The formidable power of technology needs sustained human guidance in order to be ethical and empowering. At a Reuters Newsmaker in London, FCA chair Charles Randell outlined what we ought to think about.
Technology can lead us into a brighter future, but only if it’s deployed and used responsibly.
In his first major speech since assuming his role in April 2018, Randell explored how society can “make sure that our financial future is not…governed by rules set by unaccountable data scientists and implemented by firms who may not even understand how these algorithms work.”
Overall, Randell highlighted three recent developments that have made technology such a powerful factor in society:
- A wealth of data: Rapid advances in the ability to store data cheaply have meant ever-larger and more-detailed data sets, and the Internet of Things is going to create even more data. A small number of big corporations control most of the data.
- Artificial intelligence: Vast improvements in processing power mean corporations can mine data sets for more complex patterns, and then use them to target individuals with more sophistication than ever.
- Behavioral science: As firms understand more about human behavior, they can exploit decision-making bias.
In order to properly channel the intimidating power of technology, Randell recommend firms keep three things in mind.
- Purpose: “Purpose is the most important lens through which to examine technological innovation,” Randell said. “Is the purpose of the firm, is the purpose of its innovations, to create long-term value by helping consumers, or is it simply to maximize revenue by exploiting consumer bias? Value creation which helps consumers will be part of a sustainable business strategy. Maximizing revenue by exploiting consumer bias is unlikely to last long, and it’s unlikely to end well.”
- People: “We must remember that however sophisticated automated processes may become, people must remain involved at all stages,” Randell said. “People must be at the center of a firm’s purpose. People must be accountable for innovation through sound systems of risk management, governance and control…Technology needs to be implemented with human judgment in all aspects of its use. People, not machines, need to understand and control the outcomes the technology they’re designing is producing. People, not machines, have to make the judgment as to whether these outcomes are ethically acceptable and don’t just automate and intensify unacceptable human bias that created the data of the past.”
- Trust: “Trust is the most important asset of any financial services business. Creating and maintaining trust also requires that firms are part of the communities they serve, share society’s values and communicate well. Firms need to be part of the communities they serve so they can understand society’s views on the fair use of personal data. These views are complex and changing. You can’t design an algorithm that will tell you what is fair.”
Watch Charles Randell’s Newsmaker event in its entirety and explore past Newsmaker events with the likes of Paul Ryan, George Hinton and Isabel dos Santos.