The importance of AI is now being recognized and accepted globally. All banking and finance institutions have been faced with several functional challenges to adopting a streamlined and efficient strategy to better serve themselves and customers. It can help people make sense of their finances better, offer personalized banking to deliver cutting-edge service, and generally assist in making customers manage their money better. According to Deltec Bank, Bahamas, – “Operationally, the potential of AI is serious. But what is also just as serious is how artificial intelligence is governed within an organization, and how institutions are aligning their practice, policies, and ethos guidelines.”
These are broader implications that need to be considered. Unsurprisingly, there have been calls for AI development restrictions to be put in place in the form of government regulations. Risks from some of more reputable techno-heads such as Bill Gates, Stephen Hawking, and Elon Musk have voiced long-term risks of using AI.
Ultimately, where AI technologies fail due to a glitch, there is a lack of barriers to protect and safeguard the technology and performance of AI. Politicians have raised the concern of the ethical use of AI and its data. The boom of Big Data has significantly contributed to calls to control customer data, how its own, and how it’s used without violating privacy, integrity, and confidentiality. This is the next phase for AI to evolve into a global but trusted force. Let’s take a look at some of the ethical challenges that are being raised with AI.
Data sets are being handed over to institutions and more often than not, individuals are requested to seek consent for data access or give consent to use data for use of services. The use of personal data helps institutions to know more about their customers. AI technologies are being invested in using customer data to help customers manage their finances. Are customers aware of how their data is used and is it ethical to use customer data within analytics to gain insight into payment and finance habits?
Treating Customers Fairly and Equally
In respect to customers’ basic rights, institutions need to determine the negative impacts of violating their basic rights such as financial or data loss, privacy, and integrity. There still needs to be an understanding as to how algorithms can be “fair” to provide a fair judgment so that customers’ rights aren’t violated. Systematically inaccurate data sets may become a key source of bias, and institutions must ensure that AI technology is built in a way where the data used will treat customers fairly and equally.
Seek Customer Trust
According to Deltec Bank, Bahamas, “Artificial Intelligence offers great potential for customers to make better sense of their money, providing them with automated and personalized real-time service and overall promote better financial well-being.” However, biased data sets can significantly damage the service and reputation of financial institutions, particularly when handling customer’s finances. Adopting ethical principles that promote better transparency whilst being upfront about technological limitations is a great way to regain the trust of customers. Customers will see the institution striking a balance between the capabilities of the technology and the safeguarding of customer data and usage.
Artificial Intelligence is dominating the digital era, but lately, there have been announcements as to how ethical consideration efforts can be governed. It is a central barrier of AI, to safeguard the technology, its data and decisions to avoid ethical discrimination. Getting ethics right is essential to win and keep the trust of customers to ensure the full benefits can be utilized safely and securely.
To sum up, whilst artificial intelligence is being globally accepted, the way it’s being used has raised more questions. All financial institutions are required to understand the liabilities and penalties associated with data management and usability whilst protecting the basic human rights of customers from a privacy, security, and integrity perspective. Implications of not doing so mean a lack of satisfaction, trust, and promoting ethical discrimination. There needs to be strong accountability for institutions to deploy ethical commitments to be secure and reliable.
Disclaimer: The author of this text, Robin Trehan, has an undergraduate degree in Economics, Masters in international business and finance and an MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries, and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.