Join the AI ride but don’t forget to belt up

July 11, 2023

Source: Unsplash/Wade Lambert

New data shows Australian businesses are racing to adopt generative AI (GenAI) tools, even if their enthusiasm is outpacing their awareness of challenges and risks.

The rise of GenAI into the mainstream has given businesses a big opportunity. Yet any advantage could be eroded without simple safeguards to protect data.

One in three business leaders of mid-market firms reported already integrating a GenAI tool into their operations, according to new data from Pitcher Partners’ Business Radar.

Among the respondents who indicated a high degree of confidence in future success – and increasingly a hallmark of assured business decision-makers – more than 50% were already using GenAI tools.

Awareness of GenAI tracks consistently with the rapid uptake of new and evolving GenAI tools such as ChatGPT, the platform that reached more than 100 million users worldwide in its first two months.

Respondents overwhelmingly agreed that GenAI will lead to new products and services (84%), streamline operations and processes (82%) and free up more time to focus on business strategy (79%).

But while nearly all mid-market business leaders surveyed had heard of GenAI, a gap has emerged between simple uses and operational implementation of the new tools.

The survey revealed the limited focus for business leaders as they explore the new technology, confining use cases to back-office or support tasks for AI such as administration, email writing, or basic content creation.

Over a third (39%) of the respondents said they don’t fully trust the data security and accuracy of generative AI tools and nearly one in five (19%) said putting safeguards in place was their biggest barrier to adopting AI.

Peter Lawrence is a partner at Pitcher Partners. Source: Supplied

But the absence of concern around the risks was one of the most surprising finds from the survey – just 12% of respondents indicated any concern at all about the risks.

A third responded that they were not worried about the risks, and 16% said they didn’t see any risk. For those that have adopted GenAI, over half have not put in any safeguards, while 25% said they were thinking about it but had not yet acted.

These statistics are worrying in an era where data breaches are more common than ever, especially when you consider the probability that most businesses will have staff already using GenAI on their own initiative.

Without appropriate safeguards, there is an increased risk that confidential customer or business information could be entered into tools, which may make it available in the public domain and pose a significant reputational risk.

Even businesses that are yet to use GenAI need to address and mitigate the risks it poses, through appropriate frameworks and risk management strategies.

AI tools can deliver transformational insights in a fraction of the time and create much-needed capacity that can be directed to capitalising on the next business opportunity.

With such a widespread rapid uptake, generative AI may soon evolve into not just a competitive advantage, but an existential requirement.

However, tapping into the power of generative AI cannot come at any cost. The financial outlay and commitment to investing in the right skills are important considerations.

It is not especially difficult to mitigate the risks with the right frameworks, but the costs to reputation damage, if a breach occurs, would far outweigh any hiring or monetary expense.

Peter Lawrence is a partner at Pitcher Partners in Newcastle.