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Digital banking 09 Mar 2017

Big data and privacy: new ethical challenges facing banks

Digital technologies have brought change to the financial sector and with it, new ethical challenges for banks. However, in this new digital environment there is one thing that hasn’t changed: confidence, which continues to be the foundation of the financial business and puts customers at the heart of the banking business model.

This is the main conclusion from the event, “Man, Machines and Ethics”, organized by BBVA and the University of Navarra’s Enterprise and Humanism Institute. The event was divided into two parts. Professor Peppino Ortoleva focused his presentation on the myth of machines and BBVA’s Director of Institutional Relations Eva Piera discussed the new ethical challenges on banks in the digital era.

Eva Piera referred to the rapid adoption of digital technologies in society, the economy and of course, in the financial sector. In her presentation, she analyzed how new technologies – blockchain, cloud computing, artificial intelligence and biometrics – help financial institutions face a new wave of digital competitors and the changing consumption patterns marked by the millennials.

From an ethical standpoint, this digital environment offers opportunities and challenges. One that she underscores is “the impressive development of financial inclusion, key to propelling real improvements in access to financial services and helping people fully participate in economic life” and big data, which significantly improves the process of granting loans and generating business opportunities.

In order to maintain customers’ trust, companies must act with maximun diligence and responsability to preserve security, provacy and proper use of data. In this sense, companies face two major challenges: cybersecurity and ethical challenges that emerge from data protection.

BBVA’s Director of Institutional Relations stressed that customers need to perceive that they obtain a greater added value and better service by giving access to their data. It becomes a virtuous circle of trust where customers see that they get better products and services when they grant access to their data, leading them to continue allowing this access and facilitating knowledge.

From left to right: Jaume Aurell, Director of Instituto Empresa y Humanismo; Eva Piera, Global Head of Public Affairs at BBVA; Ricardo Martí-Fluxá, chairman of Instituto Empresa y Humanismo; professor Peppino Ortoleva; and Montserrat Herrero, member of the Academic Comittee of Instituto Empresa y Humanismo.

In her point of view, regulators play a fundamental role, but she warned that regulation alone is not enough: Internet users must behave responsibly.

Eva Piera underscored three main pillars of data protection. The first is the need for “clear consent” for the company to use personal data. The second pillar entails individuals controlling their own data. On this point, she emphasizes that users should be aware of how they store their data, how they manage it, and what their rights are.

The third pillar involves control by an independent authority. Authorities must establish the same security requirements for all payment service providers in line with international rules in order to ensure protections across countries.

Thus, “in addition to proper regulation and effective supervision, principles are needed to face the ethical challenges of digital transformation” so that “trust and reputation remain the pillars of the financial system”, in the words of Eva Piera.

The myths surrounding machines

Peppino Ortoleva also participated in the event held at BBVA City in Madrid. This scholar and historian on the theory of the media throughout recent times, from socialist literature in the 19th Century to the science fiction stories we find in the movies. In his opinion, “Modern myths have influenced our relationship with technology in a particularly profound way,” and “That’s why understanding these myths helps us understand the presence of machines in our lives better than many sociological surveys.”

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