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Generative AI is more than a trend – it is redefining how people do business, from marketing and sales, to finance, customer engagement and data analytics. However, the considerable breadth of applications for generative AI in business brings with it some significant pitfalls and risks.

Such a powerful and game-changing tool must be used responsibly to ensure it serves you and your customers appropriately, ethically and safely.

Here are some notable pitfalls of generative AI and how to manage them.

What is Generative AI?

Generative AI is an artificial intelligence system that can generate autonomous responses to queries or inputs. Based on machine learning algorithms, systems like OpenAI’s Chat GPT can produce anything from text and images to programming languages, effectively (but not always) mimicking human outputs.

It’s easy to see the benefits of such a powerful tool, and its numerous business applications are already impacting what we see in content creation, data analysis and decision-making.

What are the pitfalls of generative AI?

As big as the list of potential uses for generative AI is, the list of potential pitfalls is equally stacked if misused. When exploring generative AI applications, you must tread carefully and consider all possible implications of its use.

Relinquishing control

When handing over the operational or creative reins to an AI tool, you inevitably relinquish some degree of control over the output.

These systems work autonomously, which means there is a real risk of them generating content or making decisions that do not align with the values and goals of your business.

Unverified or incorrect information

Communication, content production and reporting are time-consuming tasks, and the potential for a trained AI to reduce some of this burden will be tantalising for many. But where does the information really come from?

For example, if you use ChatGPT to write a blog, how can you verify the information is correct? Most AI tools have a knowledge cut-off point, after which they may be unable to accurately generate the most up-to-date information.

There is, therefore, a risk of inadvertent misinformation coming from your brand if generative AI is used too freely without due diligence and careful fact-checking.

Ethical concerns

If you use AI tools to generate content and pass it off as human, there are obvious ethical issues here. This can be blogs, web pages, reports or even customer service communications. For example, if your customer is conversing with an AI, it is important that they are made aware of this and (ideally) are given the option to speak to a person if they wish.

Trust is key to positive long-term relationships with customers, clients and other stakeholders, so you must be open about who (or what) is communicating with them.

Security risks

As a new and rapidly developing technology, generative AI may be vulnerable to exploitation, posing significant security risks to businesses that use it without due care. Hackers may try to manipulate AI algorithms, for example, leading to the creation of malicious content or access to sensitive information.

How to tackle these challenges

Whether the benefits of generative AI sufficiently outweigh its risks is yet to be established fully, as the technology is both developing and being adopted at a staggering pace. However, businesses can adhere to some fundamental principles when using it to reduce these risks.

Establish clear ethical guidelines

Businesses using generative AI should establish clear ethical guidelines and enforce them strictly. This will help you ensure that your AI systems produce fact-checked content that aligns with the company’s brand and values and does not contain irrelevant or inappropriate material.

Deploy strict control mechanisms

Oversight over AI systems is essential. This means regularly auditing the output of your AI tools to ensure they meet the right standards. Human intervention and due diligence must always be factored into any project using these tools.

Striking a balance

As tempting as it may be to save time and resources by handing more and more responsibilities over to generative AI, a balance must be struck between human and AI contributions.

AI does not have the same grasp of nuance or complex topics as an experienced human expert, and the risk of misinformation and errors is much higher when it is given too much freedom.

Furthermore, while automation is beneficial, an overreliance on generative AI can be detrimental, too. It should never replace the core human skills of writing, reporting or data analysis because there will always be situations where AI can’t cut it!


Stay up to date

If you want generative AI to be a positive and sustainable part of your business strategy, it’s essential to stay in the loop with continuing technological advancements.

We recommend constantly evaluating and refining how you use it, incorporating feedback and collaborating with other businesses, developers and regulatory bodies to make sure generative AI use remains responsible and beneficial.



Alicia Williams

Alicia is Director of the Genus team at Shorts, a chartered certified accountant and Xero specialist.

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