Most enterprise leaders are skipping over a crucial step of AI adoption.
Blinded by the table-stakes nature of AI implementation (it’s a key factor for remaining competitive in nearly every market these days), they’re letting compliance and governance fall by the wayside. A recent survey of over 1,000 global respondents found that more than one in three (36%) organizations currently have no AI compliance policy in place.
That means they’re investing in AI, but not in the strategy nor the safeguards required to stay compliant and protected from bad actors. With a revolving door of regulations, growing AI threats, and risk from third-party vendors, this illustrates an urgent problem. And as customers become more knowledgeable about the risks associated with AI, a lack of a compliance strategy can have a detrimental impact on current customer retention and winning new deals.
Making governance and compliance integral parts of your AI strategy has thus become critical for overall business growth.
Customer concern is rising
As with any rapid, widespread technological advancement, customers are wary about putting their faith in AI. Many have been burned in the past by trusting too much too soon, and witnessing companies regularly announce data breaches isn’t nudging them any closer towards full acceptance.
Risk management is therefore at the top of their minds. In fact, four out of five companies that use AI are already fielding questions from customers about risk. People are worried about the ramifications of data breaches, and they want to be assured that their information is safe in the hands of AI.
But when companies can’t provide the right answers, business takes a hit. More than half of all respondents have had a vendor or a prospect reject a report due to quality issues, be they missing documentation, lack of relevant insights, or overall lack of trust in the auditor’s reputation. Ultimately, AI assurance expectations did not arrive as a mandate, but as a question: procurement teams began asking vendors to show evidence of AI governance; boards requested independent views on AI risk exposure; and insurers looked for objective signals of governance maturity.
As such, embracing AI alone is no longer a strategic advantage, but proving your company uses it responsibly certainly is. And as consumers and partners demand governance, compliance is making its way from a security-focused conversation to one demanding C-Suite attention.
Uncertainty is the greatest bottleneck
Awareness among high-level decisionmakers is far from lacking. The majority of executives (72%) acknowledge that compliance strategies must adapt for the AI era, and 63% have already implemented AI compliance policies within their organizations.
A significant adaptation to call out is the evolution of the CISO role. These executives are typically tasked with governance initiatives, but in the age of AI they’re navigating compliance in an incredibly difficult environment. Fortifying their enterprises against growing AI threats and increasingly sophisticated ransomware only scratches the surface of what CISOs are facing; they’re also dealing with the systemic problem of understaffed departments and shrinking budgets.
Like everyone, they’re expected to “do more with less.” So, as we see customers continue to raise questions on governance, this will fall into the CISO’s scope of responsibilities as well. But they can’t do it alone. A strong governance framework must become a businesswide priority, and one that is communicated clearly through all levels of the organization rather than consigned to one single department.
Designing your compliance policy
Businesses can no longer rely on regulations to guide them on what to do in this environment. Proactivity will be the name of the game here, because customers aren’t waiting to ask tough questions. As your enterprise begins tackling its AI compliance policy, stakeholders should keep the following in mind:
Stop designing AI governance around a single regulation. Technology (and the threats posed by those who abuse it) is evolving faster than legislation. This creates an inordinate amount of compliance “blind spots” as capabilities change. The key to sustainable change is proactive compliance that anticipates, rather than reactive risk management that retroactively fixes.
Anchor your program in standards, and map regulatory obligations on top. Standards exist precisely for this current environment. They provide a stable operating backbone when laws shift and uncertainty reigns. Courts, regulators, and insurers increasingly rely on standards as evidence of due care, because they’re structured, auditable, and internationally recognized.
Be explicit internally that the goal is not perfect prediction, but adaptability. Your organization’s CISO and security staff aren’t psychic. Expecting them to accurately predict every threat is unreasonable – especially when considering third-party risk. Your business will be best suited by building a compliance foundation that can adapt along with industry changes.
These principles should help guide your company as it designs its AI compliance policy. And if you’re unsure of where to start, here are five simple steps you can take to ensure you’re on the right track. Remember, sustainability is key, so these steps are ideally spread out over 90 days:
- Assign accountability: Designate clear ownership for AI governance responsibilities.
- Gain visibility: Create a comprehensive inventory of all AI deployments across your entire organization.
- Triage risks: Identify the high-risk AI use cases that require immediate attention.
- Conduct basic assessments: Evaluate the regulatory, reputational, and compliance risks associated with each of these systems.
- Implement immediate controls: Establish essential safeguards for high-risk systems to manage exposure while you refine your policies.
“What about ROI?”
Leaders are obsessed with ROI, and rightfully so. It may seem counterintuitive to invest more time and resources into safeguarding your AI investments by building new company policies before ever seeing a cent of ROI, but it’s well worth the effort.
Governance is the single most important factor in determining the success or failure of AI projects. Deferring governance until results start to show is a common mistake, because ROI is, in reality, unattainable without establishing governance from the very beginning. The spike we’re seeing in consumer demand is only underscoring this fact: businesses that cannot answer basic questions on their AI governance strategy will fall behind competitors that can.
Consumers are becoming savvier by the day. Costly, worst-case scenario data breaches hold them back from fully trusting AI (and, consequently, the companies that deploy it). Businesses that recognize AI compliance and governance as strategic priorities and invest now will not be found scrambling later; they’ll be the ones moving forward and building confidence with the C-Suite and their customers alike.
