Transparency in the Age of AI: Why Businesses Must Disclose AI Use in Interactive Systems

As Artificial Intelligence continues to embed itself into customer interactions, regulatory bodies worldwide are introducing measures to ensure AI doesn’t become a black box. One of the most critical and emerging requirements?

Transparency.

Under new and upcoming AI regulations—including the EU AI Act and similar proposals in the US, UK, and APAC regions—businesses will be required to clearly disclose when AI is being used in interactive systems. This shift isn't just about ticking compliance checkboxes; it’s about building trust, ensuring accountability, and fostering ethical AI usage.

Why Transparency Matters in AI Interactions

Imagine chatting with a customer support agent, receiving legal advice, or even getting mental health assistance—only to later discover you were speaking with an AI and not a human. While AI can be powerful, this lack of disclosure can erode user trust, raise ethical concerns, and potentially breach regulatory standards.

Transparency ensures:

• Users know they are interacting with a machine

• AI systems are not misrepresenting themselves as human

• Businesses are held accountable for the outcomes of automated decisions

What Are the Transparency Requirements?

Across various regulatory proposals, the core expectation is consistent:

If a user is interacting with an AI system—especially one that simulates human behavior—the business must disclose that AI is being used.

This includes:

• Chatbots or virtual assistants used in customer service

• AI avatars or voice interfaces in healthcare, finance, or legal domains

• Recommendation engines that heavily influence user decisions

• Generative AI tools involved in content creation or communication

The goal is to empower the user with information about the technology they are engaging with—and give them a choice to continue or opt for human interaction.

What It Means for Your Business

These new transparency mandates will require companies to:

• Add clear disclosures at the start of AI-driven conversations

• Design interfaces that explain the role of AI in decision-making

• Log and audit AI interactions for traceability and compliance

• Provide fallback mechanisms for users to escalate to human agents when needed

Failure to comply may lead to regulatory fines, reputational damage, or legal challenges—especially in sectors where decisions impact consumer rights, safety, or financial wellbeing.

REDE Consulting: Your Partner in Responsible AI Implementation

At REDE Consulting, we help enterprises:

• Assess existing interactive AI systems for regulatory alignment

• Embed transparency notices and audit trails into ServiceNow platforms and workflows

• Design ethical, user-aware AI solutions that meet both compliance and user experience goals

• Integrate AI governance into GRC and IRM frameworks using ServiceNow best practices

As regulators tighten the lens on AI usage, transparency will no longer be optional—it will be a legal and ethical imperative.

Is your business AI-ready and regulation-resilient?

Let’s connect to explore how REDE Consulting can help you deliver AI transparency, responsibly. Reachout to our team at info@rede-consulting.com now.