60 second challenge: Ethical dilemmas

Written by Jade Batstone , Global Innovation Manager, SWIFT, Innes Macleod , SWIFT Innotribe Manager & Tony Fish , Author, Pioneer, Investor, AMF Ventures

In the SWIFT Innotribe 60-second challenge session, our moderator Jade Batstone (SWIFT) hosted questions posed by experts from across the globe, from anthropologists and sociologists to economists. The format was simple: each of the experts - Gillan Tett (FT), Diana Finch (Bristol Pound), Sophie Goodman (Anthropologist), Erin Taylor (Canela), Pablo Mondragón Valero (Umanyx) and Martin Gronemann (RED) - set out a moral or ethical dilemma of their choice for the audience to respond to. Each dilemma question was followed by a quick-fire fun question; a bit like a palate cleanser between the heavier morsels.

The Tribe responds

Erin was first up, with her question:

Financial services designed for use by women are becoming more and more common. They include investment platforms, insurance products, female-friendly credit and financial management tools. These services can help women feel included, learn about finances, and carry out their financial activities in ways that suit their lifestyles. This all sounds great. But you could also argue that offering financial services specifically to women is sexist. Doesn’t this approach just reinforce stereotypes of women as different from men, less financially competent, and need special help? What do you think? Is it sexist to offer financial services specifically to women?

Definitely sexist. Financial services should be gender-neutral. Somewhat sexist but companies should have the freedom to develop financial services using any gender stereotypes they like: think pink! Somewhat sexist and companies should be careful to not stereotype women. The more gender-neutral the design, the better. Not sexist at all. Companies develop products and services for specific consumer needs all the time. Irrelevant. We should take intentional measures to account for women’s needs in financial services because they have historically been left out.

Erin expected 3, 2, 4 to be the most significant responses, but #ourtribe offered a different perspective, opting for 4, 5, 3 leaving 2 as the least favoured response. What a great question, and one that could do with further unpacking, which we will be doing in the coming months. Having 60 seconds to respond provided a snapshot of our gut thinking, but with time to reflect, would the response be different?

Next up was Diana, moving from sexism to our climate emergency, soil depletion and mass extinctions, asking “Should we use money to buy people’s compliance?”

We are often told that our individual and collective behaviour must change if we are to address these issues - like flying less, buying products with less packaging, buying organic food, recycling etc.

Yes - we can solve these issues with taxes like a sugar tax on soft drinks - it’s important for the greater good of society to use fiscal measures as a way to correct the free market to address these wider concerns. No - personal freedom is paramount - we should all have the right to make our own decisions. Politics and policy are the correct tools to engage people on these issues of personal belief, not messing about with the free market. No - the idea of using money to buy people’s compliance is a moral peril - we might agree on the current aims (addressing climate change, say) but once this sort of mechanism is accepted, it could be abused, to encourage behaviours that would do harm. Yes - if the economic system were better designed and recognised the true cost of many externalities, the market mechanism would adjust prices and create behaviours that would resolve the social and environmental issues. Yes - we should be rewarding people financially for positive behaviours, like living within personal carbon budgets and penalising those who indulge in negative behaviours. This could be highly progressive - a way to divert money from the rich (who would continue to live as they pleased) to the poor (who would be incentivised to ‘earn’ money for good behaviour). No - financial solutions to this problem are always likely to enable the wealthy to continue to behave destructively, with the poorer masses forced to live without many choices that the rich take for granted. We need to use legal or other mechanisms to change behaviour equitably regardless of financial resources. No - the issue here really is one of education and awareness. People model their behaviour on cultural norms - propagated through entertainment and advertising. The only way to address this is to radically change our education system, and to insist on greater transparency through labelling on consumer goods, so that people can better understand the true link between their lifestyle choices and the impact on people and planet.

Diana did not offer a definitive view of her personal reading, saying that all are possible, and it really depends on the data we have and what we choose to believe. She expected the NO’s to lead, yet #ourtribe opted more for the YES responses, 47% versus 53%. However, this does show that we have a lot of thinking to do about this issue and there are many moral/ethical debates to have.

Next up was Sophie, forcing us to face up to choice.

You are in charge of a micro-loan product, providing fast, online approval for underbanked, low-income customers. This creates new revenue for the bank and strengthens credit history for the customers. You have recently discovered that your terms and conditions, whilst compliant with relevant legislation, aren’t providing customers with an understanding of their full repayment obligations - despite them clicking accept.

You are behind target this quarter and presented with a campaign to close the gap. Web analytics show the target segment for this campaign spend the least time reading the product's terms and conditions. For the campaign to have an impact this quarter, you must provide approval today. Do you approve the campaign?

Yes. No.

Sophie offered that both can be right, but what we should do is reflect on the reasoning behind our decisions. She offered mitigating circumstances for both answers, highlighting that the moral choice is really complex, and often even with binary responses it’s not easy to see all the scenarios for each of us. Whilst NO was the favoured response, is that because it’s not #ourtribe’s livelihood that depends on the outcome?

Martin opened up another can of worms, asking about automation and starting with the fact that most people end up making sub-optimal investment decisions. His question, “Is automation the answer from an ethical point of view?”

