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Artificial intelligence helping start-ups redefine business processes

By Omoruyi Edoigiawerie, Esq
Technology is a fundamental driver of change in today’s society. One term that appears to be susceptible to diverse interpretations and is often misunderstood is Artificial Intelligence (AI).

No matter how misunderstood it is, Artificial Intelligence has grown to become one of the most pivotal tools for business growth and scalability. It provides practical tools and solutions that start-up founders can leverage on without the need for specialist technical knowledge.

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Most start-ups will find that adopting AI tools to augment their business processes will add immense value to their businesses and help customer retention through an improved value propositioning made possible by enhanced operational efficiency and quick output.

While AI in itself cannot be said to be new, having existed in some form for a while, its scope and application have expanded in recent years due to an increase in computing power, improved algorithms, and the accessibility of large volumes of data.

Artificial Intelligence defined
Artificial intelligence” is a broad term that refers to any type of computer software that engages in human-like activities – including learning, planning, and problem-solving. Artificial Intelligence can simulate human intelligence to:

•Analyse data to reach conclusions about it, find patterns and predict future behaviour.
• Learn from data and adapt to perform certain tasks better over time.

One of the most prominent aspects of artificial intelligence especially as it relates to business management and scalability is Machine Learning. Machine learning is primarily used to process large amounts of data quickly. Machine learning is useful for putting vast troves of data – increasingly captured by connected devices and the Internet of Things – into a digestible context for human understanding.

AI start-ups and business realities
I have always maintained that Artificial Intelligence cannot replace human intelligence but rather will complement and improve human output whether in business or any sphere of human work. Artificial intelligence is therefore a supporting tool.

Common Business processes that can leverage AI
Some of the most standard uses of AI are machine learning, cybersecurity, customer relationship management, internet searches, and virtual personal assistants.

a) Machine learning
Machine learning is used often in systems that capture vast amounts of data. Once captured these troves of data are then contextualized by machine-learning algorithms and in turn, help the company understand the use of its products and services as well as improvement points.

b) Cybersecurity
Artificial intelligence is an indispensable ally in the quest for adequate cybersecurity. Artificial Intelligence helps recognize cyberattacks and cyber threats, by monitoring patterns from data input. Once it detects a threat, it also relies on backtracked data to find the source and put measures in place to prevent a future threat.

c) Customer Relationship Management
Artificial intelligence is also changing Customer Relationship Management (CRM) systems and how businesses relate with their customers. Through CRM software, customer relations, interactions, and marketing are adequately tracked and improved.

Artificial Intelligence transforms a Company’s normal CRM system into a self-updating, auto-correcting system that stays on top of the company’s business relationship.

d) Internet and Data Research
Artificial intelligence uses a vast amount of data to identify patterns in people’s search behaviour and provides them with more relevant information regarding their circumstances. As people use their devices more, and as technology becomes even more advanced, users will have a more customizable experience.

The world is fast shifting from the search engine method to a system where the right information finds the right user at the right time.

e) Digital Virtual assistants
Artificial intelligence is not only available to create a more customized experience for customers or clientele but also the founders or owners of the business. It transforms the way the company operates internally. Through Artificial Intelligence bots, companies deploy online tools which can be used as personal assistants to help manage business interactions while also helping streamline business processes. This is perhaps one of the most important benefits of AI for startup owners who often start learn and rely more on technology in the formative years of the business due to funding limitations. Today, many businesses have online systems in place that program AI assistants to attend to customers online through chat boxes and FAQ portals.

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Legal and ethical considerations
Artificial Intelligence is indeed very useful and its importance unimpeachable, especially as it relates to the growth of budding businesses. However, AI is also not without its disadvantages, especially in the areas of data protection, human rights, and Intellectual property use.

There are several security risks that companies should be aware of when using artificial intelligence or machine learning-based systems to enhance business operations.

