What Business Owners Need to Know About AI Data and Confidentiality


The release of ChatGPT in late 2022 created an explosion around the world of AI that was soon followed by another blow: potential concerns surrounding data privacy. Although the initial breach was minor in nature, it pointed out how quickly data privacy can be brought into question with the implementation of artificial intelligence and machine learning. 

Machine learning and AI are nothing new—Google and other search engines have been using them for years. The tools available today utilize a lot of data to provide customized results. The more data, the more effective the results. Unfortunately, more opportunities for AI also means more opportunities for privacy concerns. 

As a business owner, it’s essential that you keep up with the latest news and insights surrounding AI and the tools that you use. This will ensure that you’re maximizing privacy and security while delivering the best solutions for your customers and your employees alike. 

Here’s what you need to know. 

Data privacy: A quick recap 

Data privacy is the protection of any personal information or private business information from unauthorized disclosure, misuse, or access. It’s as simple as the “Accept All” cookies button on every website and as complex as the huge database of customer information that you have that you may or may not be interested in sharing. 

Personal data includes any information that can directly or indirectly identify someone, including demographics, names, contact information, political opinions, pseudonyms, and so forth. Protecting that data requires a system that can withstand attacks and unexpected changes in the environment, maintain functions during these changes, and deliver the data-driven insights that your business needs. 

AI is making it even more complicated to protect the infinitely valuable resource that is personal data. Fortunately, regulating authorities and governments are calling for better accountability. 

Governments are calling for regulation and accountability 

Until recent times, most companies had little reason to put a priority on data privacy and protecting personal information. Even in the worst cases, consequences so far have been negligible in the bigger picture. However, that’s about to change. Italy was the first to step up against ChatGPT, banning the tool in March 2023 after stating concerns that the data collected and used to train the AI tool would be at risk of privacy breaches. 

OpenAI, the creator of ChatGPT, decided to agree to the regulatory demands being placed and Italy reversed the ban. However, that’s just the first in what’s likely to be a long list of entities seeking better accountability and regulation for AI. 

Right now, there isn’t really anything in place for regulatory compliance at a federal level in the U.S. States have their own regulations and there is little federal oversight. However, as AI and personal data collection become more popular, the development of regulations regarding the use and security of AI is becoming more important at the federal level. 

Responsible and Ethical AI 

Industry leaders are calling on others for a “responsible and ethical” implementation of AI in order to create a system that works without bias and that puts privacy first. It’s a very fine line to balance in using all the customer data that you accumulate without overstepping and infringing on someone’s privacy. The businesses that figure out that balance will be the most successful. 

How can you do this? Here are a few tips:

  • Embed privacy from the start 
  • Be proactive about data privacy, not reactive
  • Make privacy a default 
  • Provide end-to-end security 
  • Never sacrifice functionality
  • Maintain transparency
  • Keep your security user-focused 

Imagine you’re a visitor to your company’s website – how would you want your personal information to be treated? That’s exactly what you should be doing for your customers. 

Can you have privacy and personalization?

Some people argue that the privacy concerns of customer data are tied directly to the personalization that today’s users demand. That is a valid concern, but it’s one that can be addressed by each business with a simple test. Ask yourself:

  • What information are you using? 
  • Who are you sharing it with? 
  • Why are you using it? 

If you’re sharing a customer’s marketing preferences with your internal team to update your communication database, you can absolutely have privacy and personalization. If you’re using tools that are secure to store and share data, privacy shouldn’t be a concern. 

If you’re gathering useless or irrelevant information, or if you are using data that you’ve collected for any kind of black hat (read: bad) marketing tactics, you’re doing it wrong. Make sure that you use secure tools and only share information that’s necessary, relevant, and legally shareable. 

It gets more difficult when you get into industries like healthcare and others where sensitive or important information (such as Social Security numbers) can be shared and stored virtually, but there are also higher security standards in place in those industries as a result. 

Privacy by design 

Organizations are advised to adopt a privacy-first mentality in their efforts. This includes choosing the AI that you use and which tools you select to secure customer data. Be intentional about your data privacy and watch as it all falls into place. 

People are more distrustful than ever. Those who adopt solid data privacy practices early will be the ones to gain a competitive advantage. If AI is on your radar (and it should be), privacy should also be first on your mind. 

Partner with Smith.ai for trusted support and more

While you’re managing all that customer data and taking care of business, who’s helping you field all the incoming leads? Outsourcing to an experienced team like the virtual receptionists at Smith.ai will give you all the support you need. We take privacy seriously and use the latest in security and encryption in all of our tools and software. 

Plus, while you’re embracing the world of AI, we can handle your lead intake and appointment scheduling. We can even serve as your 24/7 answering service so that you never miss an opportunity. 

To learn more, schedule a consultation or reach out to hello@smith.ai. 


Written by Samir Sampat

Samir Sampat is a Marketing Manager with Smith.ai. He has experience working with businesses of all sizes focusing on marketing, communications, and business development.

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