UK Conduct Regulator Chair Supports New Standards for Data Ethics
07/11/2018Charles Randell, Chair of the Financial Conduct Authority and Payment Systems Regulator, delivered a speech on big data, regulation and data protection entitled, "How can we ensure that big data does not make us prisoners of technology?"
Discussing the risks associated with big data and artificial intelligence, Mr. Randell highlighted that in order to innovate ethically, thought needs to be given to the questions posed by big data, AI and behavioural science. In particular, the FCA Chair is concerned that technical innovation could increase social exclusion and reduce access to financial services if it was used, for example, to identify the most profitable or most risky customers.
The FCA Chair argues that the U.K.'s global leadership in both technological innovation and financial services could be strengthened through fair standards and public trust. He supports the development of new standards for data ethics and believes that the U.K. has an important role to play in establishing those standards. He suggests that three elements are necessary to achieve sustainable financial innovation - purpose, people and trust. The purpose of a firm, which is linked to its culture and values, would be important. In principle, data usages which serve the purpose of relevant financial activities with customers can be distinguished from those which serve only to deliver increased profits and which may not be expected by consumers. Mr Randell believes that regardless of the degree of innovation achieved, people must remain involved and be accountable for the outcomes reached by their innovation. Mr Randell posits that trust is the most important element for any financial services business. Firms need to create and maintain trust within their community and need to understand their community's views of the fair use of data. In addition, he suggests that trust requires good communication by a firm so that consumers can understand a firm's approach to using their data.
Finally, Mr. Randell states that the FCA and the PSR fully support the government's proposals to establish a Centre for Data Ethics and Innovation. The government announced the intention to establish the Centre in June, proposing that it would assist the government to identify what would be required to strengthen and improve the way data and AI are used and regulated. The Centre would issue recommendations, across sectors, for best practice and provide advice on plugging any potential gaps in regulation. The consultation on the Centre for Data Ethics and Innovation closes on September 5, 2018.
View the speech.
View the consultation on the proposed Centre for Data Ethics and Innovation.
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