Data Analytics Brings Ethical Dilemma

Artificial intelligence and data are a big part of many credit unions’ strategies. But should deliberations on ethical conduct, integrity and professionalism for operations research and analytics start taking place more often?

Data analytics is a swiftly developing, indispensable instrument in many industries and organizational areas. These include government, business and those working directly in professional roles involving quantitative decision-making. Credit unions, for example, can gain knowledge on members and boost their experience by offering innovative and personalized products and services based on quantitative analysis and decision-making.

However, controversies surrounding the inappropriate use of data, and headline-making reports of computer breaches, have contributed to the need to recognize and consider the ethical consequences of reckless or negligent data management.

“Even without negligence, the aggregation that is possible and the ability to re-identify individuals from their data that has been anonymized, creates issues,” Scott Nestler, CAP, professor at the Department of IT, Analytics & Operations, Mendoza College of Business, University of Notre Dame, said.

The Catonsville, Md.-based leadership group the Institute for Operations Research and the Management Sciences (INFORMS) promotes best practices and advances in operations research, management science and analytics to improve operational processes, decision-making and outcomes.

INFORMS, with over 12,500 members globally, also provides Certified Analytics Professional credentials, and developed a code of ethics and guidelines for professionals in operations research and analytics.

The need for ethical guidelines in the wake of technological innovation is not a new phenomenon. IBM, in a blog, “Include Ethics When Teaching Big Data,” written by Lee Sterrey in 2014, stated, “Access to new forms of data (social media, text analysis and internet data) external to the organization environment, when analyzed in conjunction with internal data, provides the ability to research, predict trends and ask questions that were not possible before.” However, it added, “Organizations therefore need to consider the context of their analysis from the data that they collect, in order to stay within ethical boundaries.”

Nestler, an active participant and evangelist in the development of both the CAP Code of Ethics and INFORMS Ethics Guidelines, shared his perspective: “From the corporate leaders, the business leaders, the credit union leaders, who are setting the mission, vision and the identity for their organizations, down to the people building the models to predict something with the highest degree of accuracy, all of them need to consider ethical implications of their decisions.”

Nestler pointed out many analytics professionals have been aware of ethical concerns for many years. “While a binding code of ethics is necessary for the CAP program, a set of aspirational ethical guidelines is more appropriate for the general membership and businesses generally,” he explained.

In an article, “Using INFORMS Ethics Guidelines in the Classroom,” authors David Hunt and Nestler noted the work done by members of INFORMS increasingly affects peoples’ lives as the use of algorithms and data models spreads, and as data collections become more detailed and personal. “Yet too often we become absorbed by the elegance of our models and research, failing to consider any potential ethical implications. Or, we find ourselves faced with a situation that seems unethical, and are forced to determine the best course of action without previously having established exactly what we consider to be ethical.”

INFORMS said it deliberately set up the guidelines, which often run no more than a sentence long, so organizations can repurpose them as a simple checklist and adapt them to their company vision and mission statements. Nestler indicated those words provide a flavor and foundation for analytics professional’s, or operations researcher’s, actions and principles.

INFORMS maintained that ethical conduct is an important consideration for experts in all fields and developed the guidelines to further the institute’s purpose to promote high professional standards and integrity. “We recognize a responsibility to uphold high ethical standards on behalf of society, our organizations and the profession,” it said.

Nestler also referred to the big picture approach of the recommendations. “Translating from the higher-level aspirational set of guidelines, [one should ask,] ‘What does that mean for what I am doing in the analytics space?’” Nestler said, adding, “It’s good to have a set of guidelines of what we want people to do, but you have to figure out how to apply it.” The guidelines were also intended to reflect each analytics professional’s role and meet specific compliance requirements at individual companies and organizations.

In assessing their personal and organizational ethical standing, Nestler noted one of the ways people have started assimilating the guidelines internally is with a series of questions that cover their policy from both regulatory and ethical standpoints.

The Notre Dame professor mentioned one of the things he does with his undergraduate and masters level programs is ask people to think outside their analytics box. He tries to get the researchers, technical people and code writers to consider if the data they are studying and using to build predictive models really represents people and not just columns of data. “At the analyst’s level, they need to be communicating and thinking about if we’re being asked to do something, not if it’s something we’re technologically capable of doing. But also, is it legal, is it ethical and is it something within the context of the organizational needs, goals and desires?”

The ethics guidelines fall into responsibilities for three broad groups − Society, Our Organizations and the Profession − where operations research and analytics are likely to have the greatest effect. “We didn’t set out to group them that way, they just sort of ended up that way,” Nestler said.

1. Society. Whereas operations research and analytics can have a deep impact on society, with applications ranging from medical decisions to national defense, business strategy, public policy, and many other contexts, we aspire to be:

• Accountable for our professional actions and the impact of our work;
• Forthcoming about our assumptions, interests, sponsors, motivations, limitations and potential conflicts of interest;
• Honest in reporting our results, even when they fail to yield the desired outcome;
• Objective in our assessments of facts, and irrespective of our opinions or beliefs;
• Respectful of the viewpoints and values of others; and
• Responsible for undertaking research and projects that provide positive benefits by advancing our scientific understanding, contributing to organizational improvements and supporting social good.

2. Our Organizations. Whereas our work influences the success and standing of our organizations (universities, businesses, government and nonprofit agencies) as well as our constituencies (students, clients, customers and suppliers), we aspire to be:

• Accurate in our assertions, reports and presentations;
• Alert to possible unintended or negative consequences that our results and recommendations may have on others;
• Informed of advances and developments in the fields relevant to our work;
• Questioning of whether there are more effective and efficient ways to reach a goal;
• Realistic in our claims of achievable results and in acknowledging when the best course of action may be to terminate a project; and
• Rigorous by adhering to proper professional practices in the development and reporting of our work.

3. The Profession. Whereas we are part of the profession of operations research and analytics, and have an obligation to help advance the profession and uphold high standards on behalf of our colleagues and future generations, we aspire to be:

• Cooperative by sharing best practices, information and ideas with colleagues, young professionals and students;
• Impartial in our praise or criticism of others and their accomplishments, setting aside personal interests;
• Inclusive of all colleagues, and rejecting discrimination and harassment in any form;
• Tolerant of well-conducted research and well-reasoned results, which may differ from our own findings or opinions;
• Truthful in providing attribution when our work draws from the ideas of others; and
• Vigilant by speaking out against actions that are damaging to the profession.