How regulated industries are thinking about AI implementation

The rise of generative AI in regulated sectors: Professionals in highly regulated industries are showing increasing interest in generative AI (GenAI) technology, recognizing its potential to revolutionize their work while remaining cautious about implementation.

• A survey by Thomson Reuters Institute revealed that nearly half of respondents in legal, tax and accounting, risk and fraud, and government sectors are “hopeful” or “excited” about implementing GenAI.
• Despite this optimism, widespread adoption in these sectors remains limited due to concerns about safety, security, and responsible use.
• The key issue holding back adoption is trust, with organizations needing assurance that GenAI can enhance their capabilities while maintaining the security of sensitive data.

Current adoption and future plans: While GenAI use is not yet widespread in regulated sectors, many organizations are considering or planning to incorporate the technology in the near future.

• Only 12% of regulated organizations are currently using GenAI across their business.
• 43% of organizations are either planning to incorporate GenAI or considering it for their business.
• Almost half of professionals plan to use GenAI in their own work within the next three years, regardless of their employers’ official adoption status.

Potential benefits and use cases: Leaders in regulated sectors recognize the numerous advantages GenAI could bring to their organizations, particularly in improving efficiency and productivity.

• GenAI tools like Thomson Reuters’ CoCounsel offer potential applications across various industries:
  • Law firms could use GenAI for document review, legal research, and drafting correspondence and briefs.
  • Tax firms could apply GenAI for accounting, tax research, and tax return preparation.
  • Corporate risk professionals could employ GenAI for knowledge management, risk assessment, and finance operations.
• Many professionals believe that failing to adopt GenAI quickly could result in underperformance against competitors or becoming obsolete in their industry.

Concerns and hesitations: Despite growing interest, many organizations in regulated sectors remain cautious about adopting GenAI due to various concerns.

• 45% of respondents report having no immediate plans to use GenAI.
• Primary concerns include:
  • The potential for inaccurate outputs or “hallucinations”
  • Unintentional distribution of misinformation
  • Uncertainty about delivering expected results in the near term
  • Over-reliance on the technology
  • Lack of human touch in GenAI tools
  • Potential job losses
  • Misuse by bad actors
• Data privacy and security are major concerns, particularly regarding the protection of proprietary and confidential information used to build large language models (LLMs).

The trust factor: The underlying issue surrounding GenAI adoption in regulated sectors is trust, with organizations seeking confidence in the technology’s reliability, accuracy, and data protection capabilities.

• Approximately three-quarters of professionals in regulated sectors, especially in the legal field, believe they can apply GenAI to their work.
• More than half believe the potential business impact of GenAI makes its adoption worthwhile, citing benefits such as cost savings, time for higher-order tasks, quality control assistance, and decision-making support.
• To address concerns, organizations need confidence that their GenAI platforms can:
  • Conduct research and analysis using LLMs built on trustworthy data
  • Keep confidential information secure
  • Integrate seamlessly into existing infrastructure and platforms

The importance of moving forward: While caution is necessary, failing to adapt to the shift towards GenAI may present greater risks than thoughtful adoption and experimentation.

• The most forward-thinking organizations are already planning and exploring GenAI applications.
• It is critical for organizations to trust their GenAI solutions to provide game-changing insights at scale while maintaining the necessary data protection for their sectors.
• Leaders in regulated sectors should not underestimate the transformative potential of GenAI and should consider exploring professional-grade solutions that address their specific needs and concerns.

Looking ahead: As GenAI continues to evolve, organizations in regulated sectors must balance caution with the need to stay competitive and innovative.

• The growing momentum behind GenAI adoption suggests that it will play an increasingly important role in professional services.
• Organizations that can successfully implement trustworthy, professional-grade GenAI solutions may gain a significant advantage in their respective industries.
• As the technology matures and regulatory frameworks evolve, we can expect to see more widespread adoption of GenAI in highly regulated sectors, potentially leading to significant transformations in how professional services are delivered.