FROM THE BLOG

As technology evolves at a breakneck pace, we all have heard about the promise of artificial intelligence (AI) – productivity gains, improved speed of business, better quality services, and reduction of human error. However, this is a powerful technology that we humans are not adapted to process, and as the speed of adoption grows ever faster, it can present just as many problems as it addresses.

In an effort to address these risks, a recent Executive Order from President Biden directed agencies across the federal government to respond to the rapid development of artificial intelligence technology.

While it may take years for consumers to see the benefits of such studies, developing an awareness of the pitfalls of artificial intelligence may help us avoid trouble. Here are a few factors to bear in mind until the federal government can ride to our collective rescue with artificial intelligence regulation.

Fraud
New technology is often a gold mine for fraudsters and others looking to wreak havoc. Artificial intelligence in particular, presents a unique challenge with its ability to create credible audio and video messages that are fraudulent. Imagine receiving a distressed call or video message from a loved one insisting that you need to wire funds immediately to a third party. Research and regulation around these technologies are desperately needed, but in the meantime, take steps to ensure that communications are genuine before sharing confidential information or engaging in any financial transaction.

Bias
We have all had a time in our lives when we felt we were unfairly judged. In our complex society, all of us develop different unconscious biases to help us navigate unfamiliar situations. While that approach may help us evaluate opportunities or avoid dangers in our fast-paced world, it becomes a problem when personal bias disadvantages an individual or group of people. When those biases are unintentionally hard coded into AI systems that can have such a profound impact on our lives, the potential for harm can be enormous. As regulators continue to understand the various permutations of such issues, awareness and continued vigilance are our best protections against inadvertent bias programmed into AI systems.

Privacy
Without guardrails, AI can put peoples’ privacy at risk in a myriad of ways. AI can make it easier to extract, identify, and exploit personal data. As always, limit access to your personal information to those with a need to know. You may also consider ongoing credit monitoring as a way to detect identity theft at its earliest stages.

As artificial intelligence continues to evolve, we are all learning about this emergent technology together. Having a network of trusted relationships is the best protection against these concerns. Talk with your confidants, including your financial advisor, about the benefits and risks of using artificial intelligence. A trusted third party may be able to provide a different perspective on an opportunity you are evaluating or a problem you are facing.

Take care,

Robert Coulter
Chief Compliance Officer

Posted by Prospera Financial