At least 1 in 4 firms ban use of Gen AI over privacy and data security risks

More than one in four organisations have banned the use of generative artificial intelligence (Gen AI) due to privacy and data security risks, according to a new report released on Monday. The report, called "Cisco's 2024 Data Privacy Benchmark Study," surveyed 2,600 privacy and security professionals across 12 different regions. It found that most firms are limiting the use of Gen AI over concerns about data privacy and security, with 27% of organisations temporarily banning its use. The study, now in its seventh edition, highlights that privacy is not just a matter of regulatory compliance.

The report also revealed that organisations have several concerns regarding the use of Gen AI. The top concerns include threats to an organisation's legal and intellectual property rights (69%) and the risk of information disclosure to the public or competitors (68%). Despite these concerns, 91% of organisations acknowledge the need to do more to reassure their customers that their data is being used only for intended and legitimate purposes in AI. Interestingly, the study found that this trend is similar to last year's levels, suggesting that little progress has been made.

Dev Stahlkopf, Cisco's Chief Legal Officer, stated, "Organisations see Gen AI as a fundamentally different technology with unique challenges that must be addressed. More than 90% of respondents believe that Gen AI requires new techniques for managing data and risk. This is where thoughtful governance becomes crucial. Preserving customer trust depends on it.”

A Deloitte report published in January also expressed similar concerns about Gen AI. The report revealed that only a quarter of leaders believe their organisations are "highly" or "very highly" prepared to address governance and risk issues associated with Gen AI adoption. Additionally, only 47% agree that their organisations are adequately educating employees about the capabilities, benefits, and value of Gen AI. The report also highlighted that over half of the respondents are worried that the widespread use of Gen AI will exacerbate economic inequality (51%).

"We're in the early days of a major technological transformation with Gen AI beginning to drive a wave of innovation across industries," said Joe Ucuzoglu, Deloitte Global CEO, adding that business leaders are under an immense pressure to act, while ensuring appropriate governance and risk mitigation guardrails are in place."

A Gartner survey conducted in May 2023 also identified Generative AI as the second most frequently mentioned risk, with third-party viability taking the top spot.