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The length of this article is 5256 words, and the recommended reading time is 40 minutesAt present, with the rapid iteration and integration of finance and technology, ethical issues have become the top priority of policy and market attention. On October 10, 2022, the People's Bank of China (PBoC) officially issued and implemented the Guidelines on the Ethics of Science and Technology in the Financial Sector, which provides the values and codes of conduct that need to be followed to carry out scientific and technological activities in the financial sector. On October 8, 2023, the Ministry of Science and Technology and ten departments jointly issued the Measures for the Review of Science and Technology Ethics (Trial), which has become the guideline for the prevention and control of science and technology ethics risks and the governance of innovation risks. In this context, it is necessary to re-examine the ideas and priorities of optimizing the ethical governance of fintech.Ethical Governance of Fintech in the New Context**
Yang Tao
Deputy Director of the National Finance and Development Laboratory.
Research Context of Ethical Governance of FinTechEthical governance of financial technology is the application of science and technology ethics in the financial field, which is generated and developed in response to the ethical and social problems brought about by the process of science and technology to promote financial innovation. The goal of ethical governance of financial technology is to use an effective institutional structure to highlight the role of the humanistic spirit and values, so that people's profit-seeking impulse is rational and transcendent, and vitality is in order, so that the development of financial technology is not only conducive to efficiency improvement and the development of the real economy, but also more inclusive and inclusive.
At the same time, the ethical governance of fintech should prevent the binary opposition between development and governance, and should form a situation in which "new rules of fintech governance with development as the core" and "new path of fintech development guided by governance" should be formed to promote the formation of a healthy complementary and mutually promoting relationship. Fintech ethical governance is not once and for all, after the establishment of a governance framework, it is necessary to continue to explore, rules to be constantly improved, and technical standards to be constantly updated.
In addition, the basic idea of ethical governance of fintech is to advocate cooperation and co-governance between different subjects to solve ethical and social problems in a diversified way. The ethical governance system of fintech is composed of various actors, and there is a multi-level and multi-directional interaction mechanism between various actors.
In summary, the current academic attention to the topic of financial technology ethical governance system is still shallow, and the overall framework needs to be built urgently. The existing relevant studies mainly involve the ethics of science and technology, financial ethics and Internet financial ethics, or the first issue of fintech risk supervision, and the systematic research on the ethical governance of fintech is still insufficient, especially considering that the overall architecture of fintech is quite different from that of traditional finance, and the context and framework of fintech ethics still need to be further sorted out. At the same time, the perspective of ethical governance of fintech close to practice is not prominent enough, the targeted countermeasure research is still in-depth, and the practical innovation is still relatively weak. Fintech ethics research is an applied research, and it is necessary to establish an interdisciplinary research method at the intersection of finance, ethics and computer science, rather than just staying at the level of normative analysis.
Fintech governance from abroadAt present, foreign fintech governance mainly focuses on the risks brought by data and algorithms. On the one hand,In the Internet era, residents' daily life is closely integrated with electronic products, and mobile phones have become an important carrier of residents' personal information, including identity, behavior, preferences and even various sensitive privacy information. As the most important resource in the context of the digital economy, data has extremely high value. Therefore, data risk has become a high-profile issue in the development of fintech. On the other hand,With the development of new technologies such as AI, the application of algorithms has become more extensive and in-depth. When the autonomy judgment of the algorithm deviates from the principle of fairness, it may lead to "algorithmic discrimination". The so-called neutral algorithmic decision-making criteria may calculate discriminatory results and cause damage to the interests of the public.
In light of this,In the face of many ethical challenges caused by fintech innovation, major developed countries and regions have followed the previous governance path of financial innovation, issued relevant laws and policy norms, and established relevant governance institutions, which are worthy of our reference.
For example, in the United States, in October 2017,U.S. Consumer Financial Protection BureauThe Guiding Principles on the Sharing and Integration of Consumer Financial Data (CFPB) have been issued, which strictly clarify the scope of the rights that third parties can access and use information related to consumers' personal financial data. Consumers can choose whether to allow third parties to access their personal data, and when third parties have obtained the right to store and use their financial data, they must disclose it to consumers in a timely manner, and the Principles are intended to protect the security, transparency and accuracy of consumers' personal data by restricting their rights in relation to financial data.
