critical to protect consumers from misinformation affecting their decision-making, fraud or security risks, or even just frustrating business interactions. When businesses fail to implement a proper framework to safeguard their clients, they risk eroding long-term customer trust and loyalty.
Uncertain Future of Regulation Requires AI Guardrails
The fast-paced growth of AI technology and the confusing regulations around it highlight the importance of having AI guardrails in place for businesses. By setting up these safeguards, companies can lessen the risks linked to generative AI and ensure they’re looking out for their customers. As AI becomes a key part of business strategies, these guardrails are crucial for navigating the tricky regulatory landscape and ensuring a safer future for AI use.
