Does AI Need to Be Regulated?

Regulation of AI plays an important role in providing guidance for how these technologies are developed and used. AI can offer efficiency and innovation opportunities, such as automating routine tasks in legal, financial, and healthcare sectors, but it also introduces potential challenges. These may include issues around bias, privacy, or the safe deployment of AI in sensitive areas.

Regulatory frameworks aim to provide clarity for organisations, setting expectations for transparency, accountability, human oversight, and data protection. High-risk applications like biometric identification, credit scoring, and employment decisions are often subject to stricter requirements to help ensure fairness and reliability.

Around the world, governments and international bodies are developing regulations to address these challenges while supporting responsible innovation. The EU’s AI Act, for instance, establishes a risk-based framework, while countries including Peru, the UK, and the US are introducing rules tailored to their local legal and social contexts.

The EU’s AI Act, for instance, establishes a risk-based framework that classifies AI systems according to the level of risk they pose, from minimal to unacceptable, with corresponding compliance obligations. High-risk systems, such as those used in recruitment, healthcare, or law enforcement, will be subject to strict requirements around transparency, human oversight, and data quality. The Act also introduces penalties for non-compliance, making it clear that organisations must take governance seriously. 

As regulations continue to develop, organisations must actively implement compliance measures that not only meet current legal requirements but also address ethical risks such as bias, accountability, and transparency. Taking a structured, proactive approach now will make it easier to adapt to future regulatory changes and demonstrate responsible use of AI to clients, regulators, and stakeholders.