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Data ethics

What is data ethics?

Data ethics is a branch of ethics that evaluates data practices—collecting, generating, analyzing and disseminating data, both structured and unstructured—that have the potential to adversely impact people and society. It includes addressing and recommending concepts of right and wrong conduct, with transparency in and defensibility of actions and decisions driven by automated/artificial intelligence (AI) in relation to data in general and personal data in particular.

What are the business benefits of data ethics?

With AI algorithms becoming more commonplace, and without regulated codes of ethics, businesses need to create and maintain a structured and transparent data ethics strategy, which can yield three important business benefits:

  • Trust. Businesses that apply the key ethics principles of fairness, privacy, transparency and accountability to their AI models and output can retain trust in how they use their data—and thus build greater goodwill and loyalty, which enhances their reputation and brand value. 
  • Fair practices. Unintended bias can creep in from anywhere and negatively impact business decisions. Companies that adhere to data ethics principles and standards can demonstrate their fairness in decision-making. 
  • Data privacy compliance. Existing data privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) do not directly address ethics, but there is a significant overlap between key privacy requirements, such as lawfulness and accountability, and the principles of AI ethics. Thus, ensuring ethical AI helps ensure data privacy compliance.
Why is data ethics important?

In the midst of a worldwide trust revolution, trillions of dollars are at risk; ethical behavior is the new theater for commercial competition. Half of consumers are willing to pay a premium to transact with companies they trust. And 57% will stop doing business with a company they believe has broken their trust by using personal data irresponsibly. Businesspeople have always had to consider ethical issues. But in these unforgiving times, getting data ethics wrong has greater consequences than ever before.

How can data ethics engender trust in customers?

The biggest threat to companies today comes not from the competition, but rather from their own inability to win and keep consumer trust. The increasing importance of data has changed not only how companies deliver products and services, but also how consumers make decisions. To build trust at every touchpoint throughout the customer journey, senior executives must ensure their companies have the right leadership, culture, organizational design, operating model, skills, technology and processes.

Here are a few guidelines to win customers’ trust in the new digital world:

  • Ensure “gives” and “gets.” Where there are manageable “gives” and positive “gets” for consumers, sharing information is a no-brainer. However, if the “get” factor is wrongly imposed—such as asking consumers to accept terms without explaining the ramifications—trust can be instantly and badly damaged. Therefore, clear and open communication regarding give-to-get trade-offs are the foundation for creating the needed transparency that makes it worthwhile for both the company and its customers. 
  • Give customers a delete button. Customers should have a complete 360-degree view of their information and full control over it. A good example is an e-monitor that enables cardiac patients to control how much data goes to whom, using a browser and an app. Patients can set up networks of healthcare providers, family members, friends, fellow users and patients, and share their desired data with each. 
  • Be quick to respond to failures. In spite of world-class technology infrastructure, history shows that organizations can’t promise customers that nothing bad will happen to their digital information. Winning organizations need to recognize, understand and proactively manage potential issues. For instance, after a recent cyber-attack, a communications provider was quick to notify customers and banks of the incident, which helped maintain consumer trust and confidence.
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