Navigating AI-Related Risks: A Guide to Enhancing Compliance Efforts
In the era of rapid technological advancement, the integration of artificial intelligence (AI) into business operations offers unprecedented opportunities for efficiency and innovation. However, alongside these benefits come new challenges and risks that require careful consideration to ensure regulatory compliance and ethical responsibility. Recently, the Department of Justice (DOJ) has emphasised the importance of proactively managing AI-related risks as part of an effective compliance programme, signalling a shift in regulatory expectations. In this blog post, we explore the key considerations and actionable steps for organisations to effectively navigate AI-related risks and enhance their compliance efforts.
Understanding the DOJ’s Guidance:
In a significant move, Deputy Attorney General Monaco announced that the DOJ would incorporate the assessment of risks associated with AI into its policy on the Evaluation of Corporate Compliance Programs. This directive highlights the DOJ’s focus on targeting illegal activities facilitated by disruptive technologies, including AI, in its efforts to combat new and emerging threats.
While AI offers opportunities for businesses to improve efficiencies, DAG Monaco cautioned against the significant risk of misusing AI for corporate crime, such as fraud, price fixing, market manipulation, and discrimination. Compliance officers are now on notice that the effectiveness of an organisation’s compliance programme in mitigating the risk of AI misuse will be a key factor in DOJ assessments during corporate resolutions.
Assessing AI Risks:
Integrating the assessment of AI risks into compliance programmes requires a comprehensive review of all business activities leveraging AI across the organisation, as well as existing policies and procedures governing those activities. Organizations must consider the potential regulatory, contractual, and reputational implications of AI use, as well as assess the level of risk by evaluating existing controls, the likelihood of violations, and potential damage to the organization. Collaboration among stakeholders and leveraging external expertise may be necessary to ensure a thorough understanding of AI-related risks, similar to approaches taken for other significant compliance risk areas such as antitrust, bribery, and data security and privacy.
Key steps for implementation:
Identify AI Risks and Compliance Gaps: Gather relevant information to identify AI-related risks and assess the inherent risk of financial impact and probability. Conduct a thorough review of current compliance protocols to identify gaps in addressing the identified AI-related risks.
Integrate AI Risk Assessment: Determine the appropriate timing, scope, and method of conducting assessments of AI-related risks as part of the compliance programme’s overall risk assessment for the ganization. Develop mechanisms for assessing the compliance program's design, implementation, and effectiveness in managing AI risks, including evaluating the effectiveness of compliance strategies and controls implemented to mitigate identified AI-related risks.
Identify and Engage Stakeholders: Foster collaboration among key members of business operations, legal, IT, and compliance functions to leverage expertise and ensure a holistic approach to addressing AI-related risks.
Continuous Improvement: Establish processes for ongoing monitoring, assessment, and enhancement of the AI risk assessment to adapt as the organisation’s risk profile changes due to evolving business processes, the elimination of known vulnerabilities, regulatory changes, and the identification of additional risks.
Document Compliance Efforts: Maintain comprehensive documentation of AI risk assessment processes and mitigation strategies.
Effectively navigating AI risks requires a proactive approach and a commitment to continuously enhancing compliance efforts. By incorporating AI-related risk assessment into corporate compliance programmes, organisations can mitigate potential liabilities and regulatory scrutiny while upholding legal and ethical standards. DOJ’s guidance, integrated into the evaluation of Corporate Compliance Programs, will serve as a valuable framework for organisations to strengthen their compliance posture in the face of emerging AI technologies, ensuring alignment with evolving regulatory expectations. As organisations embrace the transformative potential of AI, prioritising compliance and risk management is essential to foster trust, uphold integrity, and drive sustainable growth in an increasingly digital world.