The AI Act aims to make the use of AI in Europe safer and more reliable. The regulation is being phased in across EU member states. Since 2 February 2025, AI systems deemed to pose an unacceptable risk have been banned. These include systems that manipulate vulnerable groups (such as children) or rank citizens covertly based on social scoring—practices considered a direct threat to fundamental rights. 

In addition, organisations using AI systems must ensure that their employees are sufficiently AI-literate. From August 2025, rules for general-purpose AI models will come into effect, and EU member states must appoint supervisory authorities. The full AI Act will apply from 2 August 2026. 

Some organizations are on the right track. Those that remain passive, however, should be aware that the AI Act is not optional. The risks of non-compliance are significant: 

• Fines and sanctions: As with the GDPR, penalties for non-compliance can be substantial—up to millions of euros or a percentage of global turnover 

• Reputational damage: An AI system that produces discriminatory or unreliable outcomes can severely harm a company’s image 

• Loss of customer trust: Consumers and businesses increasingly expect responsible data and technology practices. Falling short can lead to customer attrition 

• Operational risks: Poorly trained AI can result in flawed risk assessments or missed fraud signals, leading to direct financial losses 

Inaction is not an option. 

The AI Act is not a brake, it’s a springboard. Organisations that integrate the rules intelligently are laying the groundwork for innovation. Use the AI Act as an opportunity to raise awareness, strengthen governance, and prepare your teams for the future.