The University of Birmingham is carrying out research to explore the regulatory and ethical barriers that may impede the successful adoption of AI in UK professional services.
Although AI’s transformative impact was predicted over two decades ago, only recently has this appeared in practice. These innovations have yet to seriously disrupt markets, although the effects of commodification and unbundling of legal and accountancy services are being felt.
Algorithms applied to big data now drive much of the risk analysis underpinning insurance services and informing strategic corporate investments. Lawtech has demonstrated the power for AI to increase the speed and accuracy of legal work. In the global financial markets, machine learning and automation are having a positive impact in the detection of fraud.
These innovations are governed by professional and regulatory frameworks which remain relatively stable, but many predict that we are close to a critical tipping point given the enhanced global mobility of expertise created by AI. It is imperative that new regulations and ethical guidelines provide adequate consumer protection, while at the same time continuing to enable firms to innovate; indeed, in keeping with the AI and Data Economy strands of the UK government’s Industrial Strategy, our goal is to enhance opportunities for successful uptake of AI by UK businesses, non-governmental organisations (such as advice agencies) and beyond, while protecting the public interest.
Researchers in Birmingham Law School’s Centre for Professional Legal Education and Research, and Birmingham Business School’s Lloyds Banking Group Centre for Responsible Business are exploring these themes alongside a unique network of industry leaders, regulatory professionals and government representatives. Together, they are developing new strategies to overcome the barriers and risks presented by AI, to enhance the opportunities for its responsible use in the financial, insurance, legal, and accountancy sectors.
Professional services are major contributors to the UK economy and form a key foundation of the UK’s international competitive advantage; closer to home they are a key sector for inward investment, economic growth and increasing productivity in the West Midlands. Providers of expert services are essential to businesses and civil society, by strengthening the rule of law, the stability and integrity of the financial system, effective and lawful governance and decision-making of and by organisations, and as a means by which organisations and people may reduce their exposure to risk and provide protection from harm.
Researchers are combining their academic knowledge with the expertise of partners at KPMG, The Law Society of England & Wales, CILEx Regulation, Hyperscale Group Ltd., Innovate UK, the Departments for Business, Energy & Industrial Strategy and Digital, Culture, Media & Sport, Business Professional Services (BPS) Birmingham, amongst others, to map the keystone regulatory systems that drive and shape professional services delivery and innovation in the sectors.
Derek Southall, Founder and CEO of Hyperscale Group Ltd notes, “This is a vital piece of work which is perfectly timed. More has happened in this area in the last 4 years than the 20 before. The pace of change is increasing and so it is vital that we optimise our approach. The UK has one of the strongest professional services sectors in the world - we need to make it as easy as possible for businesses to leverage this technology whilst at the same time ensuring that appropriate ethical safeguards are in place”.
By identifying the implications of possible future scenarios in keystone regulatory system developments, the network will develop policy, regulatory and industry recommendations on how to overcome critical risks and obstacles, and seize the opportunities associated with AI.
Additionally, the project will act as proof of concept for a planned much larger research programme in the future and will test effectiveness of the foresight methodology in this interdisciplinary dynamic context.