Managing AI Risks: A Privacy-Focused Approach for Compliance Officers

Managing AI Risks: A Privacy-Focused Approach for Compliance Officers

Artificial intelligence (AI) presents significant privacy-related compliance risks that demand proactive management. An article by Navex cites a December report from the Bipartisan Artificial Intelligence Task Force saying that because AI depends on vast amounts of data for training, key compliance risks arise for organizations.

AI models often utilize data sourced either through web scraping or proprietary databases, raising concerns about proper consent, data sourcing, and regulatory compliance. For instance, companies may fail to obtain explicit customer or partner consent when using their data for AI training. Even if consent is ostensibly secured, regulators like the Federal Trade Commission could still deem practices deceptive. Moreover, third-party data providers may introduce improperly sourced data, further complicating compliance efforts.

AI systems also pose risks of inferring private data without explicit disclosure, as illustrated by a 2012 case in which a retailer’s marketing systems inferred and inadvertently disclosed a teen’s pregnancy. While synthetic data mitigates privacy risks, it can introduce operational challenges if poorly trained AI leads to biased or inappropriate decisions, creating new compliance concerns.

The article suggests compliance officers should focus on governance and oversight to manage these risks effectively. Key steps include clarifying who oversees AI initiatives, ensuring robust disclosures in privacy policies, and implementing rigorous processes to vet third-party data sources. Additionally, organizations must regularly test AI outputs to verify alignment with ethical and regulatory standards.

Finally, Collaboration is essential. Compliance officers should partner with technology, legal, cybersecurity, and finance teams to define AI risks and mitigation strategies. Senior management buy-in is critical to embed compliance into AI adoption plans.

AI adoption is inevitable, but compliance officers can play a crucial role by leveraging their expertise in risk assessment, third-party management, and regulatory change to guide organizations toward responsible AI deployment.