In 2016,Office of the Comptroller of the Currency(OCC) proposed the theme of "Responsible Innovation" and established an Innovation Office to support responsible financial innovation, and strictly regulate financial products and services that use cloud computing, artificial intelligence, big data analysis, distributed ledger and other high-tech financial products and services. In 2019, the U.S. Consumer Financial Protection Bureau (CFPB) launched the U.S. Consumer Financial Innovation Network (ACFIN) along with a number of state-level regulators. The purpose of the Innovation Network is to strengthen coordination and communication between federal and state regulators, to keep abreast of market innovations, to develop appropriate regulatory policies, to promote financial inclusion, promote fair competition in the market, and focus on combating fraud, discrimination and deception in the market.
Another example, in June 2021,European Advisory Group of Experts on Digital Ethics(UNESCO) published the Principles of AI Governance, which proposes six ethical principles for the application of AI in the insurance field, namely the principle of proportionality, the principle of fairness and non-discrimination, the principle of transparency and explainability, the principle of human supervision, the principle of traceable data governance, and the principle of robustness and performance. These are the principles of digital ethics developed by the European Insurance and Occupational Pensions Authority in the insurance industry, which further strengthen the ethical governance of fintech in Europe.
May 2018,European UnionIn conjunction with the introduction of the General Data Protection Regulation, the Data Protection Board (EDPB) was established to promote the harmonization of data protection requirements among EU member states and strengthen protection cooperation between countries. In September 2019, the European Insurance and Occupational Pensions Authority (EAIF) established a Digital Ethics Advisory Expert Group to assist the EASA in developing principles for digital ethics in the insurance industry, as well as to help address ethical governance issues in insurance pricing and underwriting. The members of the organization are mainly insurance companies, ** companies, law firms, accounting firms, European Association of Actuaries, European Consumers Union, etc., from EU member states.
October 2018,Monetary Authority of SingaporeThe Guidelines for the Provision of Robo-advisory Services were proposed, which clearly stipulated the supervision of algorithms. The Guidelines stipulate that the practical application of AI should meet the requirements of responsibility, morality, and fairness, that is, the supervision of robo-advisors should examine their ethics, which is equivalent to replacing moral constraints with a rigid system. In November 2018, the Monetary Authority of Singapore (MAS) issued the Guidelines on the Use of Artificial Intelligence and Data Analytics (AIDA) in the Financial Sector, which set out the FEAT principles to promote the fair, ethical and transparent use of big data, algorithms and artificial intelligence in the financial sector. In January 2021, the Monetary Authority of Singapore (MAS) released the FEAT Fairness Principle Assessment Methodology, which adds an assessment dimension to the original assessment methodology, and evaluates the fairness principle from five aspects: system objectives, data and models, system impact measurement, personal data use, and continuous monitoring.
Challenges to the ethical governance of fintech in ChinaThe rapid development of new technologies has greatly changed the way financial risks are generated, exposed and spread, making the traditional financial service ethics no longer able to adapt to the rapid development of financial technology practices. While data and algorithms bring great convenience to people, they also bring obvious ethical problems, and then become a "hotbed" for financial risk derivation. The problems faced by the ethical governance of financial technology in China are not only global common challenges, but also contradictions with their own characteristics.
First, the ethical regulatory framework and governance system of fintech at the national level are not yet perfect, and the rigid constraints on responsible entities such as financial institutions are not strong. Ethical governance and financial supervision are closely linked, and the legal and regulatory system for financial technology ethics has not yet been established, and laws and regulations to promote the substantive implementation of ethical principles and rules have not yet been promulgated. As a recommended industry standard, the "Guidelines on the Ethics of Science and Technology in the Financial Sector" has not formed a rigid constraint on financial institutions, and many requirements have not yet been substantively implemented, and the data governance system still needs to be further improved. At present, the data management system for financial institutions, technology companies and third-party data service enterprises needs to be further refined, and the accountability for violating fintech ethics needs to be strengthened.
