Last week, one of my readers brought up my article on the use of customer data, AI, and open banking and said I had missed a key point. What did I miss? Now, the discussion was primarily about the use of customer data for marketing, advice, safety, security, risk, and compliance, but there's much more to it than that. It's also about ethics.
They revealed that most banks have a purely “commercial” view of compliance, including that regulatory fines can be imposed…but it is It's just a cost. An additional insight they gave me is that by not managing stakeholder risks around ethics, you can increase the risk of alienating customers.
As an example, an independent analysis of JPMorgan's ethics found that they were doing pretty well. This report by Ethics Grade provides great insight into the ethics of JPMorgan, an independent ESG company powered by AI.
Two things stood out to me in this report. The first is a scorecard used to balance a bank's commitment to regulation, reputation, robustness, and rezawolf risk.
That's a great scorecard.
Second, JPMorgan ranks third in its peer group for ethics, in the 83rd percentile of all companies, and ranks with a C grade. In other words, the company scores quite high, and he is in the top 4 out of 5 companies when it comes to ethics. Wow! But as another recent report proves, American banks have been shown to be quite unethical when it comes to investing in companies that destroy the planet and sell weapons to enemies of the state. Ta.
US bank listed as having the least ethical management in the UK
Two of America's largest banks have been ranked by researchers as the “worst” providers due to their policies on issues such as the climate crisis and weapons. Goldman Sachs and JPMorgan Chase & Co. both received poor scores due to their environmental, human rights and tax records, according to a new study by Ethical Consumer magazine.
This means there is considerable room for improvement. So what should I do? What we need to do is design ethically. What does that mean? Now, another friend sent me the following report specifically related to this area.
This book, written by Charles Radclyffe and Richard (Dick) Nodell*, is an interesting take on the subject.
This paper, published in 2020, looked at the Cambridge Analytica/Facebook-related scandal and how to manage ethics in the context of digital technologies. They argue that the problem is not simply that ethics as an area of governance is not well understood in the technology industry, but that it is either limited to discussion of risk and safety issues in mainstream dialogue or confused with regulation. It states that either there is or is not. compliance.
Terms used for organizations that govern ethics, such as “ethics committee” and “ethics council,” are also used interchangeably.
Charles and Dick's paper proposes defining digital ethics in terms of how it becomes clear that digital ethics should be seen as a completely separate governance topic from regulatory compliance, technical risk, and safety management.
Well worth the read and overall I agree. Ethics is a topic in itself, and increasingly important in today's world of customer data abuse, but in my opinion, ethics is a complete picture that incorporates risk, regulation, marketing, advice, and digital data analysis in general. Must be part of data model development. .
*Charles is a Forbes contributor and has lectured around the world on topics related to the fields of technology and social change, including two TEDx talks available online. Richard (Dick) has a career spanning over 40 years and specializes in working with leaders of large and complex organizations such as Goldman Sachs, American He Express, IBM, and AT&T.