AI Transparency: A Challenge to Customer Trust
Speaking at JournalismAI Festival 2025 in London, Liz Lohn, the director of product and AI at Financial Times, highlighted an intriguing challenge in the application of AI – transparency and trust. According to Lohn, AI disclosure can inadvertently undermine the trust of users, even leading to subscription cancellations.
This issue is not exclusive to the Financial Times; businesses worldwide are grappling with the complexities of AI transparency. The Financial Times, having successfully navigated several technology transformations, provides an insightful case study for other businesses wrestling with similar issues.
Striking the Right Balance in AI Disclosure
Lohn emphasized the importance of careful AI disclosure. The question is whether it’s necessary to disclose AI involvement if human review has taken place. Adding a disclaimer about AI involvement can erode trust, even if the AI merely assisted in the process. The aim is to ensure that content, whether human-reviewed or entirely AI-generated, is trustworthy and of high quality.
The Paradox of AI Transparency and Ethics
Interestingly, the Financial Times’ experience contradicts the commonly held belief that transparency is key to building trust in AI. With the rapid rise in AI adoption, transparency has been championed as a cornerstone of AI ethics. The principle of ‘radical transparency’, popularised by Ray Dalio, founder of Bridgewater Associates, in 2017, suggests that sharing company information, data, and processes fosters trust.
However, as businesses strive to integrate AI into their everyday operations, the notion of transparency as the linchpin of trust may need re-evaluation.
AI Disclosure: A Threat to Trust?
A recent study titled “The Transparency Dilemma: How AI Disclosure Erodes Trust” by Schilke & Reimann lends weight to this counter-narrative. The study, involving 13 experiments with over 5,000 participants, revealed a hidden cost to AI transparency: it reduces legitimacy due to growing negative assumptions about AI use.
Co-author Oliver Shilke explains that transparency could backfire if it exposes aspects that reflect negatively on a business or individual. The gain in trust from transparency could be overshadowed by the penalty for the negative information revealed, creating a precarious trade-off.
AI Transparency: A Risk to Business?
Despite these findings, many businesses continue to advocate for full AI disclosure. CRM platform Zendesk’s European CTO, Mattias Goehler, argues that transparency is critical as businesses increasingly automate their customer services. According to Zendesk’s research, approximately 75% of all customer interactions are suitable for some form of AI automation.
However, transparency isn’t a silver bullet. Zendesk’s research indicates that 47% of customer service interactions could be classified as unsuccessful. There is significant room for improvement, and in this process lies the opportunity to build trust in AI-assisted methods.
Will AI Adoption Mitigate the Trust Penalty?
While it’s still uncertain if the trust penalty associated with AI transparency will diminish over time, one thing is clear: as AI becomes more reliable, disclosing its use may have less of a negative impact on trust.
The British Standards Institute’s (BSI) common standard (BS ISO/IEC 42001:2023) provides a framework for organisations to develop and operate AI ethically, transparently, and in alignment with regulatory standards. This not only helps manage AI-specific risks such as bias and lack of transparency but also contributes to building trust in AI.
However, to truly build trust, businesses must ensure both the integrity of AI and the transparency of the underlying data. This is where common standards can play a critical role. They can interrogate the trustworthiness of AI, ensuring it operates as intended, maintains data security, and adheres to ethical standards.
As AI continues to evolve and integrate into our everyday lives, the challenge for businesses remains striking the right balance between transparency and trust. The road to achieving this balance may be rocky, but it certainly is a journey worth undertaking.
Source: Here
