- More customers want AI companies to answer extra questions and go through more checks when buying their services. They want to know more about the AI system they use.
- When AI companies share more information, it's good for everyone. It builds trust, makes legal problems less likely, and helps make better products based on what customers say.
- The EU has made a law saying AI companies must be clear about how their technology works. This is the first rule of its kind and aims to make AI safer and more trustworthy for everyone.
Imagine driving a car with a blindfold on. You might get where you're going, but it would be scary and dangerous. Sadly, more and more businesses using AI feel the same way. These AI systems provide information to help them make decisions, yet they don't even know how they work or how reliable the information the AI systems provide is. Users, especially business customers, are starting to demand answers and full transparency.
This isn't just a passing trend; we understand that more and more customers are requesting AI vendors to pass additional checks during the procurement process, and answer their specific questions related to AI models used.
Demanding transparency isn't just about being responsible; it's about making AI better.
If we know how AI works, we can trust it more, make it safer, and truly make our lives easier. In this blog article, we'll talk about why customers are demanding transparency in AI, how it helps, and what regulators think about it. Let’s move on.
Drivers of the Transparency Movement in AI
Today, as AI becomes more widespread, people are becoming increasingly aware of issues like privacy, unfairness in AI decisions, and the responsible use of technology. The easy access to information online has made users more informed and keen to understand how AI systems work and their impact on their jobs and everyday life. Social media has played a significant role in this shift by bringing to light problems with AI, such as privacy issues and intellectual property infringements. This has prompted customers to demand clearer explanations from AI companies about how their systems make decisions and manage data.
This is especially true for business customers. It is not uncommon for them to share confidential information and business secrets with AI software or apps. Transparency allows companies to have peace of mind while shortcutting usually time-consuming tasks and improving efficiency, ensuring that their data won’t end up in the wrong hands.
A recent survey conducted by TELUS International found that 71% of respondents want companies to be transparent about how they are using AI in their products and services.
To sum up, more and more people want AI to be clear about how it uses and protects their data because this builds trust. When businesses use AI, they also want to be sure that their confidential information is safe. This is why being open about how AI works is so important. It's not just a nice extra thing; it's necessary for keeping customers and doing well in the market. Next, we will see how being open and honest is good for the companies that make AI as well.
Transparency is a Win for AI Companies Too
While customer demand is the driving force, transparency in AI development isn't just about fulfilling expectations, moreover, it's a win-win proposition for both AI companies and customers.
Transparency for AI companies can sound like an obligation at first, but actually, it offers numerous advantages.
Firstly, it enhances brand reputation by fostering trust and building stronger relationships with customers, ultimately resulting in a more positive brand image. Companies that openly discuss their AI practices are perceived as more trustworthy, leading to increased customer loyalty.
Secondly, transparency reduces legal risks associated with opaque AI systems, such as challenges related to bias, discrimination, and data privacy. By demonstrating responsible development and compliance with regulations, vendors can mitigate these risks effectively.
Thirdly, transparent systems facilitate easier regulatory compliance as regulations around AI continue to evolve. Such systems are more adaptable and ensure compliance, thereby saving valuable time and resources.
Lastly, transparency contributes to improved product development by soliciting and incorporating customer feedback. Insights gained through transparency initiatives inform product development, resulting in AI solutions that better align with user needs and expectations.
It's clear that transparency benefits both sides of the equation. As customers demand more openness, vendors who embrace it will thrive in the future of responsible AI development. In the next section, we will talk about how governments around the world have recognized the importance of transparency in AI and what their plans are.
Transparency is Becoming a Regulatory Norm
As we mentioned, people all over the world are asking for more transparency throughout the development, deployment, and use of artificial intelligence.
Governments are stepping in as well, recognizing the need for responsible AI practices. The EU AI Act stands as a pioneer, demanding unprecedented levels of transparency from AI companies. This means sharing significantly more information with customers about how their systems work and make decisions – a shift that presents both challenges and opportunities.
However, the benefits of transparency are undeniable. Imagine explaining to a customer, in clear and understandable terms, how your AI arrived at a decision, product recommendation, or any other sensitive interaction. This level of transparency fosters trust and understanding, building strong relationships with your customers from the very first conversation. Ignoring this could come at a steep cost, as revealed by IBM 2022 Global AI Adoption Index - a staggering 83% of customers would switch vendors if they felt their data was mishandled. We can all agree that transparency is not just a regulatory hurdle; it's a strategic advantage in the competitive landscape.
The EU AI Act is just the leading edge of a global shift towards transparent AI. Initiatives like the OECD AI Principles and the Explainable AI (XAI) movement further underscore this growing emphasis.
Companies that proactively embrace transparency will be well-positioned to succeed in this evolving landscape. They will not only comply with regulations but also gain a crucial edge in building trust and loyalty with their customers.
Remember, in the age of AI, transparency is not optional; it's inevitable. Choosing to be a leader in this movement is not just a compliance issue; it's a smart business decision that builds trust, fosters loyalty, and positions you for success in the ever-evolving world of AI. What is your take on this - waiting for regulators to enforce rules, or starting to build trust among customers from the early days? We would recommend the latter option.
To support you throughout your AI compliance journey, we have built a tailor-made EU AI Act impact assessment that will help you understand a level of risk associated with your AI system according to the EU AI Act. Furthermore, it will shed light on the next steps and guide you through the process.
Take the first step toward your market dominance, start the assessment.
