The Untold Story of Data Governance and Compliance in AI

The Untold Story of Data Governance and Compliance in AI

Data Governance and Compliance in AI

You as an entrepreneur might be itching to implement some form of AI into workforce. But before you do, you must be wary about Data Governance & Compliance in AI. While you might be lured by the pull of everything AI, you can save a lot of reworks, rebuilding and most importantly, stay away from various legal litigations, if you are aware of Data Governance and Compliance in AI.

By the end of this blog, you’ll be glad you came across these 5 essential aspects. Data privacy and protection has become a top priority and for the right reasons. Why do we say so? Listen to this. In 2022, the average data breach costed an annual increase of 10%. This amounted to a staggering $4.35 million. I’m sure no business would ever want to incur even a fraction of that amount.

But what’s even more worrying is the fact that despite such huge financial losses, around 80% of the organizations still do not have a fully operational data governance program in place.

Think of data compliance as sunscreen for your business. Skip it, and you risk getting burned by legal consequences. As they say, an information leak each day keeps the clientele at bay.

And come to think of it, Data Governance is not just about preserving confidentiality and adhering to data protection acts. It is much more than that. You can unleash the true potential of generative AI by governing your data better. You can improve data quality, enhance data visibility, and ensure data reliability as you implement AI into your day-to-day operations.

What’s more? It is integral to risk mitigation and management. And in removing all the biases that may persist in the model.

This blog will help you understand what Data Governance and Compliance in AI is, What are the biggest challenges, Why is it essential, What are its benefits, and how do you implement it for your business. Let’s dive right in.

What is Data Governance and Compliance in AI?

Just before the launch of metaverse, Facebook faced one of the biggest data breaches in our recent digital life. Access to over millions of Facebook accounts were obtained by a certain individual without the permission of the users. Facebook consequently served the biggest setback, causing their stocks to plummet by 17% and stirred a public outcry along with a deduction of $100 billion from Facebook’s retail funding.

No one as a business owner ever want to face a crisis like this. While it may take years recovering from this instance, the brand image takes a permanent damage and there is no coming back from it.

Hence, Data Governance and Compliance has been topmost priority for some time now. But now with AI in the mix, business leaders are not sure exactly what to expect. And while the lure of AI is irresistible, a lack of awareness in AI compliance can leave you exasperated. And definitely, in deep trouble.

So, to start with, let’s understand What is Data Governance and Compliance in AI.

If you are using an AI-powered system, Data Governance & Compliance is a list of dos and don’ts to make your system compliant with all the applied laws and regulations. Data Governance & Compliance in AI makes sure that your AI-powered system are not breaching any protocols and the data that you use to train your models are collated legally and ethically. Democratizing AI for businesses has become mandatory.

Essentially, these are sets of rules, regulations, and guidelines your AI system is supposed to follow and adhere to. Without any bias and without manipulating users or invading their privacy.

Why Data Governance and Compliance in AI is essential?

AI compliance is super important for a few reasons. First off, it makes sure that when organizations use AI, they do it in a legal and ethical way. Sometimes, AI decisions can really affect people, so it’s crucial to follow the rules and laws.

Second, being AI-compliant helps organizations avoid getting into legal or money troubles. If an AI system doesn’t follow the rules, the organization might end up with fines or penalties.

Lastly, AI compliance protects privacy of the users. Since AI can handle a lot of personal info, it’s vital to use and collect it in the right way. Otherwise, organizations might end up with some big fines. And with institutions like GDPR and CCPA, ever more relevant, Data Governance and Compliance cannot be ignored at all costs.

Did you know, AI has not always been compliant in the past?

History stands proof. We have not always been compliant while implementing AI. Deepfakes, photo editing, and what not. Lowest of lows was when Amazon used an AI hiring tool that was biased against hiring women. The tool has been, since, discarded by Amazon but it goes to show that unregulated implementation of AI can lead to drastic consequences.

Principles on which Data Governance and Compliance in AI is based:

Data governance and compliance represent interconnected yet distinct facets of effective organizational data management. While data governance centers on the internal control and utilization of data, compliance is concerned with aligning practices with legal, regulatory, and industry standards governing data privacy.

Guiding an organization’s data-related actions, policies, and procedures are instrumental in ensuring the consistent, efficient, and secure management of data throughout its lifecycle. Recognizing the significance of data quality, which encompasses accuracy, completeness, and reliability, is paramount.

Equally critical is the practice of data classification, where sensitivity levels are assigned to various types of data based on their potential impact if compromised. This strategic classification aids in prioritizing protective measures and response mechanisms, enhancing overall data security.

The intricate relationship between data governance and compliance becomes particularly pronounced when viewed in tandem with data security. Data security involves safeguarding data against unauthorized access, use, disclosure, and destruction. As such, an integrated approach to data governance and compliance not only fosters adherence to regulations but also fortifies the organization’s defenses against potential threats, reinforcing the overall resilience of its data ecosystem.

Advantages of Data Governance and Compliance in AI

Implementing a robust data governance and compliance program is crucial in today’s landscape, offering substantial benefits to organizations facing escalating risks in data management. Some key advantages include:

1. Elevated Data Quality and Accuracy: Effective governance and compliance processes ensure data accuracy, completeness, and reliability, elevating the quality of decision-making.

