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1. What is Generative AI and how will this impact your business?
Based on user prompts, generative AI systems like ChatGPT use algorithms to recognize underlying patterns from input parameters and existing material in order to generate new content, including audio, images, text and videos.
Why is it getting so much hype? As Microsoft Copilot (a new integrated AI personal productivity tool) notes, “it can turn your words into the most powerful productivity tool on the planet.” Indeed, it can help improve efficiency by accelerating manual and repetitive tasks such as writing emails or summarizing large documents, it can personalize experiences by creating content tailored to a specific audience, but it can also mimic writing styles or enable the creation of whole new material through an infinite loop of prompts. Much like a personal assistant scouring the internet to a random question for an entire day, but in a matter of seconds. What a time to be alive!
So why are people calling for caution? In its attempt to meet users’ requests for an answer, it can generate false or biased information while still being believable. Organizations need to weigh the current and emergent risks associated with using generative AI against the operational efficiencies gained from the new technology.
To maintain people-centric work designs and human-based organizations, it is critical that senior leaders across the organization are aligned about how people and AI
will work together – putting Human Resources at the center of this evolving technology and policies.
2. What should HR and other senior leaders consider?
HR understands the importance of keeping the human element oversight of this emerging technology and needs to have a clear role in the deployment of AI and AI tools in the workforce. AI can be extremely helpful in addressing critical workforce shortages as jobs can be redesigned to focus on the most critical skills needed while other tasks can be supplemented with AI technology. Enterprise technology and data leaders typically run the selection and tech/data governance around these tools, so HR will need to collaborate quickly to secure an early voice in both the deployment of these tools and questions around access and usage.
In the HR function itself, AI has the ability to transform the hiring process in terms of sourcing and assessing talent, answering repetitive questions, and playing a greater role in talent management decisions. However, inadvertent biases in the technology could result in wrongful decisions making it imperative to make sure risk coverages are in place.
3. Many opportunities, but what unique risks does AI present?
With generative AI’s rise come a number of questions for risk and insurance professionals and their organizations. What unique risks and opportunities does generative AI pose, if any at all? Why is there heightened attention around generative AI, when other forms of AI have been around for decades? What risks will insureds, brokers, and insurers need to navigate as generative AI evolves and interacts with other emerging technologies?
Some of the risks of AI are familiar such as data privacy and intellectual property infringement and may be covered under existing policies. However, there are emergent risks that may expose additional vulnerabilities and should be reviewed by risk professionals.
While headlines tout both generative AI’s extreme risks and opportunities, a balanced perspective is critical to making informed decisions and managing risks responsibly. To stay relevant and competitive, companies will need to learn how and when to leverage generative AI to optimally achieve objectives, such as realizing operational efficiencies, increasing customer satisfaction, and developing new products and services while, implementing appropriate governance and risk management protocols.
Resources:
Chief People Officer’s quick guide to generative artificial intelligence • https://www.mercer.com/en-us/insights/people-strategy/future-of-work/chief-people-officers-quick-guide-to-generative-artificial-intelligence/
Generative AI: Understanding the risks and opportunities • https://www.marsh.com/us/services/cyber-risk/insights/generative-ai-understanding-the-risks-and-opportunities.html
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