More Compliance Regulation Will Set Solid Rules for LSP Growth in the AI Paradigm


Fish eye image of a city

It is always crucial to put your best foot forward in business and play to your strengths. But which foot do you choose? Language Service Providers (LSPs) are the first stop for global enterprises wanting to solve complex multilingual language content challenges. However, dig down below the language, and what you find is that also Subject Matter Expertise (SME) underpins language industry deliveries.

Doing business globally inevitably requires language knowledge but coupled with a deep-rooted knowledge in how to navigate the increasingly complex challenge of compliance. Given the increase in AI, more regulation and subsequent compliance challenges are surely on their way. Therefore, LSPs must also increase their SME knowledge to remain relevant as global business partners. The challenge, thankfully, also comes with much opportunity given the exponential growth of AI business.

Localization has always been many things beyond translation. An extended role in partnering with customers on complex AI compliance challenges would bring higher recognition and greater value proposition from LSP customers at a time when LSP future revenue streams are under the spotlight, given the effects of exponential improvement in automated Language technologies.

LSP history with compliance

Clearly compliance is not new to LSPs, which makes for a sense of optimism when it comes to growing this line of business.

LSPs have long since provided services to customers in regulated industries such as Life Science Intellectual Property (IP) and Finance.

In Life Sciences, a key requirement is that linguists provided by LSPs must have relevant expertise and understand the technical terminology, regulatory requirements, and industry standards. In the Life Sciences sector, linguists are expected to provide support across a variety of life science content, including clinical trial protocols, regulatory submissions, patient consent forms, and drug labels.

As situations are never stable for long periods of time, regulation and compliance can change and as such LSPs must adapt accordingly. The obvious example is the pandemic, when vaccine testing and distribution needed to be accelerated. The work done by LSPs in offering a comprehensive suite of language services proved essential.

It is a similar story when it comes to the IP sector. Here, LSPs must provide support for key milestones throughout the patent lifecycle, including patent filings in multiple languages and jurisdictions, patent search and analysis services to assess patentability regarding the competitive landscape, patent specifications, legal agreements, and other intellectual property documents. Again, accurate translations ensure that the original meaning and technical details are preserved across different languages, which is essential for securing and protecting intellectual property rights globally.

LSPs also assist when it comes to patent infringement and other legal issues, ensuring reliable language support to all stakeholders. Here, LSPs again rely on their technology and processes to navigate the complex IP, maximize the value of their innovations, and protect their competitive advantage in the marketplace. The suite of technology solutions such as CAT, TMS, and the use of MT that not only ensure operational excellence but also protect their customers’ sensitive data. It is this orchestrated approach combining linguistic expertise with cutting-edge technology and SME knowledge that is at the heart of the LSP offering to regulated sectors with compliance needs when it comes to empowering their global operations.

Recent examples and experience

Given the complexity of our global economies, regulation and compliance have continually grown, and LSPs have stepped in to enable these developments. For instance, North America has seen the extension of regulation in recent years that has brought about a greater need for language services.

In Quebec, Canada, BILL 96, passed in 2022, recognizes French as the common language of the province. It requires companies to do both internal and external operations in French. Businesses with interests in Quebec that are located outside must also supply translations into French. If not, there are heavy financial consequences for noncompliance. Consequently, it is necessary to thoroughly audit all company content, including external packaging, brochures, and catalogues, as well as internal documents like HR and financial records. Everything, in other words, that companies require to run their operations.

This is where LSPs have provided vital services beyond translation by auditing above-mentioned corporate content to ensure the necessary compliance to avoid the risk of fines and disruption to business activities and ensure a smooth transition regarding the compliance challenges of Bill 96.

Elsewhere, in the U.S., the requirement for LSPs to ensure compliance has also long since been a reality in the U.S. healthcare system, stemming from the “Affordable Care Act” (ACA), passed in 2010. Section 1557 of the Act “prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in any health program or activity that receives Federal financial assistance.” This extends to the provision of language assistance such as translation of key policy documents regarding coverage or interpreting services to individuals with limited English proficiency (LEP) and ensuring effective communication.

In this regard, LSPs are essential in helping individuals understand their options and rights in healthcare as well as helping healthcare insurers maintain compliance. The vast linguistic diversity in the United States makes the Act more and more pertinent. As per the U.S. Census Bureau's publication “Language Use in the United States: 2019 Report”, authored by Sandy Dietrich and Erik Hernandez, “The number of people in the United States who spoke a language other than English at home nearly tripled from 23.1 million (about 1 in 10) in 1980 to 67.8 million (almost 1 in 5) in 2019.”

It's also important to note that the U.S. Department of Health and Human Services (HHS) addressed machine translation in its "LANGUAGE ACCESS PLAN, 2023" and stated the following:  “Machine translation or other artificial intelligence applications, or software designed to convert written text from one language to another, should not be utilized without the involvement of a qualified human translator before the text reaches the intended audience.”

As a result, LSPs are proving essential in providing healthcare security for those with limited English proficiency within a linguistically varied nation like the United States. Through the provision of interpreting and translating services, patients are safeguarded in being able to convey their medical needs and adhere to subsequent treatments at critical and vulnerable moments.

As a final note, as of January 2024, 21.3 million Americans signed up for coverage under the   Affordable Care Act coverage, an increase of 5 million from the previous year.