2. Heightened Efficiency and Productivity: Streamlining data management processes minimizes redundancy, fosters efficiency, and boosts overall productivity.

3. Informed Decision-Making: Accurate and reliable data empowers organizations to make well-informed decisions, enhancing strategic planning and execution.

4. Mitigated Risks and Cost Savings: Proactive governance and compliance measures reduce the risk of data breaches, averting potential costs related to remediation, legal expenses, and business losses and stay immune to cybersecurity threats.

In essence, a proactive approach to data governance and compliance not only safeguards against risks but also becomes a catalyst for operational excellence, informed decision-making, and cost-effective data management.

How to implement Data Governance and Compliance in AI?

A step-by-step guide.

Step 1: The Compliance Crusade: Establishing Policies and Procedures

  • Develop clear roles and responsibilities for data governance and compliance.
  • Define guidelines for data classification and management.
  • Establish security protocols for data access and usage.
  • Implement procedures for data quality control and monitoring.
  • Set up a system for reporting and addressing data breaches and incidents.

Use Case

“A financial institution defines strict roles for data access, ensuring that only authorized personnel can handle sensitive financial information.”

Step 2: Discovering Your Data Diamond: Identifying Your Data Assets

  • Identify all data assets, including structured and unstructured data from internal and external sources.
  • Understand how data is used to pinpoint potential risks or compliance issues.

Use Case

“A healthcare provider catalogues patient records, ensuring compliance with privacy regulations and improving data accessibility for authorized medical staff.”

Step 3: The Risk Reduction Rumble: Identifying and Mitigating Risks

  • Evaluate data sensitivity and criticality.
  • Identify potential threats and vulnerabilities.
  • Assess legal and regulatory requirements for data management.
  • Determine the level of data protection required for compliance.

Use Case

“An e-commerce company assesses the risk of a potential data breach by regularly conducting vulnerability scans and complying with data protection regulations.”

Step 4: The Data Dictatorship: Designing a Governance Structure

  • Develop policies aligning with risk and compliance requirements.
  • Outline data category and handling guidelines.
  • Establish security protocols for data access and usage.
  • Define procedures for data quality control and monitoring.
  • Set up incident response and breach reporting protocols.

Use Case

“An energy company designs governance policies outlining strict safety protocols for handling critical infrastructure data.”

Step 5: The Technological Tango: Implementing Tools and Technologies

  • Train employees on data governance and compliance policies.
  • Conduct regular compliance audits and assessments.
  • Test incident response and breach reporting protocols.
  • Monitor and report on compliance performance metrics.

Use Case

“A technology firm conducts regular employee training sessions on data privacy and security, reinforced by simulated phishing attacks to test their response.”

Step 6: The Never-Ending Story: Continuously Improving Your Data Governance and Compliance Program

  • Regularly review and update policies and procedures.
  • Conduct ongoing compliance training for employees.
  • Stay informed about regulatory changes and industry trends.
  • Monitor and report on compliance performance metrics for continuous improvement.

Use Case
“A global retailer updates its data governance policies in response to changes in international privacy laws, ensuring continued compliance across its diverse markets.”


Taking data governance and compliance in AI seriously is not just a legal obligation but a strategic imperative for safeguarding valuable assets and maintaining trust in an increasingly data-centric world. In the ever-evolving landscape of technology, where the allure of AI innovation beckons entrepreneurs, the saga of data governance and compliance in AI unfolds as a crucial narrative. As we conclude this journey through the intricacies of safeguarding data integrity and navigating the compliance landscape, reflection becomes imperative.

The untold story of data governance and compliance in AI is one of foresight and responsibility. It is an acknowledgment that the power of AI, when harnessed without due diligence, can lead to catastrophic consequences. The fallout from data breaches, legal battles, and reputational damage serves as a stark reminder that the untamed potential of AI comes with equal measures of risk.

The real-world examples, the step-by-step guide, and the principles discussed unveil a roadmap—a roadmap not just for compliance but for leveraging the true potential of generative AI. It’s a journey toward elevated data quality, efficiency, informed decision-making, and risk mitigation.

As we look ahead, businesses stand at a crossroads. The path chosen—whether one of proactive governance, compliance adherence, and continuous improvement, or one of neglect—will determine not just legal standing but the trust bestowed upon them by clients and partners.

In the age where data is hailed as the new currency, the conclusion is clear: taking data governance and compliance in AI seriously is not merely a legal obligation. It is a strategic imperative, a commitment to ethical innovation, and a pledge to build a future where the power of AI is wielded responsibly, without compromising the trust that forms the bedrock of every successful enterprise.

So, as the narrative unfolds, let it be known that in embracing data governance and compliance in AI, businesses are not just adhering to laws—they are shaping a future where data integrity and ethical AI go hand in hand, creating a narrative of success, resilience, and trust.

Alok Chakraborty
Alok Chakraborty
With years of experience in the lifestyle, hospitality, and fashion industries, Alok has curated content for Forbes India, JW Marriott, Tech Mahindra, and the University of Berkeley. A die-hard Manchester United fan, an avid reader, and a crime-documentary binger, he merges his passion with his flair for writing. Alok pairs up his research with critical analysis.

Leave a Reply