Proponents for automated investments talk about its potential to take out human biases that lead to poor decision-making. That people are more likely to make bad investment calls than machines, because investing requires the processing power that is found in spades in machines but not as much in humans. Also, removing the human factor could lead to reduced wealth inequality, as more people get access to lower cost but higher quality services.Those opposing automated investments argue that human intuition and experience trump technology. That human translation and sensitivity is needed to craft an investment strategy that fits to people’s lives and financial situation. Also, knowing that algorithmic bias is the subject of debate and concern: How do we know that the investment choices the machine is making is married to my values? Can we fully account for these variables in an algorithm? If not, do we care? So, is it more ethical to make investment decision-making more automated or less automated?

More automated - algorithms can make better investment decisions and reach more people which makes automatisation the morally right thing to do. Less automated - we lose something substantial by removing the human touch in investment decisions and more in risk of investing in morally suspect ways, making decreasing automatisation the morally right thing to do. No difference - there is no big ethical difference between human and automated investment advice. Irrelevant - ethics is not an important dimension to consider when comparing automated and human investment advice.

Martin was spot on in his assumption, believing that most people will have greater faith in more automated, algorithmic advice than they have in humans. In reality, as shown by the responses, #ourtribe were split, with just 1% difference between the two most voted for answers, with the ‘no difference’ and ‘irrelevant’ answers falling well behind. Clearly, there is a need for us as an industry - and as individuals - to discuss automation in depth, making sure that all voices are heard.

Pablo had another interesting question for our audience:

The financial sector is described by citizens mostly as an apolitical agent; one which only follows the trace of money. Banks have financed different parties whenever they saw a business opportunity in it, regardless of the legitimacy of the political issues. As we all know, current political, economical and environmental challenges require the involvement of large companies too, as companies are more and more described as social agents with a great change impact. Large consultancy firms and companies from all over the world take a favourable position in the face of pro-democracy and pro-rights movements, and show their outright rejection of acts and speeches that violate the charter of human rights.

No movement in this direction can be seen in the financial sector. On the other hand, we cannot ignore the fact that many social movements are based on western values. So a commitment to worlds banks to such movements could incur a form of financial ethno-centrism. So this is my question: should the financial sector engage with and finance pro-democracy and pro-rights social movements?

Yes, the financial sector must be a positive example to society and must finance pro-democracy and pro-equality social movements as part of its social corporate responsibility. Yes, the financial sector must review its internal culture and ensure racial, social and cognitive diversity, but is not obliged to finance any kind of social movement. No, the financial sector must be a neutral player and must not commit itself to any political cause. Banks are private companies and should have the freedom to manage their business as they wish.

Interestingly, Pablo surmised that the majority of responses would be for the option that Banks are private companies and should have the freedom to manage their business as they see fit. However, #ourtribe did not agree, clearly preferring the financial sector to ensure diversity without an obligation to finance any kind of social movement. We clearly feel that our sector can show a positive example, with the combined Yes vote comprising two thirds of the responses.

Our last expert was Gillan, exploring whether we still want humans in the loop, asking if there is any merit to having a physical trading floor, rather than just have everyone trade online?

Electronic automation of the trading floor started in the 1980 and since then each year fewer humans have been involved in the trade cycle of buying and selling. Modern high frequency trading, where a global trade can start and complete in less than 1/10th of a second, is one of the causes that amplifies significant market adjustments, including having a pivotal role in the crash in 2008. We are aware that increased automation means that companies don’t know who owns their shares at any point in time and that a majority of current owners are more interested in the shift of the share price than the long term performance entrusted to the directors and executive team.

Is your vision of the future more automation built on a trust that those who develop the data and the algorithms are not biased to their own outcomes. Are you someone who believes that humans should remain in the loop and be ultimately responsible, if that is even possible now. Do we demand more efficiency, preferring quicker, cheaper and faster or do we want to revert to timely thinking, considered understanding and analysis. Perhaps you want a blend and aiming for the best of both worlds that will deliver longer-term sustainable goals for the future.

Whilst we continue to learn and put in more rules for trading and how to prevent catastrophic failures the system is sufficiently complex that no one person can understand it or control it. The web of interdependence means that a degree of stability and control are guaranteed.

This along with the developmental thinking on ownership responsibilities with ESG reporting means we have to ask ourselves, is there actually any merit to having a physical trading floor where people deal with each other face to face, or should we move to a world where everyone trades online?

No - we can happily all live in cyber space. Not much - it helps to meet sometimes but it is not essential. It's a close call - there are benefits to both but they are different. I prefer to see other humans frequently because there are things I can learn. Trading with face to face teams is crucial. I don't care since I am actually a robot anyway.

Curious to see how many chose the robot answer! However, #ourtribe again wanted to be able to bring both sides of complicated arguments to the front. These decisions are not easy, which is exactly what Gillian predicted, and we all felt that the human element should remain in trading.

In summary

Ethics and morals are not easy and we don’t spend enough time with each other discussing how we all have valid opinions. In the midst of the global pandemic, we have lost the coffee machine/break time and have to create spaces to think about the unintended consequences together. Ethics and morals are not about rights and wrongs, but about what drives us. We need to reflect on what we make as choices and whether these drivers are right for ourselves, others and wider society.

Perhaps you have a view that you would like to share on the question or answers, or even pose your own question?

We have gathered data points from the session and over the next few weeks we will work to craft individual expert responses and see what else they tell us about #ourtribes gut responses.

Thank you to all those who voted, we hope it made you think!

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