Decoding AI Compliance: Turning Regulations Into a Competitive Edge

Governments and regulatory bodies worldwide are witnessing the true power of AI as it rises in popularity and is recognized for its strength. Now, we’re seeing many new laws and guidelines introduced to ensure that AI technologies are developed and used responsibly. 

On a state level, we’re seeing a slew of new regulatory proposals from California. On an international magnitude, the European Union’s AI Act stands out as a significant piece of legislation that aims to set a worldwide standard for artificial intelligence regulation. 

These proposed and enacted compliance procedures are set to have ripple effects across the globe. In fact, since the publication of the EU AI Act, I’ve witnessed firsthand the growing anxiety and uncertainty among enterprises. Many have reached out with concerns about how this new legislation will impact their current compliance efforts and have begun pressing their vendors for clarity on their strategies to meet these new requirements.  

Understanding the Current AI Regulatory Environment 

For enterprises and vendors, this tightening regulatory environment brings both challenges and opportunities. On the one hand, the rapidly changing rules generate uncertainty, creating many questions from businesses on whether they can remain compliant. Alternatively, these regulations provide a framework that can drive innovation and build trust in AI solutions, supporting the ethical, transparent and safe use of the AI solutions.  

Related:EU AI Act Takes Another Step Forward

Despite the evolving regulations and looming deadlines, enterprises and vendors can seize this moment to not only ensure compliance but also leverage it as a strategic advantage. While the complexity of these regulations may seem daunting, they present a unique opportunity for companies to differentiate themselves by making compliance a core component of their AI strategy. 

By understanding the current regulatory landscape and proactively adapting to it, companies can turn what might seem like a burden into a driving force for innovation and trust in AI. 

The Challenges Posed by Tightening AI Regulations 

Living in Washington, D.C., I’ve encountered my fair share of confusing parking signs -- those ones that say, ‘No parking Monday through Friday, except on these holidays at these times,’ and so on. If you’ve ever commuted in a city, you’ve likely faced the same headache. Most of us have probably just taken a chance, parked our cars, and hoped for the best. 

The uncertainty and confusion surrounding evolving AI regulations mirror this challenge. Vendors are concerned that many of the regulations are of a broader scope than their current frameworks, which requires costly adjustments. For example, companies will need to invest in AI governance, reviews, and potentially third-party audits and assessments.  

Related:Why CIOs Are Under Pressure to Innovate

For enterprises, there’s confusion both internally and externally around regulatory compliance. Externally, companies are concerned about whether their vendors and third parties are handling customer data in a compliant manner. Internally, under regulations like the EU AI Act, companies face specific obligations as providers, deployers and manufacturers.  

Finding Compliant AI Solutions 

One of the key questions I recommend enterprises ask themselves when searching for, or making sure their current AI vendors are compliant, is “can AI solution providers implement regulations directly into their product?” 

Rather than having to make costly refinements to their solution to meet the criteria of each new regulation, providers must develop a solution with the capability of seamlessly adapting to evolving regulations. This can be achieved by the vendor investing sufficient time and money into internal compliance programs. As the economic, political, and social landscape continually turns the tides of privacy and regulatory standards, enterprises are safest integrating a provider that doesn’t make compliance a goal, but a habit. 

Related:Overcoming AI’s 5 Biggest Roadblocks

Cultivating Resilience  

Regulations across the nation and the globe are just different enough that enterprises and vendors must review the nuances. There are lots of international comprehensive programs where intricacies can be buried. Solution providers that continually allocate time and resources to robust privacy and compliance programs are more likely equipped to handle an influx of regulations. This investment can be seen as developing privacy teams, privacy management policies, frameworks, and data governance.  

Enterprises can search for vendor partners that have in place AI or privacy compliance initiatives and track all data as it’s transferred and manipulated internally and externally. Especially working with an AI solution that is trained leveraging available data -- it is crucial to ensure the data being used to train the system is unbiased and ethical. 

Companies must search for vendors that are in the know about international regulations and state-by-state regulations, and that are looking at changes in processes and activities and assessing which markets, industries, and users the regulations pertain to.  

Turning Compliance into a Strategic Asset 

As the regulatory landscape around AI continues to tighten, enterprises have a unique opportunity to not only meet compliance requirements but to turn these obligations into a strategic advantage.  

Customers, partners, and regulators increasingly favor companies that demonstrate a strong commitment to ethical practices and regulatory adherence. By positioning themselves as leaders in AI compliance, solution providers can enhance their reputations and gain a competitive edge.