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Feeling overwhelmed by all the AI talk?
It’s understandable. Artificial Intelligence (AI) has exploded into discussions in nearly every industry and facet of life.
What is it? What does it do, exactly? How can it help? Is it safe? Will it take my job - or make my job easier?
These are questions we’re all trying to wrap our heads around as this rapidly expanding technology is poised to become an even bigger part of our day-to-day lives. Understanding and implementing AI can feel particularly daunting for professionals in the title and real estate sector because it introduces complex technology and potential risks that might impact your traditional workflows, data security and client interactions.
In this AI Part 1 blog, we’ll break down the basics of AI and how it can benefit your business. We’ll also dive deep into its potential risks to security and privacy so that you can be equipped with the knowledge you need to make informed decisions and stay competitive in the future AI-driven landscape.
What AI Is (And What It's Not)
Simply put, AI is a family of different technologies that enable machines to mimic human intelligence and perform tasks that typically require human-like intelligence, such as recognizing speech or language, understanding images, making decisions, and solving problems.
The concept of AI dates back to the 1950s when Alan Turing posed the question, 'Can machines think?' The term was coined by John McCarthy at the first-ever AI conference at Dartmouth College later that decade. Since then, it has evolved significantly, with notable milestones like IBM's Deep Blue defeating chess champion Garry Kasparov in 1997 and the rise of large language models such as OpenAI’s ChatGPT in recent years. This evolution has led to the development of AI tools that are more powerful, versatile and capable of handling complex tasks.
Before we get too deep into the weeds, it’s important to distinguish AI from two other terms it’s often lumped in or confused with: Automation and Machine Learning.
- Automation is the use of technology to perform tasks without human intervention, often for repetitive and routine processes.
- AI is a broader concept where machines simulate human intelligence, including learning, reasoning and self-correction.
- Machine Learning, a subset of AI, involves training algorithms for narrowly focused functions on limited sets of data. This training is often supervised and augmented by human intervention. Additionally, Machine Learning tools are designed to read input and select from a preset list of categories or responses. Examples are document classification, image identification, and traditional chatbots.
To illustrate the difference, consider keyboard shortcuts on your desktop that allow you to quickly copy and paste text—you set up a specific action, and it gets repeated every time you use the shortcut. That’s automation.
An example of AI, on the other hand, is when you use a virtual assistant like Siri or Alexa, which can understand and respond to voice commands. These AI-powered assistants use natural language processing (NLP) to interpret and perform tasks, such as setting reminders or controlling smart home devices, based on your voice instructions.
Machine learning can be exemplified by the recommendation systems on platforms like Netflix or Spotify. These systems analyze your viewing or listening history and behavior to suggest shows, movies, or songs you might enjoy. Over time, as they learn more about your preferences, their recommendations become increasingly accurate and personalized.
The Types of AI
AI can be broadly categorized into three primary types: Narrow AI, Strong AI, and Super AI. Narrow AI, or Weak AI, is designed to perform specific tasks under a limited set of constraints and cannot generalize beyond its training. This is the type of AI we are currently interacting with most frequently. So, don’t let the name fool you; this technology is still very intelligent.
However, Strong AI (Artificial General Intelligence) and Super AI (Artificial Superintelligence) are theoretical forms that would achieve or surpass human intelligence and capabilities in all aspects. We’re not there yet. (Thank goodness).
Generative AI is a subset of Narrow AI that can create new content. It works by learning from a large amount of data, such as text, images, or music, and then uses that knowledge to generate something new. This technology is behind tools like Microsoft’s CoPilot, ChatGPT, DALL-E, and Google’s Gemini. However, it has limitations, such as the potential to generate biased or inaccurate information. (More on that in a bit).
The Pros and Cons of AI
As with any powerful technology, AI has its own set of advantages and challenges. Understanding these is crucial for making informed decisions about integrating AI into your business.
Pros:
- Enhanced Efficiency: AI can automate repetitive tasks, leading to faster and more efficient processes and freeing employees to focus on more strategic activities.
