Ethical Issues in Artificial Intelligence Applications in the Financial Industry - Solutions from Auditing Services

Abstract

The purpose of this thesis is to discuss ethical consequences that can occur with the use of AI technology in the financial industry. The thesis employs a number of ethical issues related to AI in the financial industry, specifically the effects and approach of auditing services in this field. Effects of AI on customers and operations are discussed during the digital transformational era. The current and suggested solutions to decrease unintended ethical consequences of AI are introduced. The roles of internal and external auditing services, and existing regulations in AI and ethics are indicated.

By maintaining an interpretive grounded theory approach, it is concluded that the relationship of AI and ethics with auditing companies can be strengthened, if the necessary standards are released by the European Commission (EC) and the auditing of AI applications is made mandatory. Secondly, a principal-based framework for auditing companies is suggested in this thesis to help external auditors. It consists of eight basic elements which are created based on the responses received during the interviews. Thirdly, even though the EC has released some principles and a new white paper on AI, it is proposed that they need to go beyond these recommendations since companies need to get specific standards in order to follow them properly. In line with the outcomes, suggestions to the European Union legislations are proposed.