How the EU AI Act Is Changing Business and Citizen Protection

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On the 7th of June, Dr. Galya Mancheva appeared on Bulgaria ON AIR to discuss the impact of the EU AI Act on business and citizen protection. In her capacity as board member of the Bulgarian Association of Information Technologies (BAIT), she explains how the European Union’s Artificial Intelligence Act will reshape business practices and enhance citizen protection. As one of the first comprehensive legal frameworks on AI globally, the Act introduces new standards that apply not only to companies within the EU but also to international businesses whose AI systems reach European users.

 

In the interview, Dr. Mancheva highlights how the new regulation brings the needed clarity by categorizing AI systems by risk and setting clear rules around transparency, safety, and accountability. She emphasises that the AI Act is not a barrier to innovation, but a foundation for building trust and ethical AI practices in the EU. Dr. Mancheva urges companies to move beyond fear and embrace AI, emphasizing that the EU AI Act is designed to ensure all stakeholders can benefit from AI in a safe and well-regulated environment. She emphasises the importance of business readiness, warning that many Bulgarian companies are still behind in adapting to the upcoming legal requirements. BAIT is working actively to raise awareness and help businesses align with the new standards.

 

Some of the consequences of failing to comply to the Act are also mentioned. The regulation allows for fines of up to €35 million or 7% of a company’s global annual turnover, depending on the nature and severity of the violation. But beyond the financial risk, Dr. Mancheva notes that companies also face reputational damage if they are found to be using AI irresponsibly.

 

A big focus of the interview is how the AI Act also plays a crucial role in protecting individuals. It guarantees that EU citizens have the right to know when they are interacting with AI and ensures their personal data is not being misused or exploited by black box algorithms. By banning the most dangerous applications and demanding transparency from high-risk systems, the regulation aims to build public trust in AI technologies.

 

Dr. Mancheva compares the regulation to simple traffic rules. “If we want to have many cars on the road,” she said, “we need clear rules that protect both drivers and pedestrians. That’s the only way we can all move forward safely.” In the same way, the AI Act creates a safe structure in which innovation can flourish without putting fundamental rights at risk.

Dr. Mancheva believes that the AI Act is carefully structured, under the guidance of many global business and political figures, focusing on the message that innovation should never come at the expense of accountability and human rights. She sees the AI Act not as a limitation, but as a framework for building responsible technology that serves both individuals and businesses.

 

AI Innovation and Risk Management in the Public Sector

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In a recent presentation hosted by NDB, Dr. Galya Mancheva explored the transformative role of AI in the public sector and the urgent need for ethical governance.  She called on government institutions to lead by example in adopting AI responsibly and transparently.

Dr. Mancheva explained that while AI offers new opportunities for public administration (from predictive policy tools to digital citizen services) its use must be rooted in strong internal controls and public accountability. Unlike in the private sector, decisions made with AI in public institutions often touch on basic rights, such as access to healthcare, education, or social support.

“Governments must show what responsible AI looks like,” said Dr. Mancheva. “When AI is used to make decisions that affect citizens’ lives, transparency, fairness, and human oversight are non-negotiable.”

She stressed that the EU AI Act provides the tools to ensure this happens. By categorizing AI systems by risk and requiring transparency from high-risk applications, the Act protects citizens while allowing space for innovation. In the public sector, this means guaranteeing that people know when they are interacting with AI and that their data is handled with care.

Dr. Mancheva also emphasized the need for national strategies that combine innovation with risk awareness. She warned that without proper governance, the public sector risks losing citizen trust, especially if algorithmic decisions go unchecked.

AI Innovation and Risk Management in the Financial Sector

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In the beginning of June, Dr. Galya Mancheva spoke at an event hosted by NDB, addressing the growing impact of AI on Bulgaria’s financial sector, as she outlined how the European Union’s Artificial Intelligence Act offers a critical framework for balancing innovation with responsible risk management.

Dr. Mancheva emphasized that financial institutions have much to gain from AI adoption. The financial sector covers a lot of ground, from automating customer service and enhancing fraud detection to optimizing credit scoring. However, a warning was made that the benefits of AI can only be realized when systems are transparent, explainable, and aligned with legal and ethical standards.

She pointed out that many financial firms still rely on black-box models that risk introducing bias or error, particularly in decisions that affect people’s financial rights. Under the EU AI Act, such high-risk applications will require rigorous documentation, transparency, and accountability measures.

“This is not about slowing innovation. It’s about building trust. AI systems in finance must be safe, fair, and explainable, especially when they affect real lives.”

Dr. Mancheva further noted that the AI Act sets a new compliance benchmark, with potential fines reaching €35 million or 7% of global turnover for violations. But the true cost, she argued, is reputational: companies seen as irresponsible in their AI practices may lose the trust of both clients and regulators. The AI pioneer urges financial institutions to act now, not later, and to treat regulatory readiness as part of their innovation strategy.