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On July 15, 2024
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[1]
TCS CFO Samir Seksaria ensures TCS is adequately covered for risks from GenAI projects | India Business News - Times of India
BENGALURU: TCS CFO Samir Seksaria stated that the company is adequately covered for any risks and liabilities that might emerge from projects deployed leveraging GenAI. "Given its initial stage, GenAI is not increasing the overall risk materiality from that perspective. We have adequate cover both from an errors and omissions (insurance) perspective and a D&O (directors and officers insurance policy), as well as from asset coverage too.Structurally, these are risks that are taken care of by the project management team, and our legal team is involved in looking at what the exposures could be, and we continue to mitigate them. Insurance is just a fallback to it," he said. Errors & omission insurance protects businesses and their employees from negligent actions from clients. As companies embrace GenAI for proof-of-concept to create new revenue upsides, they are evaluating new claims that could emerge from D&O insurers, SEC proceedings, and AI disclosure-based claims. Seksaria also highlighted the company's substantial insurance coverage, amounting to hundreds of millions of dollars, which covers a wide range of risks. Seksaria emphasised that these risks are managed by the project management team, with the legal team assessing potential exposures and continuously working to mitigate them. TCS is currently executing about 270 GenAI projects, and its AI and GenAI pipeline has doubled to $1.5 billion in the June quarter. "The pipeline first needs to convert into an order book, then into revenues. So, once we get a more stable outlook coming from it, that is when we'll start considering publishing those metrics. There could be new risks emerging from GenAI, and how we deal with it. IP protection becomes a big issue, and it is one of the risks that everyone will have to look into," he added. TCS's operating margin dropped 130 basis points sequentially to 24.7% on account of a wage hike, but on a year-on-year basis, it expanded by 1.5%. "The overall impact of increments is 170 basis points, which has been in line with what we have called out in the past, which is anywhere between 150 to 200 basis points. We have been driving better productivity, improved utilisation, and reducing subcontractor costs. The first two factors reflect positively on the manpower cost, and that balances out some of the impact of increments in this quarter as well," said Seksaria. Its operating margin is inching towards its aspirational 26% to 28% band. Seksaria said currency, in the last year, has remained stable and range-bound. Currency depreciation does help, but we have not seen that play out materially. The levers which we look towards in the short term will be more in terms of driving productivity and improved utilisation.
[2]
TCS CFO Samir Seksaria ensures TCS is adequately covered for risks from GenAI projects | Bengaluru News - Times of India
Bengaluru: TCS CFO Samir Seksaria stated that the company is adequately covered for any risks and liabilities that might emerge from projects deployed leveraging GenAI. "Given its initial stage, GenAI is not increasing the overall risk materiality from that perspective. We have adequate cover both from an errors and omissions (insurance) perspective and a D&O (directors and officers insurance policy), as well as from asset coverage too.Structurally, these are risks that are taken care of by the project management team, and our legal team is involved in looking at what the exposures could be, and we continue to mitigate them. Insurance is just a fallback to it," he said. Errors & omission insurance protects businesses and their employees from negligent actions from clients. As companies embrace GenAI for proof-of-concept to create new revenue upsides, they are evaluating new claims that could emerge from D&O insurers, SEC proceedings, and AI disclosure-based claims. Seksaria also highlighted the company's substantial insurance coverage, amounting to hundreds of millions of dollars, which covers a wide range of risks. Seksaria emphasised that these risks are managed by the project management team, with the legal team assessing potential exposures and continuously working to mitigate them. TCS is currently executing about 270 GenAI projects, and its AI and GenAI pipeline has doubled to $1.5 billion in the June quarter. "The pipeline first needs to convert into an order book, then into revenues. So, once we get a more stable outlook coming from it, that is when we'll start considering publishing those metrics. There could be new risks emerging from GenAI, and how we deal with it. IP protection becomes a big issue, and it is one of the risks that everyone will have to look into," he added. TCS's operating margin dropped 130 basis points sequentially to 24.7% on account of a wage hike, but on a year-on-year basis, it expanded by 1.5%. "The overall impact of increments is 170 basis points, which has been in line with what we have called out in the past, which is anywhere between 150 to 200 basis points. We have been driving better productivity, improved utilisation, and reducing subcontractor costs. The first two factors reflect positively on the manpower cost, and that balances out some of the impact of increments in this quarter as well," said Seksaria. Its operating margin is inching towards its aspirational 26% to 28% band. Seksaria said currency, in the last year, has remained stable and range-bound. Currency depreciation does help, but we have not seen that play out materially. The levers which we look towards in the short term will be more in terms of driving productivity and improved utilisation.
[3]
Claims arising from GenAI covered: TCS CFO Samir Seksaria - ET Telecom
Seksaria emphasised that these risks are managed by the project management team, with the legal team assessing potential exposures and continuously working to mitigate them. TCS is currently executing about 270 GenAI projects, and its AI and GenAI pipeline has doubled to $1.5 billion in the June quarter.
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TCS CFO Samir Seksaria discusses the company's approach to managing risks associated with generative AI projects, emphasizing adequate insurance coverage and responsible AI practices.
Tata Consultancy Services (TCS), India's largest IT services company, is taking a proactive stance in addressing the potential risks associated with generative AI (GenAI) projects. Chief Financial Officer Samir Seksaria has confirmed that the company is adequately covered for any claims that may arise from such initiatives 1.
Seksaria emphasized that TCS has comprehensive insurance policies in place to mitigate potential risks. These policies cover various aspects of their operations, including technology errors and omissions, as well as cyber liability 2. The company's approach to risk management involves a combination of insurance coverage and internal controls to ensure responsible AI practices.
TCS has implemented a robust responsible AI framework to guide its GenAI projects. This framework includes measures such as:
By adhering to these principles, TCS aims to minimize potential risks associated with GenAI technologies 3.
The rapid advancement of GenAI technologies has raised concerns within the IT services industry regarding potential legal and ethical implications. Issues such as copyright infringement, data privacy violations, and unintended consequences of AI-generated content have been at the forefront of discussions 1.
TCS's proactive approach in addressing these concerns demonstrates its commitment to responsible innovation and risk management. By ensuring adequate insurance coverage and implementing a comprehensive responsible AI framework, the company aims to position itself as a leader in the safe and ethical development of GenAI technologies 2.
As the GenAI landscape continues to evolve, TCS remains committed to staying ahead of potential risks and challenges. The company's focus on responsible AI practices and comprehensive risk management strategies is expected to play a crucial role in its future projects and client engagements in the rapidly growing field of generative AI 3.
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TCS CEO K. Krithivasan addresses the company's stance on generative AI, market challenges, and growth prospects in India. He emphasizes TCS's adaptability and potential in the evolving tech landscape.
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Infosys CEO Salil Parekh reports strong client interest in generative AI and doesn't anticipate layoffs due to new-age technologies. The company is focusing on reskilling employees and sees AI as an opportunity for growth.
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Artificial Intelligence is reshaping the banking and financial services sector, offering new opportunities for growth and efficiency while also presenting emerging risks. This story explores the impact of AI in ASEAN markets and beyond, highlighting both the potential benefits and challenges.
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HCL Technologies' CEO C Vijayakumar expresses confidence in meeting the company's annual growth guidance of 3-5% despite a challenging third quarter. The tech giant remains optimistic about its future prospects and strategic initiatives.
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A new PwC India report reveals that 90% of financial institutions in India are focusing on AI and Generative AI for innovation. The study highlights the growing importance of AI technologies in the financial sector and their potential impact on various aspects of business operations.
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