Automation for the win: Why manual AI vendor checks are setting enterprises up for failure

Before we start, we think it’s crucial to understand what AI compliance is. 

AI compliance refers to the process of ensuring that AI systems, their developers, and deployers adhere to legal, regulatory, and ethical standards. This means following all AI-related regulations and their components. At this moment, the only comprehensive AI regulation in the world is the EU AI Act, which we discussed in this article.

Why Is AI Compliance Important?

As governments worldwide rapidly work on establishing legal frameworks to regulate the development, deployment, and use of AI, the importance of AI compliance is also increasing. This is especially critical for businesses that face the highest risks - large enterprise companies.

As we have mentioned in previous blog posts, governments and regulatory bodies may hold responsible both AI vendors and the businesses that implement AI into their products when those AI vendors are non-compliant. This shift creates a significant challenge and a mandatory consideration in every procurement process, as enterprise companies have very little room to take on serious risks that could jeopardize their operations. No company wants hefty fines, legal repercussions, or public scrutiny that could damage its reputation, right?

That’s why it’s crucial to thoroughly assess AI vendors and their AI systems in every procurement process. Although it may sound like a routine process, it is actually much more complex.

The vast majority of businesses still conduct manual AI vendor evaluations. In the next section, we will discuss why this manual approach sets enterprises up for failure.

Now that we understand the importance of evaluating AI vendors before closing a deal, we will discuss the pitfalls of manual AI vendor assessments. As we have already mentioned, since AI regulations are still relatively new, the majority of businesses either:

1. Do not conduct evaluations because they are unaware of the responsibilities they may bear if their AI vendor is non-compliant, or
2. Conduct manual evaluations, reviewing AI vendors one by one.

However, the manual approach presents the following challenges:

• Inefficiency and resource intensity
• High risk of human error
• Lack of continuous monitoring
• Difficulty maintaining consistent compliance with constantly evolving regulations

Inefficiency and Resource Intensity

Every procurement process follows a structured approach. For enterprise companies, this process is far more complex due to the higher stakes. Beyond the standard evaluation of a vendor’s business operations, stability, business continuity, and security policies, enterprises must also assess the compliance of AI models with current AI regulations.

Now, imagine an enterprise company procuring an AI chatbot to integrate into its customer support system to enhance efficiency and improve customer experience. There are numerous available solutions, ranging from well-known options like Intercom, HubSpot, or Zendesk, to lesser-known but high-quality alternatives such as Drift, Elfsight, or Tidio. These are just a few examples, but in reality, an enterprise would evaluate many more options during its procurement process.

Each of these options would need to be manually assessed against multiple criteria - from transparency and policies to technical documentation proving compliance with legal standards. Sounds like a tedious process? That’s because it is - it is inefficient, slow, and resource-intensive. This kind of approach will significantly delay AI adoption and postpone the operational cost savings that AI solutions are meant to deliver.

High Risk of Human Error

All enterprise companies have legal teams, however, these teams need professionals who deeply understand AI regulations. At this moment, very few companies have legal experts with such specialized knowledge. Even if an enterprise does have a lawyer well-versed in AI regulations, AI compliance extends beyond legal aspects. It also involves technical compliance, meaning companies must have technical personnel who thoroughly understand AI technology.

Beyond the need for additional hiring, relying on humans to assess AI systems increases the risk of misinterpreting laws or overlooking technical aspects of AI models. In short, human involvement in AI system evaluation raises the likelihood of human error.

With this approach, even small oversights or mistakes in AI vendor assessments can cause significant operational, financial, and reputational damage, putting the enterprise in a high-risk situation.

Lack of Continuous Monitoring

AI compliance is not a one-time process. It’s not enough for an AI vendor to be compliant only at the time of contract signing or solution implementation. AI compliance is an ongoing process, meaning that enterprise companies remain responsible for their vendors’ actions as long as they use their technology.

With manual evaluation, it is very difficult, if not impossible, to continuously monitor the performance and legal compliance of an AI vendor’s system.

Data leaks, hallucinations, adversarial attacks, model drift, and other AI-related risks can occur at any time. That’s why it is crucial to have technology that provides real-time or near real-time monitoring of AI systems, and can respond immediately if any deviations occur.

Difficulty in Maintaining Compliance with Constantly Evolving Regulations

As we mentioned earlier in this article, governments worldwide are rapidly developing laws to regulate AI. Technology is evolving at an unprecedented pace, and legal frameworks are changing just as quickly.

Because of this, manual AI vendor evaluation does not bring any (significant) value to enterprise companies. Some compliance requirements that are valid today may no longer be applicable in just a few weeks or months. This makes it essential to have a system that is always up to date with the latest legal requirements and continuously evaluating AI vendors in real-time against the most recent regulatory standards.

Now that we understand the pitfalls of manual AI vendor assessments, in the next section, we will explain why every enterprise should strive for an automated AI vendor evaluation system.

In short, we believe that automating AI vendor evaluation is inevitable. Automation will eliminate all the pitfalls of manual assessments.

With automation, efficiency increases, and resource allocation becomes more optimized, leading to direct cost savings for enterprise companies. This does not mean layoffs but rather a smarter redistribution of employees across projects or business areas.

Additionally, automated AI vendor evaluation systems check vendors based on predefined yet always up-to-date criteria. In such systems, laws are accurately interpreted, technical requirements are fully understood, and the risk of errors is minimized - especially since human involvement in the evaluation process is eliminated.

Automated systems also continuously monitor AI systems in real-time, allowing enterprises to detect and address discrepancies before they become problems. 

Furthermore, automation software updates itself with the latest laws and regulations, ensuring that AI vendor assessments always align with the most current legal and market requirements. Enterprises no longer have to waste time tracking, understanding, and interpreting AI laws - the system does it for them.

One such solution that can help you is TrustPath. It enables automation of the AI vendor selection process by:

• Automating AI vendor policy and documentation reviews
• Assessing vendor-related risks
• Evaluating compliance with legal frameworks (EU AI Act, GDPR, etc.)
• Verifying AI system security
• Providing continuous monitoring of AI systems from selected vendors

Contact us to ensure your AI vendors meet the highest compliance standards and to protect your enterprise business from the numerous risks associated with AI vendors and AI technology usage.