Harnessing the Power of Artificial Intelligence: How Businesses Can Benefit from AI While Mitigating Risk

What is Artificial Intelligence and why is it gaining momentum?

Artificial Intelligence (AI) has become a buzzword in the tech industry, and with the emergence of platforms similar to Chat GPT, AI is becoming more accessible to businesses of all sizes. These platforms are designed to mimic human conversations, making it possible for businesses to automate customer service, marketing, and even accounting. Platforms like Microsoft’s Azure AI, Google Cloud AI, Amazon’s AWS, and open-source AI like TensorFlow and PyTorch are revolutionizing the way businesses operate.

AI’s momentum stems from the availability of data and computing power, demand for automation and personalization, affordability of open-source tools, and growing interest and investment in AI research and development.

However, with all these tools gaining in popularity, there are concerns about how they treat sensitive or proprietary information and how data is collected and used.

How does AI work?

AI platforms are powered by deep learning, a subfield of machine learning that utilizes artificial neural networks to perform complex tasks. These platforms are trained on large datasets and can generate human-like responses based on the data they have learned. Chat GPT, for example, has been trained on a vast corpus of text, including books, articles, and online forums, making it possible for the platform to generate coherent and relevant responses to a wide range of queries.

What concerns are there with AI platforms?

One of the main concerns surrounding AI platforms is how they treat sensitive or proprietary information. While platforms such as Chat GPT are designed to provide personalized and relevant responses to users, they can also collect and process vast amounts of data. This data may include sensitive information such as customer names, contact details, and financial information. As such, businesses need to ensure that the platforms they use are compliant with data privacy regulations and that the data they collect is stored and processed securely.

To ensure the privacy of sensitive data, some AI platforms use techniques like end-to-end encryption and data anonymization. End-to-end encryption ensures that data is encrypted from the point of origin to the point of consumption, making it impossible for unauthorized users to access the data. On the other hand, data anonymization involves removing any identifying information from the data, making it impossible to link the data to a specific individual or organization.

How can AI help businesses?

AI platforms are helping businesses in a variety of ways, including:

  • Automating tasks – AI platforms can automate repetitive tasks, allowing employees to focus on more complex and valuable tasks.
  • Enhancing customer experience – AI-powered chatbots and virtual assistants can handle customer queries and provide personalized recommendations, improving customer experience and satisfaction.
  • Increasing efficiency – AI algorithms can analyze large amounts of data and identify patterns, allowing businesses to make better decisions and optimize their operations.
  • Improving marketing campaigns – AI platforms can analyze customer behavior and preferences, allowing businesses to create more targeted and effective marketing campaigns.
  • Predicting outcomes – AI algorithms can analyze past data and predict future outcomes, helping businesses make informed decisions and identify new opportunities.
  • Streamlining supply chain – AI can optimize supply chain management, reducing waste and improving delivery times.

Overall, AI platforms are helping businesses operate more efficiently, make better decisions, and enhance customer experience, ultimately leading to increased revenue and growth.

What are the risks of using AI in business?

AI platforms can certainly help businesses to identify potential tax savings opportunities and ensure compliance with tax regulations. But can AI replace people?

However, there are potential drawbacks to using AI platforms to handle tax and accounting information. One concern is the risk of errors or inaccuracies in automated processes, which could result in incorrect tax filings or financial statements.

You shouldn’t be afraid of AI platforms but be cautious. Ensure that the platforms you use are reliable and accurate, and that you fully understand any potential risks or drawbacks before implementation. With careful consideration and proper implementation, AI platforms can help businesses to improve efficiency, save time and resources, and ultimately, increase profitability.

As AI technology continues to evolve, it is likely that we will see more sophisticated platforms. It is essential for businesses to stay informed and adapt accordingly to remain competitive in the market. In accounting services, these platforms will offer more advanced features and capabilities, making it easier for businesses to manage their finances and comply with tax regulations. However, businesses must continue to prioritize data privacy and security, ensuring that the information collected and processed by these platforms is protected from unauthorized access or use. By doing so, businesses can reap the benefits of AI while minimizing the potential risks and drawbacks.

AI is still new and uncharted territory for businesses. While it has the potential to revolutionize business with interesting and impactful technology, there are imperfections that can be harmful to your business if improperly used. It will be important to remain informed. Reach out to your Rea advisor to learn how you can use AI for your business.

by Cody Kiser, CPA — New Philadelphia office