Pega Introduces AI Transparency Controls for Mitigating Compliance Risk

Called T-Switch, the new capability will help companies mitigate regulatory compliance risks associated with a lack of transparency.

(Image source: Shutterstock.)

Pegasystems (Cambridge, Mass.) has introduced a new capability designed to give organizations control over the transparency of their artificial intelligence (AI) customer engagement models. The vendor’s reports that the latest release of its Pega Customer Decision Hub, due by the end of October 2017, will enable users to more easily and safely deploy AI algorithms based on transparency thresholds within their business. Called T-Switch, the new capability will help companies mitigate regulatory compliance risks associated with a lack of transparency.

“With increasing amounts of regulations, nearly any global organization needs to ensure its AI systems provide the appropriate levels of transparency that allow businesses to explain how they use customer data,” comments Rob Walker, VP, decision management, Pegasystems. “The T-Switch, built into the AI-powered Pega Customer Decision Hub, ensures that organizations maintain compliance while leveraging the power of AI to provide exceptional experiences that increases customer satisfaction and the bottom line.”

Rob Walker, VP, Decision Management, Pegasystems.

The new capability was created to respond to challenges associated with companies’ increased use of AI to gain insight into customer demand and deliver more personalized services, sales and marketing. Pega asserts that AI models may not be built to provide the degree of transparency needed for companies to adequately understand how the model arrives at decisions, which is problematic for highly regulated industries such as insurance and financial services.

AI algorithms can deliver powerful performance but in a “black box” manner that leaves the logic behind decisions opaque. That can present regulatory compliance problems for companies called upon by regulators to explain the logic behind decisions that are unintended or could be interpreted as being discriminatory or contrary to the interest of the client. In addition to existing regulatory and legal exposure, as of May 2018, companies doing business in the European Union will face the General Data Protection Regulation (GDPR) mandates that require them to be able to explain the logic behind AI models using European customer data to make decisions or risk massive fines up to four percent of global revenues for non-compliance.

Pega says that the T-Switch feature of its AI-powered Pega Customer Decision Hub, will allow organizations to set the appropriate thresholds for AI transparency or opaqueness. Businesses will be able to predefine these levels for each AI model using a simple sliding scale from one (most opaque) to five (most transparent). The transparency scores will help guide business users to build AI systems using the right models that meet their organization’s transparency requirements without sacrificing their ability to deliver compelling customer experiences.

For example, companies can safely use more opaque AI models for purposes such as image recognition that helps flag older content assets still using outdated branding, the vendor explains. High levels of transparency will be appropriate for marketers at financial institutions under strict regulations regarding the kinds of loans they offer customers, to ensure they can demonstrate the resulting product offers are appropriate for the financial needs for each individual.

Within the Pega Customer Decision Hub, users will be able to access the T-Switch and all other Pega AI tools in a newly centralized Business Control Center for AI, the vendor reports. Pega says this allows users to create, import, adjust, and monitor their AI models to drive better business outcomes in a single dashboard. This includes models built using:

  • Pega Predictive Analytics Director to rapidly develop models that accurately predict customer behaviors
  • Pega Adaptive Decision Manager to automatically adjust models on the fly based on customer actions
  • Pega Text Analytics for text classification, sentiment analysis, and intent detection
  • Any third-party AI models available via PMML

Pega Customer Decision Hub works in tandem with Pega’s suite of CRM applications for marketing, sales, and customer service which the vendor says are designed to anticipate customer needs and provide highly contextual brand experiences for each individual customer.

Latest Pega Platform Release Adds New AI, Collaboration and Integration Capabilities

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at or (503) 936-2803.

Leave a Comment