Merging AI and Blockchain in Regulated Industries
In regulated industries, companies are often not allowed to use their own client or customer information to create data models, as this would violate various privacy regulations, such as HIPAA, or other policy compliance. These restrictions are also the key reason why this data has not been used outside these organizations, as this introduces too much risk.
… And that is where Blockchain comes in. With this technology, companies can create a tamper-proof and transparent ledger of their data and records. This enables those companies to securely share and access data for AI purposes without compromising compliance.
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Hear ELASTECH’s CEO, Armen Tatevosian, and EVP of Global Operations, Jim Zordani, discuss the business value drivers of Generative AI, in a conversation with a special focus on merging AI and Blockchain in regulated industries.
How Blockchain Complements AI
Blockchain has proven to be the optimal solution to address compliance risks associated with the use of AI. The technology is inherently immutable and decentralized. These characteristics make Blockchain ideal for protecting the integrity of sensitive data.
Furthermore, the decentralized nature of blockchain allows companies to extend the same features to 3rd party usage of data, whether those parties are partners, vendors, or customers.
One of the most significant points of consideration is the need to ‘lock down’ the initial load of data that is used to train the AI model. If companies do not ‘lock down’ the initial data load, they will never be able to understand or track how the model arrives at its recommendations and outcomes.
Beyond ensuring data integrity and compliance, merging AI and Blockchain offers additional benefits to regulated industries. For instance, the combination can enhance transparency in regulatory processes, enabling auditors and regulators to have real-time access to verified information. This level of transparency builds trust among stakeholders and promotes better collaboration between regulatory bodies and organizations.
Risks of Merging Blockchain and AI
While merging AI and Blockchain offers numerous advantages, there are a few things that executives should be aware of. Firstly, the complexity of implementation. Merging AI and Blockchain requires expertise in both domains.
Executives need to ensure they have the required skills and/or bandwidth on their team to effectively adopt and use these technologies. Blockchain, in particular, is an area that’s still very new for most companies and their IT teams. Hence, the number of people with the experience and expertise to execute development projects with confidence is very limited.
Another challenge is funding for these initiatives. Everybody wants to use AI for their business right now. As a result, an increasing number of projects are getting funded. However, that is not the case with Blockchain. Executives are often not aware of the business value of Blockchain, even if it is combined with AI.
A proven solution to ensure funding and stakeholder buy-in for Blockchain projects is to create a prototype, whether a PoC or an MVP. These prototypes demonstrate the technical feasibility and validate the features and capabilities. Such a prototype can also demonstrate how the data would be fed to the AI model.
Where Merging AI and Blockchain Delivers Real Business Value
Most companies in Healthcare, Finance, etc. are challenged by the conflict between using AI and adhering to compliance regulations. Merging AI and Blockchain is a proven approach that delivers a massive competitive advantage for organizations in these verticals, as demonstrated in real examples.
ELASTECH worked with a global healthcare company that provides treatment for dialysis patients. All the patient data gets sent to and collected in Europe to build and nurture an AI model that is used to monitor their systems. However, with this data, they could also build their own AI model for clinical use. So far, that is prohibited due to HIPPA. Now, they have implemented Blockchain technology. By storing each patient record on a ledger, they ensure data privacy and eliminate the risk of tampering, while the data itself can be used to train their AI. This is an example that is representative of many Healthcare organizations.
Another example is a major US bank that ELASTECH worked with. Amidst growing rates and decreasing loan volume, their priority was to streamline their lending process. We identified AI as the best solution to address this challenge. With AI solutions for lending, organizations can basically take any loan document—many pages and thousands of data points. The AI will chart it out, no matter what form the data originates from or what format it is in.
The challenge was that the bank did not want to let data outside its environment, as this would be a huge liability for them. If there are any breaches, credit scores, income, and other sensitive information from thousands of people would get into false hands.
We built a Blockchain PoC to demonstrate how they can create tamper-proof data in order to be securely used in an AI model.
Oil and Gas
While ELASTECH worked with a leading organization in Oil and Gas, this use case is specific to the whole industry. All of the major companies have graphical and seismic information that proves oil and gas reserves. Naturally, this is very closely guarded data. In the past, information on potential reserves was added as a note to a graph on paper each time a well was drilled. And because companies had to reflect the actual drilling, these papers could be as long as 12,000 feet. Huge volumes of documents are stored in the archives of these companies. Some of them have now been digitized, but even then, there are only videos or images that have historically been considered “unreadable” by computers. As a result, reviewing these documents required manual effort. This is where AI can add tremendous value, as it can effortlessly search images and videos, capture notes, and assign them to the correct depth based on their position on the graph.
However, the issue remains that Oil and Gas companies do not want the digital records of these documents to be handled outside their organization. Blockchain allows for accessibility, ensuring that the records cannot be stolen, copied, tampered with, etc. Merging Blockchain and AI enables organizations to access and read the data in a secure way, providing them with high-accuracy information about where they should drill.
The use of AI alone has proven to increase operational efficiency while reducing costs. Moreover, if companies continue to train their AI models, they will not only provide insights and predictions based on their data but will also validate these predictions. That is called ‘Actual Intelligence,’ and it will significantly accelerate and streamline a company’s decision-making process. By merging this technology with Blockchain, organizations ensure ‘locking down’ the right data and mitigate the risk associated with feeding sensitive information from their database to the AI, especially in regulated businesses.
Merging AI and Blockchain helps regulated businesses overcome massive industry challenges related to regulatory compliance. An application of AI and Blockchain enables readability (particularly important for images and videos) while securing the accessibility of the data. This provides organizations with a significant competitive edge.
ELASTECH is a leading provider of AI Development Services as well as Blockchain Consulting and Development Services. Whether you would like to learn more about these technologies or take a deeper dive into their practical applications, we can help! Our experts support leaders and their organizations in exploring and determining the best use cases to achieve critical benefits. Click below to schedule a free consultation with an expert.
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