Second, the organizational structure and institutional norms of financial institutions have not yet been established, and the ability to prevent and resolve ethical risks in fintech activities needs to be improved urgently. Keywords such as "fintech ethics" or "science and technology ethics" are not mentioned in the annual reports and social responsibility reports of most financial institutions in China, and science and technology ethics have not yet been incorporated into the comprehensive risk management system, and the importance of fintech ethical governance needs to be strengthened. Most financial institutions have not yet established enterprise-level fintech ethics committees, and most of them carry out scientific and technological ethics governance within the traditional risk management framework and consumer rights protection framework, and have not yet established normalized working mechanisms such as scientific and technological ethics review and information disclosure, resulting in problems such as vague responsibility boundaries, unclear implementation paths, and imperfect institutional systems. At present, financial institutions mainly rely on expert experience and manual operation to carry out scientific and technological ethics review, which is difficult to detect and effectively prevent problems such as privacy protection, product fairness, and service discrimination of financial innovation products in a timely manner. At present, some financial institution apps have not yet completed the transformation for the elderly, and some APPs only stay in simple function upgrades such as enlarged fonts, without providing differentiated services and exclusive functions for the elderly, and the entrance settings are complex, resulting in many obstacles in the use of special groups, coupled with the backward digital infrastructure in remote areas, there is still a gap in the financial service needs of long-tail people, and the problem of "digital divide" still exists.
Third, the self-discipline system of the fintech ethics industry is not yet perfect, and the self-discipline and supervision role of industry organizations needs to be strengthened. Perfect supervision and industry self-discipline are one of the important driving forces for the healthy development of the fintech industry, but the current self-discipline system of the fintech industry is still not perfect. At present, a national fintech ethics committee has not yet been established, and there may be problems such as self-discipline gaps, self-discipline duplication, and inefficiency in the regional industry organization system. Several local fintech ethics committees have been initiated by branches of financial regulatory authorities, which were established relatively late, and have not yet formed a self-discipline system with deep integration of industry, university and research, and the influence and authority of the industry need to be improved. Fintech ethics committees in other regions are still in the state of preparation.
Fourth, fintech ethics education, training and publicity are in their infancy, and the ethical awareness of fintech talent needs to be improved. In 2022, the new edition of the National Occupational Classification Dictionary added a new profession for financial technology specialists, but the current identification, training and evaluation system for financial technology practitioners has not yet been established, resulting in a relatively lagging construction of financial technology ethics education and training system. In particular, the fintech talent training system in colleges and universities is still in a state of exploration, and the attention to fintech ethics education is insufficient.
Fifth, financial consumers do not have a deep understanding of fintech, and their ability to identify risks and protect themselves needs to be improved. According to the Consumer Financial Literacy Survey and Analysis Report (2021) released by the People's Bank of China, the financial literacy level of Chinese residents is at the upper middle level in the world, especially in terms of basic financial knowledge. At present, China's education of financial consumers is in the popularization stage, especially the lack of information security and data security education for the public, and the enthusiasm of financial consumers to actively participate in the moral and ethical supervision of financial technology is not high.
Countermeasures to improve the ethical governance of financial technologyFirst, data ethics governance is the core. In the context of the booming digital economy, data is the core of financial technology and has increasingly become a fundamental strategic resource. Due to its special attributes such as non-competition, non-exclusivity, easy replicability, and decentralization, typical issues in the field of data ethics, such as data standardization, data quality, data circulation control, data privacy protection, and sharing and openness, have increasingly become the focus of international attention. In major countries and regions around the world, many laws and regulations, governance mechanisms, and institutional rules related to privacy protection have been improved and amended, and many countries have invested in the exploration of the construction of data ethics frameworks. China is facing a complex exploration from data elements to data assets, and it is more necessary to comprehensively innovate, build and improve relevant systems and governance mechanisms.
