Dexter Nguyen - Oped 3.docx

Dexter Nguyen Op-Ed 3

Ethical challenges of using AI in the banking & financial industry For the past few years, the rise of AI application has positively impacted on the financial industry in almost every area. However, its potential is not guaranteed, resulting in many questions around the ethical awareness and responsibility of financial professionals, whose jobs technically seems to be replaced. As no one knows exactly who is responsible for AI decisions and actions, the dispute around this issue is opening the door to a multi-dimensional analysis. The inevitable development of AI technology offers unlimited benefits for the banking and financial sector. First, AI is increasingly using its huge potentials to help people make better sense of their money, automate actions to promote financial wellbeing and help rebuild trust between banks and customers. In the fintech industry, we’ve seen ROBO advisors that aim to replace finance professionals such as bankers, financial planners, financial advisors and such by providing customers and businesses investment advice, or by providing people recommendations to increase their earnings from stock assets. We’ve also witnessed how Chatbots has changed the way we define customer service with self-serve platforms. Second, automation motivates actions that serve the customer’s best interest, such as transferring money across accounts to avoid overdraft fees and switching to better providers and products. Automation may also be helpful for people with mental health conditions who experience a lack of control over their spending habits and want to pre-commit to certain behaviors. Despite the fact that some authorities have publicly spoken their concerns about ethical issues happening to industry’s employees when their physical job junctions can disappear, what the industry is truly reacting shows the contradiction. Since AI would and is automating a lot of routine tasks and performing them in a more efficient and reliable manner, the roles and responsibilities in a workplace are going to transform. Banks and financial services are consistently keeping a lookout for what kinds of roles are getting eliminated by AI application before issuing an alternative action plan to upskill such employees through training and education.

Dexter Nguyen Op-Ed 3

The potential is big, but the challenge is bigger. One of the standards, which are being challenged, is the transparency about the use of AI in the industry. History shows that many big names used to disappoint loyal customers by betraying their trust. In 2018, there might be no exception when the United States saw a 20-point drop on the Edelman Trust Barometer when it came to consumer trust in financial services. While AI technology provides immense opportunity to help build trust through personalized advice and coaching, as well as confidential human-like conversations, these intelligent systems are still emerging and unfamiliar to the general public, who are already using an AI tool, but don’t realize it. So, the question is how banks can be more transparent about the use of AI technology? They need to balance between offering a human interaction, while still being apparent to the user that this is the work of conversational AI. Talking about the second challenge, customers have a reason to question the accountability when they are served by AI technology. Who is responsible for the outcome of the decision-making process of an artificial agent chatting with you via a mobile device? Who should be answerable to the consequences of incorrect advice of an AI algorithm? Ideally, the parties, companies, or organizations who have produced the algorithm should take responsibility for all the decisions taken by the AI model. But what about the banks or financial services to which you are dealing? What are their roles in solving your problems? There has no right and legal answer in near future. Finally, one of the top concerns of AI by far is its threats to consumers’ data and privacy. A bank can hold a large store of data about their customers as a way to enhance the performance of AI platforms. Although in Europe, we’ve already seen data privacy laws coming into effect to govern and protect consumer data, there are still big legal gaps in many other countries around the world. Nothing happens if the whole banking and financial industry carefully consider how they handle customers’ personal data collected. However, no one is sure that they are treating it properly by limiting usage and access.