At a time when the financial services industry is increasingly using algorithms to automate lending decisions, researchers at Newcastle University are to look at the impact on consumer trust.
Trust in financial technologies
The three-year, £1.2 million project will focus on trust in the financial technologies (FinTech) industry. A major growth area in the UK, companies in this sector promise new, cheaper and faster financial services through use of cloud and mobile technologies.
Bringing together researchers from Newcastle University’s School of Computing and Business School, the project also involves Atom Bank, the UK’s fastest growing FinTech company.
Ten years after the 2008 banking crisis, and following recent stories about data security, there are still poor levels of trust in the financial services sector.
The FinTrust project will look at the role of machine learning in banking, particularly in the context of automated lending decisions and whether these lead to financial exclusion.
Professor Aad van Moorsel, Head of the Secure and Resilient Systems research group in the School of Computing, explained: “Modern-day financial services increasingly rely on ‘robo-advice’, in which smart algorithms will make automated decisions about mortgages and other financial matters in seconds. But no-one knows if computers rather than humans making decisions increases the risk of bias against certain groups of people and whether this could lead to new forms of financial distress and financial exclusion.
“This innovative project will explore how consumer trust in banks and financial services can be enhanced while retaining the benefits of mobile banking that we now take for granted.”
The results of the research will be made available as a Trust Engineering Tool Kit, allowing FinTech service providers, regulators and consumer organisations to assess levels of trust and bias in automated advice.
It will also establish a stakeholder panel to advise regulators on the social and technical implications of automation in financial services, as well as a FinTech Network that pools expertise across academia and industry.
Dr Karen Elliott, Newcastle University Business School, said: “Recent media reports about the exploitation of personal data and high profile technology breakdowns have increased public awareness of some of the drawbacks of the digital age. At the same time, the success of new challenger banks like Atom shows that consumers want the convenience that the technology offers.
“The challenge is finding a way to use the technology in a secure but customer-focused way that doesn’t differentiate between particular groups if we’re to build trust in the services and companies we’re sharing our personal information with.”
Secure personal data
The FinTrust project, which also involves Dr Kovila Coopamootoo, lecturer in computing at Newcastle University, has been funded by the Engineering and Physical Sciences Research Council (EPSRC), now part of the newly formed UK Research and Innovation.
The project is one of eleven being funded as part of a £11 million campaign to support research in areas that present challenges in giving access to and using personal data.
Another project being funded is the Privacy-Aware Cloud Ecosystems (PACE) project, which involves Dr Raj Ranjan, Chair Professor of Computing Science and Internet of Things, Newcastle University, working with partners at Cardiff University and University College London.
The project will focus on the issue of people unknowingly sharing their data with others such as analytics companies and advertisers when using internet-enabled devices.
It aims to develop a mobile software ‘container’ that will securely log all instances where access to data is requested or shared. The research team hope that this will provide people with better information about how their personal information is stored and lead to greater trust between users and service providers.
Dr. Ranjan commented: “PACE innovations will transform how users interact with cloud-hosted application services. The project will further improve the trust and accountability of cloud services by developing novel mechanisms to log when users’ information is accessed. This will also help to ensure that future cloud services are GDPR compliant.”
Digital economy theme lead for the Research Councils Dr John Baird said: “The rapid digital technological changes that have already happened are already having profound effects on the way people live, individually and collectively.
“The advances in the interconnectedness of devices, data and people present both opportunities and challenges. Recent news items around how personal data can be obtained and used highlights the need for research that can understand the complexities socio-technical relationships while also safeguarding the integrity and usefulness of data.”
published on: 14 May 2018