Page 47 - Banking Finance April 2025

ARTICLE

limiting data collection and sharing, ensuring customer Inclusive, Ethical, and Responsible Use: Banks must
control, and providing transparent privacy policies. design and operate technology as stewards of society,
ensuring broad access and ethical outcomes. Products
Transparency and Accountability: Customers need to must be developed respecting human rights.
understand how their data is used, who has access, and Standardised guidelines for technology design ensure
protection measures. Open communication about data consistent ethical practices. Frameworks for handling
sharing, security protocols, and policy changes builds ethical dilemmas are crucial. Prioritizing ethical
confidence. Accountability is key; banks must respond technology use builds stronger customer relationships.
swiftly to breaches or fraud, notifying customers and
offering compensation. Dimensions of Digital Trust in Banking
Digital Identity and Authentication: Secure and user- Eight critical dimensions must be considered: cybersecurity,
friendly authentication is essential. Biometric safety, transparency, interoperability, auditability,
verification and blockchain solutions enhance security. redressability, fairness, and privacy. Both mechanical and
Strong authentication prevents unauthorised access and relational trust strategies are essential.
protects transactions. Secure digital identities are Mechanical Trust: Refers to systems delivering reliable
crucial for trust and KYC compliance. Banks should strive results (e.g., blockchain).
for digital inclusion and ethical practices in identity
management, ensuring data security and minimizing Relational Trust: Focuses on shared norms, expectations,
misuse. and transparency in technology application and
decision-making.
Data Integrity and Accuracy: Customers rely on
accurate and up-to-date data. Regular audits, strong
verification processes, and transparent reporting are Cybersecurity
necessary. AI and machine learning can detect Cybersecurity secures digital banking systems, mitigating
inconsistencies and automate data processing, risks of unauthorised access and cyberattacks. It ensures
improving reliability. data confidentiality, integrity, and availability. Robust
cybersecurity protects vulnerable customers. It establishes
Ethical Use of AI and Automation: As AI becomes
integral, ethical use is crucial. AI systems must be fair, accountability and enables oversight. Customers expect
transparent, and unbiased. Explainable AI allows secure digital services and demand visible commitment to
customers to understand decisions. Mechanisms for cybersecurity. Banks must communicate this commitment.
contesting AI-driven decisions are essential.
Transparency
Building Digital Trust: A Framework for Transparency builds trust and clarity around digital

Shared Goals operations. It reduces information asymmetry. It showcases
ethical decision-making. Banks should design for
Digital trust requires meeting shared goals across
geographies and use cases. A values-driven approach fosters transparency, tracking data usage and generating reports.
trustworthy technologies. Three key goals are essential: Transparency is a key activity in ensuring actions align with
customer values and regulatory expectations.
Ensuring Reliability and Security of Services:
Customers expect digital services to meet expectations
and protect data. Reliability is tied to trust. Banks must Privacy in Banking

be transparent about security standards and Privacy protects individual rights over financial information.
communicate how they are met. It safeguards against unchecked data processing. Achieving
Accountability and Oversight: Governance practices privacy requires accountability and oversight, ensuring data
are crucial. Banks must demonstrate accountability in is used for authorised purposes. Security measures protect
maintaining financial and societal stability. Oversight of privacy by preventing unauthorised access. Privacy programs
technology and data usage is essential. Clear must be integrated across functions, addressing strategy,
responsibilities and mechanisms for addressing failures policy management, cross-border data strategy, data
are necessary. lifecycle management, consent management, privacy by

42 | 2025 | APRIL | BANKING FINANCE