In 2022, the ever-expanding use of artificial intelligence and machine learning across industries will likely lead to new regulations, according to industry watchers.
The development of AI regulations will demand government officials and public employees to consider a wide range of concerns -- everything from ethical data analysis and algorithms to cybersecurity and national security. “Policymakers are now dealing with the challenges of AI-driven decisions, including self-driving cars and medical implants,” said Michael O’Connell, chief analytics officer at TIBCO, a business intelligence software firm.
In addition, the government is evaluating the negative effects of social media platforms, O’Connell noted. “Congressional committees are considering how to regulate social media platforms to reduce fake news, hate speech and terrorist recruitment,” he said.
Given the important role of data in the development of AI and machine learning technologies, the U.S. and other nations will also likely continue to pay special attention to data privacy laws. “Using the EU’s General Data Protection Regulation and California Consumer Privacy Act as a model, governments globally and state by state in the U.S. will create new regulations to give consumers rights over the data companies collect about them and how they use it,” said Krishna Tammana, chief technology officer of data integration and data governance company Talend.
Enterprise compliance is already complex, given that data privacy regulations vary by state, country and region. The existing complexity, paired with accelerating AI developments, could push regulators to enact broad standards, Tammana added.
These potential and in-progress legislative developments show that policy and the private sector are beginning to catch up to the ethical analysis of AI in academia. An ethical lens is often applied to policy decisions around AI and machine learning, O’Connell said. However, as regulators work to account for AI adoption in the private sector, they must consider how ethics intersect with the practical implications -- both positive and negative -- of emerging technologies.
All Eyes on Finance Industries
No sector will likely remain untouched by AI regulations, but the use of AI in finance industries is a logical area to focus on.
The finance industry is already heavily regulated, and its health (or lack thereof) has widespread economic reverberations. The sector’s increasing adoption of AI technologies has further encouraged regulatory scrutiny. In some cases, AI-based products can improve an organization’s regulatory compliance, but products also have their own ethical implications -- for example, racial bias that has been identified in facial recognition algorithms.
“The use of artificial intelligence in finance … expanded massively in 2021, and it will only increase in the coming years,” said Benoit Grangé, chief technology evangelist at cybersecurity company OneSpan. “Policies and legislation pertaining to the use of artificial intelligence will lead to regulations in 2022 and beyond.”
In March 2021, U.S. financial regulators requested information on the use of AI by financial institutions. “The regulators wanted to understand how AI is used in [institutions’] provision of services to customers and for other business and operational purposes,” Grangé said.
In December, the Federal Trade Commission issued an Advance Notice of Proposed Rulemaking, a precursor to new regulations.
European AI regulations are likely a bit further down the road but still inevitable, Grangé said. The European Commission’s proposed Artificial Intelligence Regulation, which is currently in the legislative process, tries to strike a balance between AI development and risk-based regulation. It could be late 2022 or 2023 before a decision is made. If the legislation passes, the first regulations will likely be published in 2023 and take effect in 2024, Grangé noted.
Business Benefits of AI Regulations
AI and data analysis markets are in a state of rapid development, with the ongoing COVID-19 pandemic driving organizations to adopt and scale technologies. Naturally, startups are looking for their way into this growing area.
“In 2022, we will see more AI startups focused on ethical AI and tools enabling regulation of AI applications, incorporating industry standards like the Robotics Industry Association and IEEE,” O’Connell of TIBCO predicted.
Some argue that regulation of AI applications, whether done by a government agency or by an application, will stifle innovation. But if AI regulations are coming either way, the smarter (and more ethical) business plan will include regulatory compliance from the jump.
“Ensuring ethical AI will only lead to better data insights, as organizations must ensure all data feeding algorithms are unbiased, trustworthy and clean,” O’Connell said.