What Malaysian marketers need to know as AI regulations shape up

Malaysia has been on a journey to become one of the top 20 AI nations globally. Last month, prime minister Anwar Ibrahim called on researchers, developers and decision-makers to support and play a role in achieving this aspiration. However, the country continues to grapple with challenges and opportunities presented by rapidly evolving AI technologies. 

Although AI regulations are still in development, the Malaysian communications and multimedia commission (MCMC) have been actively engaging with social media giants to address pressing concerns around AI and deepfake technologies. 

For marketing professionals, these developments highlight a critical period of transition and adaptation. As the regulatory landscape begins to take shape, businesses must prepare for anticipated changes.

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According to Jan Wong, founder of OpenMinds, said there are a number of things marketing professionals should be preparing for in anticipation of new AI regulations, starting with stricter data privacy and protection standards. 

With stricter data privacy and protection standards in place, marketing purposes will be subject to more rigorous scrutiny and compliance requirements. There will likely be greater emphasis on not data collection and how data is stored, processed and utilised for marketing purposes. "This means businesses will need to reconsider what data is beneficial and valuable, and how data is utilised in their organisations, considering to what degree hyper-personalisation and consumer profiling are needed," said Wong. 

Regulations also call for greater transparency. This means businesses can no longer mask the use of AI by saying it is 'human-delivered' as well as generate content, promote any form of bias in hiring or provide product recommendations without a clear disclaimer. 

Businesses that invest in AI technology will also need to make sure they have the right environment in place for the proper use of AI. "This includes the need to establish clear ethical guidelines for AI usage, display the appropriate disclaimers, obtain and secure informed consents, and even proactively ensure the team is diverse enough to have sufficient diverse input in training the AI’s knowledge to reduce decision bias," said Wong. 

Wong added that marketing professionals should prepare the right tools that adhere to the required regulations too. "Businesses will need to ensure that the tool will not only enable them to perform but also adhere to the regulatory requirements and can be audited, if necessary," said Wong.  As such, this could lead to an influx of new tools and technologies that are compliant, allowing businesses and marketing firms to weed out questionable tools that may be using the data collected for ulterior purposes, he explained.

Cindy Eliza Vaz, chief digital officer of IPG Mediabrands shared that marketing professionals should also stay informed about potential regulatory changes in areas such as data privacy, algorithmic transparency and ethical AI usage. 

"Compliance with existing laws, such as Malaysia's PDPA, is crucial, especially given the increase in public domain content generated by technologies such as generative AI. It's also important to anticipate stricter rules on data handling, consent, trademarking, and plagiarism as AI evolves," said Vaz.

"Establishing robust internal AI governance, collaborating closely with legal and tech teams, and investing in training and upskilling are vital steps to ensure all team members understand the new regulatory requirements," she added.

Additionally, the risk management industry is expected to expand to address these emerging challenges, underscoring the need for proactive planning and risk assessment in AI-driven marketing strategies, said Vaz. 

Challenges and opportunities 

According to Vaz, marketers will need to learn fast on how to navigate complex compliance requirements, manage stricter data privacy and handling rules, and face increased operational costs due to the need for new technologies and expertise. This is especially in the current work force capabilities.

However, these regulations offer significant opportunities primarily in the space of innovation by not just developing new and AI compliant tools and services, but also enhance existing offering with AI based capabilities, added Vaz. 

Wong agrees that cost would be a challenge for businesses and marketing firms. "Either in acquiring new tools, replacing existing tools with compliant ones, or hiring a team that is familiar with setting up the necessary structures to navigate the requirements, there will be cost spent," said Wong.

Depending on the scale of implementation, the process may also pose a challenge as it can be complex, especially when dealing with data privacy. To that point, Wong said: 

As such, smaller firms might find the financial and logistical burdens of compliance particularly challenging, potentially slowing down their AI adoption rates.

He added that such complex processes could also limit the types of data that can be used and how AI can interact with consumers, potentially stifling innovation such as limiting the extent of personalised marketing capabilities.  However, as consumers are becoming more aware of AI, its usage and demand for better transparency and ethical usage can create an opportunity for businesses too. 

"For AI tech companies, there's a potential market for developing new AI tools that help other businesses comply with AI regulations. This could include software that automates compliance checks or privacy management systems. For consumer businesses, firms that effectively integrate ethical AI practices can differentiate themselves in the market. Compliance with regulations can be marketed as a key feature of their service, appealing to privacy-conscious consumers," he said. 

Implementing AI ethically

When it comes to implementing AI ethically, Wong only has three words: framework, education and communication. "Businesses must start looking into the development of a framework for their organisation to guide the various uses and activities of AI," said Wong. 

This framework, according to Wong, should consist of a disclosure of how AI models function and are applied in operations and how robust standards of data privacy and security are being upheld. 

The framework must also define roles and responsibilities within the organisation for managing AI ethics as well as the ethical development practices that provide guidelines on how AI should be used, developed and processed. This is so businesses and marketers can mitigate biases during the various implementation phases. 

As AI is also relatively new, it is important for businesses to actively educate and communicate with the stakeholders, employees and consumers. "The organisation should be well informed of any technological or regulatory change, and the consumers should also be promptly notified if their data would be used differently due to the change," said Wong. 

In addition, Wong is of the opinion that education ensures that everyone understands the importance of ethics in AI operations and to practice public transparency where consumers are aware of how their data is being used, adding that: 

The key to education is to be agile and transparent, to raise awareness about the organisation’s ethical AI commitments and practices among all stakeholders.

Overall, as Malaysia moves towards new AI regulations, marketing professionals need to stay informed and agile, ready to adapt their practices to comply with new legal standards while still leveraging AI technologies effectively, said Wong.

Meanwhile, Vaz emphasises the concerns around data and privacy, adding that it needs to be prioritised. 

"Ethical guidelines and governances will need to be established in order to ensure proper transparencies are being practiced in data handling practices," said Vaz. 

In tandem, investing in training and education for employees as the space continues to change and grow is also required when implementing AI ethically. This is especially so that employees will be equipped with the right capabilities to monitor and audit AI systems and engage with stakeholders for feedback. It also help foster accountability within the organisation, added Vaz. 

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