Artificial Intelligence (AI) is the newest innovation being promoted to bring efficiency to businesses. This article will look at the potential risks with the usage of AI and provide information on avoidance procedures.
By Cleveland SCORE
Artificial Intelligence is defined as machines (computer systems) utilized to simulate human intelligence. The decision making performed through AI is completed through system algorithms. To obtain a solution, the AI system is fed large amounts of data points which it then analyzes for correlations and patterns. Through these patterns it can make predictions and provide written materials on topics or run machines on a production line. There are many advantages and disadvantages to the use of AI.
- Advantages:
- Efficient use for detail-oriented jobsUseful and time efficient for tasks requiring large amounts of dataCan save labor time and increase productivityConsistency of results
- AI agents are always available for problem resolution and customer information
- Disadvantages:
- Cost to acquire and implementRequires depth of technical knowledgeIn the current technology environment, there is not a large supply of workers with skills to build these complex toolsMay reflect bias of developer
- Adverse impact on unemployment rate
AI in its various forms is utilized today in the field of medicine, machine automation, robotics, self-driving vehicles, and text, image, and audio generation. Specific applications and some of the common uses include:
- Healthcare – Better diagnosis and improved outcomes at lower costs
- Business – Algorithms integrated into analytics and customer relationship management (CRM) that will identify information and thus serve customers better
- Finance – Applications for loans, documentation preparation for home purchases and trading on Wall Street
- Law – Reviewing documents for discovery, which is currently a labor-intensive process.
- Manufacturing – In the use of robotics on production lines for many labor-intensive processes
- Banking – Loan decisioning process, customer service, monitoring regulatory requirements
- Transportation – Manage traffic and flight delays
These are just some of the uses both current and future for artificial intelligence. But with the growth of this technology there needs to be a concerted effort to monitor the risks associated with it. As the technology relies on algorithms to produce results, this implies that results should never be considered to be 100% foolproof. This is due to two factors: exceptions to any process are inevitable and the potential for system and data shortcomings. The latter cause gives rise to many of the potential risks associated with the use of AI.
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Risks Associated with Artificial Intelligence
- Machine learning or AI bias – Algorithms will provide results by determining patterns from the data provided. If the data is skewed toward a particular race, gender, or age groups when used for real estate, marketing, banking, business, and customer service type applications this can cause serious regulatory violations and potential reputational risks.
- To avoid AI bias will require a knowledgeable individual reviewing the results prior to utilizing the information
- Factual fallacies – Incorrect answers or information are provided to customers. Even with all the accurate information provided, the system can still provide the wrong answer or information because it may have the need to look for a predictive part of the answer. When this occurs, it can insert invalid response information. The way this information appears within context can make it difficult to identify these fallacies. This can impact many of the business uses whether with customers or even on production lines. It is especially prevalent when used for lengthy and complex analysis.
- To avoid factual fallacies, it is best to break-up the task and have it analyzed one section at a time. It will still require human oversight and review from a knowledgeable individual to ensure accuracy.
- Misapplication of AI tools – Recognize what the AI tool was developed and built to do and do not use it outside its intended abilities
- To avoid this risk, research how others are utilizing it. Also request a product demo or a trial so you can use it alongside other tools that perform the same function. This will allow you to match results and determine its accuracy and capabilities.
- Homogeneous content – While AI can digest, combine and reconfigure content, it does not have the ability to create something that can stand out. Marketing materials need to have content that can capture the target audience’s attention.
- To avoid this risk, consider the AI result as a starting point then update the materials so they represent your company and its values and mission statement. Make sure it accurately portrays the product/service and the appropriate uses and advantages.
- Potential legal challenges – When writing marketing materials, remember that AI is utilizing materials already written. If there are company patents or copyrights associated with that content, it may cause a legal problem. Conversely, keep in mind that your AI content may not be protected either.
- To avoid this risk, do your homework when selecting the AI tool. It should have positive reviews and address its policies and procedures in copyright laws.
- Security & privacy breaches – AI tools are especially prone to privacy attacks as there are few policies covering the assessment of risk types and levels to which these applications may be exposed. From a security perspective, due to the number of tools available, it may be difficult to identify the legitimate tools from those that are malware.
- To avoid these risks, due diligence into tools is important to make sure you obtain information on the privacy and security policies. Also do not use the tool for sensitive data.
In summary, while there are advantages to be gained in business through artificial intelligence, the success of its use is continued oversight of results, due diligence in selection, continuous testing of results for accuracy, and total understanding of the algorithms. Remember, as with anything there are always exceptions — therefore procedures and policies related to exception processing should be well defined in advance.
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In the event your business may have a unique need for outside assistance with operational issues, growth initiatives or other business matters, SCORE mentors can offer you expertise and support. Mentors with a wide range of technical and user experience are available on request.
The Cleveland Chapter of SCORE was founded in 1965 to foster and support the small business community in Northeast Ohio through mentoring and education. There are currently 80 volunteers with experience in the fields of business ownership, managers, accountants, attorneys, and other business fields that are ready to share their knowledge through mentoring. For more information about our services for small business visit the website at www.cleveland.SCORE.org or call (216) 503-8160.
In addition to mentoring services, there are also webinars and on-demand classes listed on the website. To attend a webinar, visit the site and register. Following are upcoming events:
Seminar Title Date & Time
Making Your Plan “Bankable” (Growth Capital) 8/17 – 4:00 PM
Networking 2: Grabbing Attention at a Networking
Event 8/17 – 7:00 PM
Tips for Running a Successful Business for Creative Types
Ideal People & Anybody with Passion 8/22 – 1:00 PM
Navigating Cash Flow 8/22 – 4:00 PM
Financial Series 2: Using Financial Data to Manage Your
Business 8/22 – 7:00 PM
Safety & Risk Management – Protect Your Business & People 8/24 – 1:00 PM
Cost Optimization Best Practices 8/24 – 7:00 PM
Brand Clarity: Make Your Marketing Easy & Effective 8/29 – 1:00 PM
10 Mistakes That New Business Owners Make 8/31 – 4:00 PM
How to Use AI in Your Digital Marketing Strategy 9/7 – 1:00 PM
Score Cleveland Connect 2023 9/12 – 5:00 PM
Discover the Best Franchise Opportunities for You for 2023 9/14 – 1:00 PM
Alternative Funding Options for Hispanic-Owned Businesses
In 2023 9/19 – 1:00 PM
10 Business Planning Tips for Starting a Business 9/21 – 1:00 PM