Enter the AI Act…

We now face the most complex compliance challenge in human history, that of AI, with this year being the year that governments and public institutions began the long journey to working out the framework in which we interact with this new paradigm.

In Europe, the EU Artificial Intelligence Act ("AI Act") was officially adopted by the European Parliament on March 13, 2024. The Act categorizes AI based on its level of risk, establishing distinct regulations for each category. It outright prohibits AI systems deemed to pose unacceptable risks, such as those involved in social scoring or designed for manipulation.

The primary responsibilities and obligations under the AI Act primarily target providers or developers of high-risk AI systems. These obligations apply to entities intending to introduce high-risk AI systems into the European market, irrespective of their location within or outside the EU, and impose stringent regulations to ensure their safe and ethical deployment. A smaller segment addresses limited-risk AI systems, requiring developers and operators to maintain transparency regarding AI involvement, particularly in instances like chatbots and deepfakes. Meanwhile, those AI applications categorized as minimal risk remain unregulated, encompassing various commonplace technologies like AI-enhanced video games and spam filters.

Lack of compliance comes with penalties, up to 7% of the global annual turnover, or €35 million, whichever proves higher.

The EU AI Act represents a milestone for the European Union and has been followed by a plethora of similar activity around the world. So, with the ball rolling on AI regulation and compliance, how can LSPs seize new opportunities?

AI opportunities for LSPs

Once the future AI landscape is better understood, LSPs  will need to find new solutions and adjust their market positioning. In this respect, compliance requirements can play to LSPs’ strengths, given their SME knowledge across many lucrative regulated industries.

The first requirement is likely to assist in comprehending the changing regulatory environment. Given LSP familiarity with intricate regulatory mandates, LSPs can help in interpreting and putting into effect the required procedures across many languages and jurisdictions. Such regulatory compliance consulting will position LSPs well to support customers navigating complex and new regulatory landscapes and ensure that their AI solutions comply with pertinent laws and regulations, such as data protection laws and industry-specific regulations, given the evolving nature of technology and potential associated risks, as currently laid out by the EU AI act, for example.
Beyond the requirement to understand compliance prerequisites, LSPs can prove useful in helping oversee how companies build and deploy future solutions. This includes the complex task of helping organize the enterprise into a data-driven paradigm because in the world of today, the mirror image of an enterprise organization is its data. With the data destined to be at the core of Enterprise AI that will drive future decision-making, data crucially becomes the future currency of trust.

With the enterprise being made up of various departmental components, this data needs to be gathered carefully and systematically across all corporate stakeholders, and across their global organization. The opportunity for LSPs is to shadow their customers' future AI roadmaps while continuing to manage their global content, and to uncover synergies between these two activities to build a broad, more future-proof commercial offering.

To this point, the linguistic talent that underpins LSP solutions today will prove fundamental. For instance, linguists are the drivers in translation memory management (effectively data management) which has proved crucial to the success of machine translation models. From AI model building, an LSP’s SMEs can again lean on linguistic know-how in performing quality assurance and AI testing to ensure regulatory requirements and high performance across languages sets, as well as accommodating for and cultural nuances, accuracy, bias, and other ethical considerations. 

As with neural machine translation, troubleshooting poor output prior to eventual deployment will prove key to the success and acceptance of AI. By repurposing linguistic talent, LSPs can bring value to customers creating AI roadmaps by identifying, mitigating, and monitoring risks.

As enterprises become more confident, full-scale deployments will naturally proliferate, and the need to train and educate global workforces will be a huge and ongoing challenge. Localization has been constant and consistent when it comes to technology adaptation (think CAT, TMS, and MT adoption). At each of these stages, the onboarding process has proved crucial to all stakeholders, including buyers. LSPs can offer training programs to help customers and their employees understand new AI systems, as well as helping to develop the skills necessary to ensure operational best practices and compliance in their day-to-day activities. Finally, LSPs can do what they have always done: translate and localize AI-related content, including user interfaces, documentation, and training materials, to ensure accessibility and compliance for users across different languages, locations, and cultural contexts.

Fundamentally, future success for LSPs will come through leveraging their language expertise, regulatory knowledge in respect to compliance to relevant regulations and standards, and continual efficient use of technology.

LSPs and the next big thing

With shifting economic landscapes, coupled with significant revenue concerns across the localization industry, new value propositions that bring in sustainable revenue streams should clearly be considered, given that things move quickly.

From the time I started and finished writing this piece, the EU AI act had reached final ratification in March and the U.S. Office for Civil Rights (OCR) issued a final rule under Section 1557 of the Affordable Care Act.
LSPs need to make key decisions soon regarding the nature of their business model. Thankfully, there are some options which are grounded in decades of experience and lessons learned. Specifically, decades of learnings around automation, co-piloting with technology, and fit-for-purpose testing and deployment strategies make for a formidable consultancy proposition.

So back to the question of which foot to put forward. Probably both at the same time given the need for linguists with SME knowledge in today’s evolving landscape. A leap into the AI future might not be so daunting as revenues shift from working in traditional services to becoming a partner at the table of AI deployments, which, one suspects, will dominate our working paradigm for some time to come.



Rodrigo Fuentes Corradi

Rodrigo Fuentes Corradi has 20 plus years of experience in the localization industry including over 15 years in strategic and operational roles in MT. He specializes and provides consultancy in human enablement and operational deployment for the future Linguistic AI paradigm.