The ethics of big data

Tuesday 27 July, 2021

by Anonymous

You’re a graduate and have been rotated to the data analytics team at a retail bank. The team you’ll be working with have done some work putting historical datasets into an AI tool to identify a customer cohort that would be a fruitful customer base to market a new home loan rate to.

The data has included things like levels of education, historical buying patterns, number of dependents and historical credit scores that flag vulnerable customers.

You question whether this approach is in line with the customer-centric values of your organisation.

As a graduate this is making you feel uncomfortable about the assumptions being made – surely everyone deserves the opportunity to apply for a home loan. When you raise it with your team, they assure you it has been signed off by Legal.

What would you do?

We challenge you to create a healthy discussion with your colleagues and post a comment below. You could even encourage them to consider taking The Banking and Financial Services Oath!

Please share your ethical dilemmas with us - we can post them anonymously. You can email your dilemmas to dilemma@bfso.org

Photo by Fabio on Unsplash

Comments

There are 5 comments for The ethics of big data.

Re: The ethics of big data

Tuesday 27 July, 2021

by Carlos

While this looks like a positive way of ensuring vulnerable customers aren't put under further pressure, I don't think this is fair and equitable for people who may be able to service a mortgage in the present. They shouldn't be disadvantaged for an historical bad credit score.

Re: The ethics of big data

Thursday 29 July, 2021

by Michelle

I agree with Carlos. This seems like a one size fits all risk lens being used. If a vulnerable customer has worked to build their financial security and then denied a loan, they may be forced to apply at an organisation willing to take the 'risk' who charges higher interests rates and therefore the cycle into vulnerability begins again - is that fair?

Re: The ethics of big data

Thursday 29 July, 2021

by Bart

Depends on whether the customer information was collected with customers' consent. Assuming it was, then commercial lending decisions based on that information are fair.

However, it is not helpful in the long-term (for the individuals or society) to provide vulnerable people with loans accruing interest. Not saying society shouldn't provide funding options to help vulnerable people, particularly for housing, just not interest bearing loans from profit seeking financiers.

This is also not an argument against the many successful microlending campaigns undertaken in developing countries.

Re: The ethics of big data

Tuesday 10 August, 2021

by Michael

question whether this approach is in line with the customer-centric values of your organisation.
Data analytics provide means to insights, and there's always different applications and decisions on How the insight is used.
Flagging vulnerable customer could means exercise Lending responsibility of not putting them in a worse position; or go extra miles to provide more assistant to ensure they can get a loan and mitigate the likelihood of putting themselves in a worse position in the future.
My challenge or healthy discussion would be around what do we do with the information?
How can we use what we know to better serve vulnerable customers?
How can we help them to mitigate their risks... etc?

Re: The ethics of big data

Tuesday 7 September, 2021

by Michelle

None of these data elements would actually identify customer vulnerability effectively. Good luck with the use case.

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