AI's moving faster than attempts to regulate it. Here’s how firms are coping.

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Companies are pressing ahead with building and deploying artificial intelligence applications, even as the regulatory landscape remains in flux. European lawmakers this month approved the world’s most comprehensive legislation yet on artificial intelligence, although other regions, including the U.S. and individual states, aren’t as far along.

Potential threats to customer privacy, the security of customer data, as well as the potential bias and inaccuracy of AI algorithms are all areas regulators are examining. “There’s a lot of unanswered questions," said Mastercard President and Chief Technology Officer Ed McLaughlin. “So you start having to build systems in anticipation of requirements that you don’t quite know what they are yet.

Companies are not waiting for regulatory bodies to determine how and when to use the technology. At the same time, chief information officers say they are combining best practices around customer data with a little guesswork to make AI applications regulatory friendly, while maintaining open dialogue with policymakers. Nationwide Mutual Insurance and Goldman Sachs are among the companies that have established their own internal guidelines and frameworks for how they use data and AI, in part by anticipating what ultimate regulations could look like.

Any future state-level AI regulation will likely mandate certain levels of transparency in terms of how customer data is used to fuel AI decision making, said Nationwide CTO Jim Fowler. Nationwide established a “red team, blue team approach," with the blue team exploring new AI opportunities and the red team considering where it should pull back due to concerns around cybersecurity, bias and ensuring it can meet government regulation. What came