Secondly, take arithmetic governance as the starting point. With the improvement of the system, in the future, the regulatory authorities should gradually explore the ethical evaluation of the algorithm models used in financial innovation, ensure that the algorithms are explainable and conform to the principle of fairness, and try to incorporate ethical elements in the development and design, update iteration and specific application of relevant products. At the same time, strengthen the application of rules such as the "Guidelines for the Classification of Financial Data Security" and the "Specifications for the Evaluation of Financial Applications of Artificial Intelligence Algorithms", refine the content of constraints, rights and responsibilities, and formulate data management systems for fintech companies and other third-party data service enterprises and financial institutions by focusing on difficult pain points as a breakthrough, so as to ensure the guidance and effectiveness of ethical norms, comprehensively and reasonably carry out risk identification and eliminate arithmetic risks.
Thirdly, it is carried by the ethical governance of the subject. Efforts should be made to clarify the main responsibilities of financial technology, vigorously strengthen the ethical construction of financial technology entities, and strengthen behavioral norms and moral education at both the enterprise level and the talent level. Financial institutions and technology companies need to improve the awareness of fintech ethics, formulate ethical governance systems, and strengthen the construction of systemic ethics. Continuously adjust and optimize the internal information technology system, formulate data collection, use, and protection processes and internal algorithm risk management systems that meet the requirements of the ethical principles of financial technology, and reasonably balance the relationship between commercial interests and ethics; Keep abreast of new trends in fintech ethical standards and standards, and dynamically adjust and update the fintech ethical management system according to cutting-edge changes in technology and business, so as to ensure the guidance and effectiveness of the system.
In addition, it is based on customer ethical governance. It is necessary to accelerate the establishment of ethical awareness of financial consumers, and we can learn from international experience such as the Digital Skills and Employment Alliance Program launched by the European Union, and guide consumers of fintech products to pay attention to and understand the rights and interests of financial consumers and the ethics of fintech through various methods such as social publicity, public discussion, and community education, so as to enhance their sensitivity to fintech-related ethical issues, and improve consumers' awareness of the protection of rights and interests and ethics in the field of fintech. Make them actively participate in the process of supervising the construction of fintech ethics, and finally form a conscious awareness and a good atmosphere in the field of fintech, the financial industry and even the whole society to standardize data collection, respect privacy protection, and equally safeguard rights and interests. At the same time, from the demand side of the digital finance era, the high-risk nature of financial technology determines that financial consumers need to continue to learn and keep pace with the times in order to correctly understand financial activities, identify financial risks, and better protect their own rights and interests.
Finally, it is guaranteed by the ethical governance of supervision. In the process of ethical governance of fintech, regulators also need to optimize the ethical principles of behavior in a timely manner. The first is to grasp the "seesaw" of efficiency and safety, which is also a common problem faced by global financial regulators, especially in the "frontier field" of fintech innovation, and sometimes it is necessary to grasp the time and space boundaries of "letting the bullets fly" from an ethical perspective. The second is to grasp the balance between institutional rules and policy guidance. One of the core objectives of supervision is to effectively prevent risks, especially systemic and regional risks, and promote the sustainable and healthy development of the financial industry. Sometimes, however, regulators also take on the role of national policy guidance, perhaps as a precondition for improving risk tolerance. Therefore, in terms of policy priorities, directions, and scales, it is also necessary to rely on some ethical principles to "trial and error". Third, many risks and ethical challenges in fintech innovation actually arise from intersecting, overlapping or blank areas of supervision, so it is more necessary to strengthen regulatory coordination, which also requires different regulators to form an ethical consensus.
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National Laboratory of Finance and Development, Chinese Academy of Social SciencesIt was established in 2005 and was formerly known as the "Financial Laboratory of the Chinese Academy of Social Sciences". It is the first national-level financial think tank in China that crosses both social and natural sciences. In June 2015, on the basis of absorbing a number of other new think tank research institutions of the Chinese Academy of Social Sciences, it was renamed as the "National Finance and Development Laboratory". In November 2015, it was approved as one of the first 25 national high-end think tanks by China.
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