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With the rise of new emerging technologies reliant on data, data ethics comes into play. Asking questions and guiding practical actions about the use of data
 
Thursday 13 May
Read time: 3 mins
What should data ethics mean to FS providers
While definitions and opinions vary, put simply, we believe data ethics is a moral code of conduct laid out by each company that it will live, breathe and operate by when it comes to the use of data. No two data ethic frameworks are the same, and a framework cannot be copied as it is unique to the history, culture and future plans of an individual company, created by the individuals that run it.
 
With the rise of artificial intelligence (AI) and new emerging technologies reliant on data, it’s never been as critical as it is now for Financial Institutions (FIs) and Financial Service (FS) providers, such as banks and insurers, to build and maintain their social contract of trust with customers. This is where data ethics comes into play, asking questions and guiding practical actions about the use of data and understanding where it could be “misunderstood, mismanaged, or misused.”
 
There is no single agreed definition of data ethics, and it is more than just AI ethics, it is about how value judgments around the use of information across the data lifecycle interplay with the moral spectrum of a business. The reality is that each business’ moral spectrum will differ from that of another business. Think of it this way, your personal moral code of conduct and values are different to other people’s; some aspects may be widely different and others similar, but still with your own personal preferences. The same applies to your business.

 

For data ethics to be useful in practice, it has to be more than just ‘what not to do’; it can’t just be a compliance tick box exercise. And it’s not a binary list of yes or no, right or wrong questions. Data ethics is about exploring the nuanced grey areas which don't readily conform to a list of rules or regulations, whilst understanding what values the organisations lives by when using data. It is about shifting the conversation from what you could do with data, to what you should do with data. It is also more than just what you are doing with data, it’s also about who is doing it and the how and when.

 

What should data ethics mean to FIs?

With many FIs exploring how they can be a more responsive real-time organisation, data ethics can be the tool and guard rails needed to accelerate the opportunity of data in a considered way that aligns with organisation values.
 
FIs receive and manage huge volumes of data every day. Such data is used to support customers, shape products, service development, and manage risk, and data ethics has a pivotal role to play in each of these areas. Compliance activities, for example, have a shared set of data ethics principles around what, where, who, how and why aligning data to organisation values will be a fundamental table stake to any FI who wants to use data as a force multiplier. If data is poorly assessed, this could, for example, see a legitimate and innocent customer declined for loans or criminal activities left undetected. This is where the question as to who manages what type of data becomes vitally important.

 

Ultimately, ethics isn’t just something you should buy out of the box. We don't believe in a standalone vanilla set of data ethics to plug in and go; nor do we believe you can borrow a meaningful set of data ethics from another organisation and hope for the best. For data ethics to best support your organisation it has to be an extension of your organisation’s overall values and principles - what ‘the right thing’ means for you.
 
For more insight on data ethics and how it can be applied to your organisation, we have developed a guide on the fundamentals, applications and role of data ethics specific to the FS sector and the FIs that make up the ecosystem, covering:

  • What we mean by data ethics and what it should mean to FIs

  • Why we are talking about data ethics and why it is so important

  • Where to begin – the ‘101 of data ethics’

  • Data ethic values in practice

  • Making data ethics about more than just a checklist within your organisation

  • The future of data ethics for FIs

 
 

Download a copy our complimentary report: An Introduction to Data Ethics
 

Introduction to Data Ethics Ipad

Complimentary report:
An Introduction to Data Ethics

 

We hope you find this deep dive into data ethics insightful and practical. The subject has a huge role to play in the future of innovation for FIs and for the complex network of sectors they work with, and we are all well aware business decisions are only as strong as the data and the ethical conduct behind them.

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