Key highlights into engaging with Artificial Intelligence (AI): Taking a closer look at the risks and the opportunities that lie in waiting.
Artificial Intelligence (AI) is no longer a futuristic buzzword, it is here in our boardrooms, HR departments, finance teams, and customer service desks. From predictive hiring tools to AI-powered chatbots and automated credit scoring, companies in Kenya and across the globe are embracing machine learning to gain a competitive edge. But here’s the catch: using AI without proper legal and compliance safeguards can land your business in hot water.
"Artificial intelligence and generative AI may be the most important technology of any lifetime," says Marc Benioff of Salesforce
Why This Matters
AI thrives on data. For a corporate, that means client records, employee details, supplier contracts, financial information basically, sensitive personal and business data. Under Kenya’s Data Protection Act (2019), every company is a data controller or processor, with strict obligations to protect privacy. If your AI systems are making decisions about people : approving loans, screening CVs, setting insurance premiums, the regulators want to know: Was the data collected lawfully, with consent? Can the company explain how the algorithm reached its decision? Are there safeguards against bias, discrimination, or unfair outcomes?
Globally, regulators are ahead of the curve. The EU’s proposed AI Act labels credit scoring, recruitment algorithms, and biometric identification as “high-risk AI.” In the US, corporates have faced lawsuits over “algorithmic discrimination” in hiring. In Singapore, regulators introduced the FEAT framework: Fairness, Ethics, Accountability, and Transparency for AI in finance. Kenya will not be far behind.
Locally, the rise of digital lenders brought attention to AI-driven decision-making. Apps that scraped personal phone data for credit scoring triggered a regulatory crackdown, leading to CBK’s Digital Credit Providers Regulations (2022). Similarly, HR tech platforms in Nairobi are now experimenting with AI to shortlist candidates raising questions about fairness and transparency in hiring. Even large corporates are not immune. Think of telcos, insurers, and banks using machine learning for fraud detection or dynamic pricing. If a customer is denied a service or offered different terms because of an algorithm, the company must be ready to justify that decision both legally and ethically.
The Risks for Corporates
- Regulatory penalties for non-compliance with the Data Protection Act can attract fines of up to KSh 5 million or 1% of annual turnover.
- Reputation damage due to biased algorithms or unfair practices make headlines quickly and erode public trust.
- Investor & partner concerns since global investors and clients increasingly demand ESG-aligned and ethically governed AI practices.
The Opportunities
Handled correctly, AI compliance can be a differentiator. A company that says: “Our AI meets global standards of fairness and accountability” positions itself as forward-thinking, trustworthy, and investment-ready. UK corporates are required under GDPR to provide “explainability” for automated decisions. South Africa’s POPIA Act aligns closely with Kenya’s DPA and will shape AI governance in the region. Kenyan firms that adopt these global best practices early will stand out to both regulators and investors.
AI can turbocharge efficiency and innovation, but without compliance, it’s a ticking time bomb. Think of data governance and algorithm accountability as your corporate seatbelt: they don’t slow you down, they keep you safe as you accelerate growth. We help corporates, boards, and innovators navigate the complex intersection of AI, data privacy, governance, and accountability. Whether you’re deploying AI for customer analytics, HR, or financial services, we ensure your innovation is legally sound and regulator-ready. Talk to us today eddah@ekcadvocates.com
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