Third-party attacks pose one of the most serious problems that plague the use of AI by businesses. These attacks can both target the large amounts of data companies are processing which may be personal and sensitive and other attacks can target the resulting analysis and predictions thereby creating false and misleading outcomes. One reason for the above safety concern is that many AI models that companies use for specific analysis are “pre-trained”, and how that has been done is easily learned by third parties, and thus potentially more at risk of attack or manipulation.

Companies without solid policies and processes around data management can also be at risk of unauthorized access or theft of the data, or, even before the data is collected, there may be legal noncompliance if users are not accurately informed about how their data may be used.

Although AI systems are considered smart with a very low margin for error, the truth remains that it deals with data made available to them as is and this means the ability to exercise human emotional intelligence is non-existent. The implication of this is that there is often a ‘Garbage in, Garbage out’ result.

Additionally, inputted data could have errors or be placed based on selected biased data sets in the first place which in turn can affect the result. These faulty results if not adequately managed can affect the rights of those whose data it analyses and in turn may create a legal burden for the companies that deploy them.

Artificial Intelligence and Data Protection in Nigeria
Perhaps one of the most important legal considerations when talking of AI is data privacy and protection.

How do we bridge the gap between intelligent marketing and communication and invading the private space of the public?
To evaluate the effect of AI on privacy, it is necessary to distinguish between data issues that are endemic to all AI, like the incidence of false positives and negatives or overfitting to patterns, and those that are specific to the use of personal information.

In Nigeria, data protection is a constitutional right founded on section 37 of the Constitution of Nigeria. The most comprehensive statutory instrument for data protection in Nigeria is the NITDA Act. The NITDA Act empowers the National Information and Technology Agency (NITDA) to issue guidelines to cater to electronic governance and monitor the use of electronic data exchange. Flowing from this, NITDA issued the Nigeria Data Protection Regulation 2019. The NDPR explicated the concept of data protection under the Constitution and makes provisions for the rights of data subjects, the obligations of data controllers and data processors, and the transfer of data to a foreign territory among others.

In Nigeria, the data protection laws and regulations apply to anyone or entity that collects, stores, uses, or shares the data of individuals or consumers and the NDPR is therefore applicable to all transactions intended for the processing of personal data, and to the processing of personal data notwithstanding how the data processing is being conducted or intended to be conducted in respect of natural persons in Nigeria.

Drawing from international best practice, the NDPR imposes an obligation on persons involved in data processing or control of data to develop security measures to protect data including safeguards against hackers, setting up firewalls, employing data encryption technologies, and similar approaches. It also provides that data processing by third parties should be governed by written contracts between such third parties and the Data Controller.

Perhaps most significant of the regulation is the obligation on businesses to ensure that all media through which Personal Data is being collected must display in a simple, conspicuous and understandable manner, their applicable privacy policy. Some essential inclusions in every privacy policy include:

•What represents consent for the data subject;

• Description of personal information that is collectible;

• Purpose of the collection;

• Technical methods deployed to source and store personal information, cookies, web tokens, etc.;

• Principles governing data processing;

• Remedies in the event of a breach of the privacy policy;

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Conclusion

Without question, artificial intelligence has come to stay, companies that want to scale and compete globally must leverage it if they are not to be “run out of town”. Data is also the new oil, everyday businesses mine data and start-ups in Nigeria are not an exception to this growing statistic. However, businesses must comply with the data protection regulation in Nigeria.

Artificial intelligence must be deployed with the knowledge that it is a complementary tool for business growth and not a replacement for the human emotive contribution to business growth and development. With this in mind, businesses will be able to apply Artificial intelligence appropriately in a manner that does not expose them to legal liability or regulatory sanctions.

 

Omoruyi Edoigiawerie is the Founder and Lead Partner at Edoigiawerie & Company LP, a full-service law firm offering bespoke legal services with a focus on start-ups, established businesses, and upscale private clients in Nigeria. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. His firm can be reached by email at [email protected]

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