Today’s email was crafted with the support of my friends Pete Thomas and Sal Lifrieri.
In the iconic 1966 Spaghetti Western film The Good, the Bad and the Ugly, Clint Eastwood’s character Blondie (The Good) partners up with Tuco (The Ugly) as they search for buried treasure during the American Civil War. However, they must contend with the dangerous Angel Eyes (The Bad) who also seeks the fortune. This classic showdown of opposing forces vying for the prize is an apt metaphor for examining the promise and perils of artificial intelligence (AI) in the security industry and real estate sector. Let’s explore the good, the bad, and the ugly when it comes to AI.
Table of Contents
The Good: AI’s Potential Benefits
Like Blondie’s quick draw and skill with a gun, AI offers many possible benefits that excite security professionals and real estate leaders about its potential. Its ability to rapidly analyze huge amounts of data promises to enhance:
- threat detection
- identity verification
- surveillance
- overall situational awareness
Facial recognition, gait analysis, automated alarms, drone patrols, and predictive analytics could drastically improve security operations while reducing manpower needs.
For real estate owners, AI tools offer the possibility of better-assessing property values, predicting rents, automating showings, improving energy efficiency, tailoring recommendations, and generally streamlining operations. The efficiency gains and cost savings appeal to boards and shareholders focused on the bottom line. When applied ethically, AI could help direct resources to where they’re needed most, keeping vulnerable communities safe without invasive monitoring.
Just as Blondie’s partnership with Tuco proved mutually beneficial early on, AI has the potential to collaborate with and augment human capabilities, rather than replace them outright. But good intentions sometimes go awry.
The Bad: Risks and Challenges
Like the ruthless bounty hunter Angel Eyes, AI has many risks and pitfalls that demand caution. AI-powered security tools often rely on collecting vast amounts of personal data, including faces, gaits, voices, and license plates. This data hunger makes them vulnerable to cyber-attacks and breaches that put people’s privacy at risk. The data may inherently compromise privacy if proper safeguards aren’t in place.
AI systems can also entrench societal biases and unfairly target specific groups. Justice by algorithm is still imperfect. Facial recognition struggles with accurately identifying women and people of color. Real estate algorithms risk perpetuating historical biases in rent prices, property valuations, and accessibility.
Transparency remains a significant challenge. The inner workings of AI systems are often opaque, with training data and programming code held secret. This lack of explainability makes AI decisions challenging to understand, audit, and dispute. Rogue “black box” AI could wreak havoc before anyone detects the problem.
AI also raises complex legal and ethical dilemmas regarding surveillance, consent, and evidence. Is pervasive tracking or facial recognition consistent with civil liberties? How will AI-gathered data be used and shared? Can it withstand legal scrutiny? The risks only multiply as the technology advances.
These AI perils pose major liability concerns for directors and officers of real estate firms. Failure to address biased algorithms or lax data practices could spark lawsuits and regulatory action as stewards of the business, directors and officers face heightened accountability for ensuring AI’s responsible and ethical use. This need to address algorithmic bias extends to supply chain oversight for any third-party AI vendors. Boards should ensure that they are appropriately knowledgeable and ask their executives the right questions. Rushing into AI without assessing the bad alongside the good invites trouble.
The Ugly: Navigating the Trade-Offs
Tuco’s ugly demeanor and blunt style often proved divisive but occasionally effective. Likewise, AI forces difficult trade-offs between worthwhile ends and messy means. Security teams must weigh public safety against individual privacy. What surveillance overreach will the public accept in the name of preventing attacks? Finding the right balance requires nuance and transparency.
AI is supercharging the security industry’s existing struggle with ethics. Leaders must recognize that state-of-the-art algorithms still make mistakes and incorporate biases. Responsible use means thoughtful oversight, comprehensive training, and diversity among developers. It also means establishing accountability protocols and secure data practices.
These tensions are integral, not temporary. Like Tuco’s partnership with Blondie, AI demands constant reassessment as contexts shift. Responsible implementation will likely mean scaling back the most invasive and risky applications until assurances are in place.
For real estate leaders, it means asking tough questions about how AI will impact tenants, buyers, and the community. Are algorithms determining opportunity? Do new systems save costs at the expense of jobs? Is transparency sufficient and consent meaningful? The ugly truth is that AI risks compounding historic disadvantages if deployed without care.
High Noon Showdown
In the film’s final graveyard showdown, Blondie outsmarts Angel Eyes and Tuco to claim the treasure. However, there is no lone AI sheriff that will ride in to single-handedly mitigate and reduce the risks. Responsible AI will take collective diligence from security teams, real estate boards, developers, vendors, and the public.
It will require acknowledging brutal truths, assessing trade-offs, and creating robust protections. Like Blondie cooperating with Tuco and confronting Angel Eyes, organizations must partner with AI where applicable while supporting strong regulations and oversight.
The implications of AI advancements for insurance companies are multifaceted. On one hand, AI can significantly enhance risk assessment, fraud detection, and claims processing efficiency. By analyzing vast datasets, AI algorithms can identify patterns and anomalies more accurately, leading to more precise underwriting and fraud prevention strategies. On the other hand, AI introduces new risks such as cybersecurity vulnerabilities and ethical concerns regarding data privacy and algorithmic bias. Insurance companies must navigate these challenges carefully, ensuring robust data protection measures and ethical AI use. Furthermore, as AI transforms industries like real estate and security, insurance products and services must evolve to address these changing risk landscapes.
The treasure of AI’s benefits is enticingly close but not yet safely in hand. We can claim the prize by taking measured steps together while keeping the ugly at bay. As with any new frontier, progress will require being good, discerning the bad, and navigating the ugly with eyes wide open. The future remains unwritten but insight from the past can guide the way.
Please reach out if you want to discuss how AI is impacting the real estate sector, security concerns, and Insurance in general. You can book time here.
Kaenan is a professional in the areas of block chain, telematics, wearables, analytics, artificial intelligence (AI) and Insurtech. He has played a key role in innovating many start-ups and established carriers. His advice has been widely appreciated in the financial community, which resulted in multiple quotes and publications in various media.
Most recently he was Practice Lead for Innovation, Fintech, and Strategic Insights at EY. Throughout his career he has held leading roles within Marketing Strategy and Decision Management with top Insurance, Banking and Finance companies, including USAA, Citibank and Sallie Mae.