Ethics and the digital economy

Published August 16, 2022, 5:20 AM

by Wilma C. Inventor-Miranda


Most of us if not all are into shopping online. If so, we may have experienced one time or another that we were short-change in our purchases. Prevalent nowadays is the proliferation of fake websites, fake products, goods not delivered or poor quality. In 2021 alone losses to online payment fraud were estimated at 20 billion US dollars ( April 1, 2022)

In the financial industry, there is a race in adopting new technological advances that will deliver valuable customer benefits. However, these advances are also driving significant increase in various risks that must be mitigated if not altogether eliminated. The issue of the “Principles of Reciprocity” for sharing customer data with third-party providers for credit checks is also bringing to the fore the effort in protecting customer data (source: dated March 2019). The use of online and mobile transactions is expected to increase steadily between 2021 and 2024, with the Asian market being the largest ( source: 6.10.22)

There are also incidents lately of data breaches of fraudulent use of bank accounts and in social media the unauthorized sharing of data by social media platforms.

Algorithm’s biases which are often technical problems can also pose a problem.  Amazon in 2018, for instance discovered that there is a bias in their recruitment towards men and less women. This is not intentional but a technical problem which every company should be aware of.

We might be giving away humanity to machines such as Artificial Intelligence if the necessary safeguards are not in place or if safeguards are already overtaken by the speed that which technology advances. We might also be allowing fraudulent transactions to victimize innocent people.

But even with the advancement  in technology and its availability does that mean that we have to join the bandwagon even with the dangers of imminent risks? This calls for ethical and cost considerations.

You can look at it this way. Without proper internet governance, internet is controlled  by a few. In some countries it is controlled by the government and globally by the big 4 – Facebook, Google, Apple and Amazon.

Digital technology has the ability to influence socioeconomic life of the world and the one who has the power to control are the designers of the application. Thus, we who are merely users are at their control. And if these powers are not monitored and properly governed – for instance our personal data being sold to some big marketers – we are a pawn in the hands of these powerful designers – helpless and mere objects to be used to bring in more profits to their companies and to achieve their own personal agenda.

Therefore, there is a need for an ethics body or committee – to perform governance or act as a consultative body for an early and regular monitoring of new technological innovations. Before any innovations are released in the market, this should go through this ethics committee, making sure that the users will not be mere guinea pigs or worse, hapless innocent users of the system being taken advantaged by innovators who maybe out there to just increase their bottom-line and racing for their companies to have a competitive edge over other innovators or competitors without regard to the risks.

There is therefore this need to establish regulatory guardrails that should be provided even ahead of any new technology adaptions. Quoting Gian Malgieri (professors at EDHEC business school in Lille who studies AI regulation and automated decision making) recounting the story of the fable of a frog in a saucepan full of water (frogs enjoy being in the water as we all know) but little does the tiny creature knew that  the water is slowly brought to a boil, and does not realize it is going to die until it’s too late.

Without proper ethics governance, we might go the way of the frog – technology controlling humanity – and it may be too late to do anything about it  later when we realized that the one thing we enjoyed the most is the very thing that will lead to the downfall of humanity.

In our next FINANCIAL EXECUTIVES INSTITUTE OF THE PHILIPPINES GENERAL MEMBERSHIP MEETING ON August 17, 2022 Wednesday, we will discuss this interesting and relevant topic of “ETHICS AND DIGITAL ECONOMY”. For members, this will be for free with lunch for FINEX members and with a fee for non-members in a face-to-face General Membership Meeting in New World Hotel with no less than the Country Head in the Philippines for Cloud Intelligence MR. ALLEN GUO organized by the Ethics Committee in cooperation with the Programs Committee of the Financial Executives Institute of the Philippines. For details, please contact (Alex Canon) [email protected] or (Alec Santiago) [email protected]

(Wilma Miranda is a Managing Partner of Inventor, Miranda & Associates, CPAs, Chair of the Ethics Committee of FINEX, Treasurer of Negros Outsourcing Services, Inc., and member of the Board of Directors of KPS Outsourcing, Inc. The views expressed herein do not necessarily reflect the opinion of these institutions.)