Global small business platform Xero’s research reveals 80% of small business owners are concerned that AI development and adoption are outpacing regulation.
As generative AI tools become increasingly integrated across industries and workplaces, apprehensions regarding unchecked growth are on the rise.
Conducted as part of Xero’s Future Focus AI study, the survey involved over 3,000 small business owners from Australia, Canada, New Zealand, Singapore, the United Kingdom, and the United States. Notably, 41% of respondents identified sensitive information disclosure and data privacy violations as the leading ethical challenges tied to AI implementation in their businesses. This was closely followed by concerns about worker displacement, highlighted by 38% of participants.
The findings were revealed during Xerocon Sydney, a prominent event for cloud accounting leaders in the Asia Pacific region. The event showcased Xero’s approach to AI product development, introducing new AI-powered predictive features, including generative AI pilots and an AI guide tailored for accountants and bookkeepers.
Mark Rees, Chief Technology Officer at Xero, highlighted the need to provide more knowledge and tools to ensure small businesses can leverage AI without getting left behind.
While many small businesses are actively exploring AI solutions to stay ahead, 32% are not taking any proactive steps. To manage the risks associated with generative AI tools, businesses are implementing policies (26%), providing employee training (25%), and seeking client/customer consent (23%).
Despite these efforts, the survey indicates that some small businesses are entrusting AI tools with sensitive data, necessitating greater support in assessing security and privacy risks. More than half (51%) of respondents trust AI with identifiable customer information, while 45% trust it with sensitive commercial information.
The survey also sheds light on drawbacks faced by businesses using generative AI tools, including increased biases or inaccuracies (18%), decreased employee morale (18%), and efficiency loss due to quality control (16%). Furthermore, 14% of businesses using generative AI reported reduced headcounts.
While small businesses hold a mix of feelings about AI’s impact, with 32% intrigued, 31% anxious, and 30% excited, they lean toward optimism. Half of the respondents believe AI will be more helpful and positively impact their operations, while 20% express concerns about harm.
Looking forward, three-quarters of small businesses expect AI to influence their operations in the next five years, with 34% anticipating a significant impact. However, 24% remain uncertain about AI’s effects. While 59% believe AI won’t affect their hiring plans, 31% foresee hiring fewer due to AI.
Xero’s research also underlines that AI is not a top priority for the majority of small businesses in the near term. Concerns about growing revenue, attracting customers, and managing costs remain dominant. Only 8% ranked adopting or investing in AI as their top priority over the next 12 months.
Addressing the need for education and support, 43% of respondents felt that training on AI types and their impact is essential. To cater to these needs, Xero introduced the Future Focus: AI Guide for Accountants and Bookkeepers, aimed at aiding professionals in navigating AI’s impact on their practices and clients.
Mark Rees emphasized that the guide intends to provide well-informed choices for accountants and bookkeepers when employing AI tools to manage risks and reap benefits.
For more information, visit: www.xero.com.
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