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The Hoffmann Global Institute for Business and Society


Ethics in the Age of Digital Finance


The Hoffmann Global Institute for Business and Society

Ethics in the Age of Digital Finance

Ethics in the Age of Digital Finance

With the rise of cryptocurrencies, contactless payments and FinTech, what are the ethical opportunities and challenges raised by the digitisation of finance? Virgile Perret from Observatoire de la Finance shares more.

On 31 March 2021, the Observatoire de la Finance (Geneva) and INSEAD’s Hoffmann Global Institute for Business and Society jointly organised the webinar, Ethics in the Age of Digital Finance: Issues and Challenges. Offering an opportunity to engage in a stimulating discussion on how new technologies impact financial services, the webinar discussed ethical opportunities and challenges. It also introduced the audience to the global Ethics & Trust in Finance for a Sustainable Future prize, initiated in 2006 by the Observatoire de la Finance. Speakers and panelists included leading experts from academia and relevant industries, as well as two previous winners of the abovementioned prize.

INSEAD Deputy Dean, Peter Zemsky, kicked off the webinar by discussing two important trends: on the one hand, accelerated by the pandemic, is the digitalisation and the data transformation of business and society; at the same time, there is an increasing awareness and urgency to pay attention to the practice of responsible and sustainable business.

The finance industry is at the intersection of these two trends. Leading technologies are giving more power to business leaders to address fundamental issues of social progress and sustainability. However, there are also many moral hazards and complexities that can make market mechanisms difficult. It is challenging for existing regulations to keep up with the change. This is why, as Zemsky stated, there is a critical need for the ethical practice of finance.


In his presentation about the ethical concerns raised by digitalisation of finance, professor Paul Dembinski started by reminding viewers that the virtual world created by digitalisation, made of data, graphs and all kinds of metrics is only a mere reflection of reality and at times a distorted one. In finance, as in any place where digitalisation tends to take over, the first ethical concern is not to lose contact with reality.

He went on to explain that artificial intelligence, big data and machine learning are all tools widely used in finance that allow for automated decision-making. Due to the complex nature of digitisation, it can result in blurring of responsibility, but the decision to use such tools must be based on ethical diligence and should ensure accountability. While it is convenient to claim that things are outside of one’s reach and the system does not allow for such measures to be put in place, such an approach also challenges the ethics and weakens the sense of responsibility.

Finally, the distance between what a person does and the consequence of their deeds tends to extend with digitalisation. If left unaddressed, this “moral distancing” may lead to a moral regression, which is why we need to build awareness of ethical issues in finance.

Some of these ethical concerns were discussed in the Round Table that followed. Brett Scott stressed the fact that one aspect of the automation of finance leads to what he calls the ‘re-skinning’ of finance - all the apps and all the kinds of digitalisation of the external layer of finance – that may alter the mentality of the people approaching the financial sector. They potentially reduce ethical awareness of customers who previously might have had some understanding of what was going on behind the scenes.

The automation of finance calls for a renewed ethical inquiry, according to Dr. Marta Rocchi, who defines ethics as, “the theoretical and practical study of human behaviour to achieve personal excellence and contribute to the good of society.” She pleads for an approach of ethics in finance agent-centered (as opposed to act-centered). For the current structure of ethics in finance, it is important to make the agent aware of their responsibilities as the centrality of the human is still there, even if there is a lot of automation.


Paul Dembinski, Director Observatoire de la Finance

This kind of ethical inquiry would have a big impact on our educational systems: we would need to keep teaching the basics, and at the same time have a standalone finance and ethics module in each program for continuous professional development in finance or in higher education.

Based on his experience at Euroclear, Stephane Bernard explained that digitalisation tends to increase self-service, while also helping the financial industry to develop a more value-based approach by increasing client interaction, focus and intimacy. He highlighted that ethics must be viewed as a non-competitive advantage of the sector. Therefore, if the actors are competing for products and services, they should look at ethical behavior as something that is serving the common good.

Josina Kamerling concluded the webinar by stressing that digitalisation is both a tool and a danger, and we need to realise that ethical behaviour is leading us to be accountable human beings living with our footprint in this world. It is not entirely about shareholder value anymore, but about the stakeholder concept. This is where the ethics debate is centered - on change in society.

Missed the webinar or want to watch the full sessions again? Watch it here.

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