The UK ICO's AI Data Strategy: Implications For Your Business

In Short

• The ICO's AI and Biometrics Strategy signals closer scrutiny of how businesses use AI that processes personal data.
• UK data protection laws apply to AI use, with new guidance and codes of practice on fairness, transparency and accountability.
• Businesses should review AI tools and governance now to reduce risk and meet growing regulatory expectations.

Tips for Businesses

If you use AI, map where personal data is involved and document how your systems work. Be clear with individuals when AI influences decisions and keep humans meaningfully involved. Review supplier safeguards, update internal AI policies, and train staff regularly. Stay alert to new ICO guidance, as expectations in this area are evolving quickly.

Artificial intelligence (AI) is rapidly transforming how organisations operate across the UK and globally. Businesses are using AI systems to automate processes, support decision-making and drive efficiency. As these technologies become more powerful and are used to process personal data, it is vital to consider how UK data protection laws apply and take steps to comply.

To help businesses, the UK's data protection regulator, the Information Commissioner's Office (ICO), has published an AI and Biometrics Strategy, outlining plans to regulate AI and biometric technologies. If your company is currently adopting (or planning to adopt) AI, you should:

• understand the potential impact of this strategy on your operations;
• monitor developments to assess how they may affect your compliance obligations; and
• ensure your AI use follows data protection laws, as regulatory monitoring in this area is increasing.

This article introduces the UK's data protection framework, the ICO's strategy on AI, and offers broad practical considerations to help your business comply with data protection laws when using AI technologies.

The UK's Data Protection Law Framework and AI Usage Implications

The UK's data protection framework includes the UK GDPR and the Data Protection Act 2018. These laws control how your business can use personal information, and failing to follow them can lead to penalties. The new Data (Use and Access) Act 2025 is being introduced in stages and makes targeted changes to specific data protection rules.

AI now affects many areas of business. While it can improve efficiency and operations, it also raises important legal and ethical challenges.

Understanding the ICO's AI and Biometrics Strategy

The ICO's AI and Biometrics Strategy explains how the data protection regulator intends to support responsible innovation, but also ensure that organisations protect personal information. AI and biometrics are evolving quickly, and the ICO is working to support both public trust and responsible innovation by setting out a clear programme of work.

The ICO aims to issue:

• targeted guidance;
• practical examples; and
• clear expectations to help organisations deploy AI responsibly and lawfully.

A key part of the strategy is a code of practice on AI and automated decision-making. The framework will give clear guidance for organisations developing or using AI systems.

It will cover issues such as:

• fairness;
• transparency;
• accountability; and
• ensuring humans remain meaningfully involved when automated systems affect decisions about people.

The strategy also highlights increasing regulatory attention to generative AI. The ICO intends to work with developers to ensure that personal data is handled responsibly and lawfully when training generative AI and other foundation models, and to embed safeguards from the outset.

Additionally, the ICO wants to improve how automated decision-making is managed in areas that have a big impact, such as:

• public services;
• eligibility checks; and
• recruitment.

Research highlighted that people want clear explanations about:

• when AI affects decisions;
• how their data is used; and
• what safeguards are in place to prevent unfair outcomes.

The research also found that people are concerned about bias, want clear rules on how biometric images are accessed and stored, and support meaningful human oversight, especially when facial recognition or other biometric technologies are used.

In response, the ICO will focus on areas where risks to individuals are high, public concern is clear, and regulation can make the biggest difference quickly.

Considerations for Organisations Using AI

The ICO's strategy shows that the UK's data protection regulator is taking a closer look at how AI is used. It is important to stay up to date with new developments, including AI guidelines and regulatory advice. While the ICO's approach is still evolving, businesses should monitor the rules and take steps to protect personal data when using AI systems.

For businesses, key AI and data protection focus areas include:

• data security;
• ethical considerations;
• consent and transparency; and
• compliance with applicable data protection laws.

Personal Data Breach Notification Factsheet

This factsheet outlines the steps for notifying the ICO and affected individuals about personal data breaches.

Download Now

Legal Considerations for Using AI

AI legal considerations and requirements are complex and circumstantial, so your business must carefully assess each AI use case and analyse your compliance obligations. As this is a fast-moving area of regulation, your business should prioritise data protection compliance when using AI, especially given the level of uncertainty and the risks associated with AI deployments.

Some important data protection considerations when using AI include:

• map and audit your existing or proposed AI strategy and tools to identify and assess compliance with data protection law rules;
• document how your AI models function – including training data sources, validation processes and performance monitoring to support accountability;
• implement, review and update your internal AI policies so they reflect fairness, transparency and accountability, and clearly explain how your business selects, implements and monitors AI tools;
• explain when AI systems make or support decisions, how personal data is processed through them and how individuals can request further information;
• assess the need for AI-driven monitoring or decision support to ensure it is justified and avoids intrusive or excessive data collection;
• engage with AI suppliers to confirm safeguards are implemented, they comply with data protection requirements and provide clarity about model behaviour and training data;
• train your teams on the ethical, operational and data protection considerations surrounding AI; and
• monitor ongoing regulatory developments.

These steps can help to support your accountability and compliance during a period of regulatory change, build trust and protect your business's reputation when using AI.

The Importance of Seeking Legal Advice

Because AI governance and data protection rules are complex, constantly changing, and depend on the situation, your business should get advice from a data protection solicitor. Legal guidance can help you:

• understand how current and upcoming rules apply to your AI use;
• interpret and implement relevant requirements;
• identify and manage risks when buying, using, or overseeing AI systems;
• design effective AI governance frameworks;
• evaluate whether AI deployments are necessary and proportionate; and
• put in place strong processes to protect personal data and build trust in your AI practices.

Key Takeaways

The ICO's AI and Biometrics Strategy highlights a shift toward a more structured and closely supervised approach to AI and data protection regulation in the UK and sets out clearer regulatory priorities which will impact businesses using AI. Therefore, it is vital for businesses that use AI to prioritise compliance with data protection laws and stay updated on regulatory developments.

To help your business stay ahead of emerging expectations and reduce risk, you should focus on:

• transparency;
• accountability;
• tailored documentation; and
• robust AI governance

If your business needs legal advice on using AI in your small business, our experienced data, privacy and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

What is the UK's data protection law framework?

The UK GDPR, the Data Protection Act 2018 and the Data (Use and Access) Act 2025 form the UK's data protection framework. Data protection laws set out strict, mandatory rules for the use of personal data.

Does data protection law apply to the use of AI?

Any use by your business of an AI system that processes personal data must comply with UK data protection laws. The compliance obligations arising are complex, developing and highly fact-specific, so it is sensible to seek advice from a data protection solicitor who can guide you on the relevant issues and legal rules to consider.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.