69% of small businesses report issues using generative AI

A recent report by Xero has revealed that 69% of small businesses have encountered drawbacks with generative AI tools. This statistic comes in stark contrast to the growing adoption and trust in AI technologies by the small business community.

A large percentage of small businesses reported issues with generative AI

Unveiled at Xerocon Sydney this week, the “Future Focus AI” research engaged over 3,000 small business leaders across six countries.

Despite the fact that 80% of those surveyed expressed concerns around AI development outpacing regulation, plenty are still utiling it within their businesses, with 69% having issues with generative AI in particular.

Specific challenges cited by businesses included increased biases or inaccuracies in content at (18%), a dip in employee morale (18%) and a decrease in efficiency due to the oversight required for AI-generated content (16%).

Get daily business news.

The latest stories, funding information, and expert advice. Free to sign up.

A further 14% also noted a drop in their workforce following the integration of generative AI.

Mark Rees, Xero’s chief technology officer, responded to the findings with a commitment to ensuring the responsible use of AI.

“While the advantages of AI are clear, the report underscores the importance of adopting it with caution and the right knowledge,” Rees said.

Despite problems, small businesses are still trusting AI with sensitive data

Despite the high number of reported challenges and concerns around regulation, small businesses showcased a significant level of trust in AI. 51% of respondents trust it with identifiable customer data and 45% with sensitive commercial information.

Yet, with 23% noting an upsurge in security or privacy issues after employing generative AI tools, the survey underscores a glaring need for education and protective measures in the ecosystem.

The data also raises questions about Xero’s own use of generative AI, which it announced this week. This includes experiments with AI customer support and an AI assistant for Xero customers while onboarding onto the platform.

At a media round table in Sydney this week SmartCompany asked Xero about these new offerings and how it squares that off with the high percentage of small businesses that have reported issues with generative AI.

Xero’s chief product officer, Diya Jolly, said that at the present time these are just experiments with generative AI and are only being tested across a small number of customers in relatively closed-off environments that are in line with the company’s data use policy.

“So for example, we don’t make all our data available. We make the data that is not private, that is anonymised and aggregated available,” Jolly said.

“The second thing is where we run these as experiments so that we can see the output and make sure that there are no privacy gaps or security gaps.

“On the generative AI stuff, we can ensure that people are not and we are not using any private data. Right now it’s generally running on all our help articles and information about how to use our product. But we’re running experiments to see if people by mistake put in anything wrong, which we can then stop.”

Xero has also launched its own AI manual for customers titled, Future Focus: AI Guide for Accountants and Bookkeepers.

The aim of it is to assist professionals in navigating the intricacies of AI and its potential pitfalls.

“The guide is designed to clarify AI’s role, aiding accountants and bookkeepers in leveraging its benefits and sidestepping the risks for them and their small business clientele,” Rees said.

Still, we’re still early days when it comes to the use of AI, particularly generative AI, in small businesses. The numbers don’t lie and it’s clear that while being curious and trying new things is important for startups and SMEs, a cautious and informed approach is crucial.

Originally Appeared Here