- Improved Accuracy: AI tools that can process large amounts of data with high precision may be able to minimize human errors and ensure more accurate outcomes.
- Cost Savings: AI may lead to cost savings by automating routine tasks and improving efficiency. Businesses can boost their bottom line and achieve more with better-focused resources.
- Better Decision-Making: AI may help uncover patterns and insights in data that we might otherwise miss, giving us more informed decision-making and strategic planning abilities. This could mean identifying trends in property values or predicting market shifts to inform decisions.
- Enhanced Customer Service: AI-powered chatbots or virtual assistants can potentially respond instantly to customers 24/7 and extend the effective hours of your customer service team.
- Increased Creativity: No, AI tools can’t replace human creativity, but they might quickly assist in generating content or ideas, from drafting emails to brainstorming marketing ideas.
Cons:
- Bias and Discrimination: Unfortunately, AI systems are only as smart as the training data that powers them. This means they can inadvertently inherit biases that lead to unfair or discriminatory outcomes. This could affect decision-making in critical areas like hiring or lending, where biased AI can perpetuate existing inequalities.
- Misinformation and Inaccuracy: AI may also generate factually incorrect or misleading content. This is particularly concerning with generative AI, which can produce plausible sounding but false information (known as AI ‘hallucinations’).
- Privacy Concerns: AI systems perform best with the largest sets of your company data. This broad range of data access represents a risk of misuse or mishandling of this data.
- Plagiarism: Since these AI tools were trained upon information found on the Internet, there are concerns that AI-generated content may potentially duplicate existing works, which can be problematic when defining intellectual property or causing copyright issues.
Concerns and Risks
While AI's benefits look to be significant, it’s important to understand the critical need for responsible AI implementation. Understanding its challenges is crucial to safeguarding your business and ensuring that AI enhances, rather than undermines, your operational security.
According to Rick Diamond, Vice President and Agency I.T. Director of Fidelity National Financial, one major concern for real estate and title companies is the danger of deep fakes. AI can now create highly realistic but fake audio and video content, making it possible to fabricate conversations or convincingly impersonate individuals, opening the door for fraudulent transactions or identity theft.
Privacy breaches are another significant risk. AI can enhance a hacker’s ability to crack passwords by making educated guesses based on personal information scraped from social media and other sources.
The unintentional use of copyrighted material is also a legal minefield. AI tools that scrape data from the internet might incorporate copyrighted content without proper attribution, leading to potential copyright infringement issues.
Thankfully, companies can take several measures to safeguard against the risks associated with AI:
- First, training and awareness are crucial. Companies must educate their staff on the responsible use of AI and create clear rules and guardrails, ensuring everyone signs off on them.
- Develop an AI Use Policy. Clearly define how, when, and for what your employees can use AI. Establish, communicate, and enforce a strong policy around AI use in your organization. Also, carefully evaluate AI tools as you would any other software vendor.
- Engaging IT security professionals is also essential, as businesses need experts to detect, investigate and respond to AI-related security threats. “You need educated professionals to understand AI's role in security,” said Diamond.
- Another key step is implementing robust security measures. This includes ensuring your organization is using up to date security tools to protect against cyber threats and adopting proactive and adaptive security strategies.
- Additionally, companies must carefully review and verify AI outputs to ensure accuracy and prevent the spread of misinformation. “If you use generative AI for anything, check your work and really check it," stressed Diamond.
- And finally, never share sensitive data with AI systems. Furthermore, data privacy protocols must be strictly followed to prevent breaches.
The Bottom Line
Despite the risks, AI holds the potential to transform businesses when managed correctly. As Diamond shared, "AI is showing great promise for advancing the ability of our technology systems and processes, but as with all emerging technology, being cautious and implementing strong guardrails around it are of utmost importance." By implementing robust guidelines and ethical practices, title and settlement professionals can harness the power of AI while being careful to mitigate its downsides.
SoftPro is committed to leveraging AI responsibly and effectively to enhance our offerings while safeguarding the interests of our clients. In Part 2 of this series, we’ll explore specific examples of how AI can be used in your business to help you make the most out of these exciting new opportunities.
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