While your organization may be committed to practising safe and responsible AI, what about your third-party partners?
From suppliers and contractors to vendors and service providers, every external entity that your business relies on could introduce AI-related risks into your operations.
Managing these risks is crucial to maintaining compliance and safeguarding your reputation.
Here’s how to approach third-party AI risk management and how Lean Compliance can support you along the way.
Understanding the Risks
Third-party AI risks arise when the AI systems, algorithms, or data used by external partners don’t meet your organization’s standards for safety, ethics, or regulatory compliance. These risks could manifest in several ways:
Data Privacy Violations: If partners don’t adequately secure personal or sensitive data, your organization could face compliance penalties.
Algorithmic Bias: AI models may unintentionally discriminate, leading to unfair outcomes and reputation damage.
Security Vulnerabilities: Weak AI security practices can make systems susceptible to malicious attacks.
Compliance Gaps: If third parties don’t adhere to the same legal standards, you may be held liable for their non-compliance.
Steps for Managing Third-Party AI Risks
Identify and Assess Third-Party AI Dependencies
Start by creating a comprehensive inventory of all third-party partners who use AI or provide AI-enabled services. Understand which business processes depend on their AI systems.
Evaluate each partner’s AI practices, focusing on areas like data security, algorithmic fairness, and compliance with regulatory standards.
Establish Clear AI Governance Standards
Develop governance policies that outline the minimum AI standards your third parties must meet. This includes ethical AI guidelines, data privacy requirements, and security protocols.
Incorporate these standards into contracts, making them a binding obligation for partners.
Conduct Regular AI Risk Audits
Periodically assess your third parties’ compliance with your AI standards. This can include requesting audit reports, conducting on-site evaluations, or leveraging AI assessment tools.
Ensure that your partners provide transparency regarding the data sources and algorithms used in their AI systems.
Implement Continuous Monitoring
Use AI-powered monitoring tools to track the performance and compliance of third-party AI systems in real time.
Set up alerts for any anomalies or deviations from expected AI behavior to catch potential risks early.
Provide Training and Support for Partners
Educate your partners about your AI standards and the importance of responsible AI practices. This could involve training sessions, workshops, or the sharing of best practices.
Encourage open dialogue with partners to continuously improve AI governance practices.
Next Steps
While it’s essential to practice responsible AI internally, managing third-party AI risk is equally important. By following a structured approach and partnering with Lean Compliance, you can better safeguard your business from the risks posed by external AI dependencies. Together, we can help you achieve a safer, more compliant AI ecosystem.
How Lean Compliance Can Help
At Lean Compliance, we specialize in helping organizations implement effective compliance strategies and programs supporting safety, security, sustainability, quality, ethics, legal, responsible and safe AI, and other sources of obligations.