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The Implications of AI on Data Privacy and Security

28th Nov 2023
Brought to you by
Dext logo

Dext provide digital tools that help accountants and bookkeepers like you to automatically and intelligently process and analyse financial data.

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Have you found this content useful? Use the button above to save it to your profile.

Artificial intelligence (AI) has made its way across every corner of the business world, fundamentally altering the way we work.

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For accountants, this revolution brings along a host of advantages, from automated reports to real-time financial analytics. The allure is unmistakable. However, when the conversation shifts to data privacy and security, enthusiasm often gives way to caution — particularly due to the highly sensitive nature of financial data.

But let’s set the record straight: AI, as a tool, is neither good nor bad — it’s the people and processes behind it that dictate its ethical and security stance. 

Want to find out more about AI in accounting? Register for our webinar series: Unlocking the Power of AI in Accounting

Why are there concerns over data privacy and security within the AI space?

Concerns over data privacy and security in the AI space stem from the technology’s need for large amounts of data, its potential for misuse and its evolving nature. That said, there are two major areas that accountants, and the business community at large, discuss most frequently: Ethical data handling and regulatory compliance. How come?

Because while financial data is an invaluable asset, it also comes with significant responsibilities. Although AI might be programmed to respect privacy and confidentiality, there’s a lingering apprehension. What happens if there’s a glitch, or worse, an oversight in this ethical programming? What are the fail-safes? How do we guarantee that AI won’t cross the boundaries we set for it?

Secondly, the need for real-time responsiveness to new legal frameworks and court rulings places an added layer of complexity on accountants. Different countries have different laws regarding data protection. How does this affect compliance, and what risks are introduced when data travels? We’ve got the Data Protection Act in the UK, GDPR in the EU, CCPA in California and more across the world. It’s an ever-changing landscape that demands ongoing adaptation.

But here’s the silver lining: Opting for a secure and credible AI tool can mitigate these concerns dramatically. From a compliance perspective, you can meet all your deadlines, drastically cut down the risk of errors and guarantee accurate tax payments.

What makes an AI tool secure?

People inherently trust their accountants — a profession that carries a commendable, serious connotation. That same level of trust should extend to the AI tools integrated into accounting practices.

To figure this out, you might start by considering:

  • ​​Cloud security: Opt for AI tools that leverage established cloud platforms, certified in ISO 27001, PCI DSS and SOC compliance
  • Physical security: Pay attention to data centre safeguards, such as vetted security guards and multi-layered fencing 
  • Network security: Ensure the presence of an in-house security team that responds promptly to security alerts. Also, look for AI tools that undergo regular third-party penetration tests to close any loopholes
  • DoS mitigation: Scrutinise the strategies and tools layered to fend off DDoS threats 
  • Access control: A least-privilege model is non-negotiable for limiting access. This should be audited regularly to ensure only authorised personnel have the necessary access
  • Encryption: Your data must be encrypted both in transit and at rest. Whether it’s moving or stored, robust encryption practices like TLS and AES-256 should be the standard
  • Availability and continuity: High availability, dynamic scaling and a rigorous disaster recovery plan are essential to maintain operations going smoothly in the case of a breach
  • Quality assurance (QA) and environment segregation: Ensure a robust QA team is in place, and customer data is strictly separated from testing and staging environments
  • Employee training: Opt for AI tools where employees are regularly updated on security best practices through ongoing training and development
  • Data privacy: The AI tool’s privacy policy should be comprehensive and clear. Moreover, third-party vendors should meet stringent security assessments

You might think this a lengthy checklist, but with new AI tools launching each week, the stakes are just too high to leave anything to chance. And it’s not solely the accountants who bear the weight of this responsibility; it falls on everyone from C-suite executives to IT professionals to ensure that the tools incorporated into the business infrastructure are beyond reproach.

Choose wisely, and you won’t have to choose between innovation and security — you can have both.

Why choose Dext?

If the conversation so far has you leaning into your screen, wondering where to find an AI tool that ticks all the boxes, Dext merits your attention. Unlike some options that offer broad solutions, often diluted across multiple industries, our products are crafted with the accounting profession in mind.

Dext Prepare revolutionises your workflow by automatically extracting your financial data with 99.99% accuracy

Dext Precision alerts you of any discrepancies and gives you insights you can trust

Dext Commerce streamlines your reconciliation by autonomously gathering your digital sales data, making a typically cumbersome task remarkably straightforward

We invite you to read our comprehensive privacy policy to better understand how we handle your data with the utmost integrity. And if you’re hungry for more AI-related insights, sign up for our upcoming webinar.

Sign up for our webinar series – Unlocking the Potential of AI in Accounting