AI Processing of Institutional Data

This question asks whether your software vendor uses artificial intelligence or machine learning to handle, analyze, or make decisions about your company's data. It's essentially asking: 'Are robots or algorithms touching our sensitive information?' This includes everything from chatbots reading customer emails to AI systems analyzing usage patterns or automating decisions based on your data.

Knowing if AI processes your data is critical for compliance and risk management. AI systems can introduce unique risks like data leakage, biased decisions, or unexpected data sharing with AI providers. If undisclosed AI processing occurs, you could face regulatory violations (especially under GDPR or CCPA), lose customer trust if sensitive data is mishandled, or experience competitive disadvantages if proprietary information feeds into shared AI models. Transparency here enables you to make informed decisions about data governance and vendor selection.

Many companies assume 'no AI' means no chatbots, missing that backend analytics, recommendation engines, or automated support tools often use AI. Another mistake is accepting vague answers like 'we use industry-standard AI' without understanding which specific AI services touch your data and how they're secured.