It’s not the algorithm, it’s the ethics

Gary Shiffman and Christopher Wall

Journal of Financial Compliance, 2023, vol. 6, issue 3, 222-231

Abstract: Machine learning and artificial intelligence (ML/AI) technologies have transformed nearly every industry, helping to realise unprecedented efficiency and effectiveness in a variety of tasks once thought the exclusive domain of humans. The financial compliance industry, however, lags its peers in adopting ML/AI tools in spite it being readily available and promising to reduce costs for financial institutions. This paper argues that the reason for delay in adoption is not ignorance of the technology but the lack of a moral consensus around its use in financial compliance. The ethics and morality behind the adoption of ML/AI tools and why compliance professionals are discouraged from adopting it in their compliance programmes are explored. The paper introduces the trolley car problem and how this explains the lack of a moral consensus of the use of ML/AI in compliance. It then explores why, even though machines today can pass the Turing test, machines are not capable of making moral judgments, meaning humans remain responsible for the actions taken by ML/AI. This creates an unprecedented burden about making moral decisions without any real benefit to compliance officials who want to do good. The argument is that if regulators change the incentive structure away from conformity to saving lives, and making this the moral regime guiding the use of ML/AI, technology adoption would increase and allow the compliance industry to change the world for the better.

Keywords: machine learning; artificial intelligence; ethics; moral philosophy; Turing test; financial compliance (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hstalks.com/article/7660/download/ (application/pdf)
https://hstalks.com/article/7660/ (text/html)
Requires a paid subscription for full access.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2023:v:6:i:3:p:222-231

Access Statistics for this article

More articles in Journal of Financial Compliance from Henry Stewart Publications
Bibliographic data for series maintained by Henry Stewart Talks ().