Some HR departments use AI algorithms to screen job applications Andriy Popov / Alamy Stock Photo

Businesses and other organisations could face multimillion-pound fines if they are unable to explain decisions made by artificial intelligence, under plans put forward by the UK’s data watchdog today.

The Information Commissioner’s Office (ICO) said its new guidance was vital because the UK is at a tipping point where many firms are using AI to inform decisions for the first time. This could include human resources departments using machine learning to shortlist job applicants based on analysis of their CVs. The regulator says it is the first in the world to put forward rules on explaining choices taken by AI.

About two-thirds of UK financial service companies are using AI to make decisions, including insurance firms to manage claims, and a survey shows that about half of the UK public are concerned about algorithms making decisions humans would usually explain. AI researchers are already being called on to do more to unpack the “black box” nature of how machine learning arrives at results.


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Simon McDougall of the ICO says: “This is purely about explainability. It does touch on the whole issue of black box explainability, but it’s really driving at what rights do people have to an explanation. How do you make an explanation about an AI decision transparent, fair, understandable and accountable to the individual?”

The guidance, which is out for consultation today, tells organisations how to communicate explanations to people in a form they will understand. Failure to do so could, in extreme cases, result in a fine of up to 4 per cent of a company’s global turnover, under the EU’s data protection law.

Not having enough money or time to explain AI decisions won’t be an acceptable excuse, says McDougall. “They have to be accountable for their actions. If they don’t have the resources to properly think through how they are going to use AI to make decisions, then they should be reflecting on whether they should be using it all.” He also hopes the step will result in firms that buy-in AI systems rather than building their own asking more questions of how they work.

Produced in conjunction with the Alan Turing Institute, the guidance is expected to take effect in 2020.

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We corrected the name of the institute involved in the guidance.