module six Flashcards
Impact of unprofessional and unethical behaviour
undermines the trust in financial organisations and can trigger instability in the economy
Chartered bankers strategic purpose
a view to rebuild trust and confidence in banks
Rules-based code
defines the rules expected to be followed leaving little room for misunderstanding.
Principles-based code
They are more flexible meaning professional judgement is needed.
The code
expected to work in a fair and honest manner if breaches the code they could be subject to disciplinary action
Principle 1
Customers - treating with respect includes being polite in all forms of communication, also includes being sensitive to circumstances and specific needs
Colleagues - disrespectful behaviour includes bullying and harassment as well as treating colleagues unfairly or discriminating against them
Counterparties - respecting counterparties also involves not deceiving them. Also, entering a manipulative or exploitative financial relationship with anyone would be disrespectful.
Respect - treating people respectfully not only face to face but behind their backs too as well as challenging other colleagues on their behaviours.
Integrity - maintaining consistently high moral standards.
Principle 2
Duty to be competent - an ethical duty because customers and counterparties have a right to expect competency.
Taking responsibility - failing to act responsibly is unethical because if things go wrong it effects everyone. It’s important everyone’s responsible in their actions and advice but also take responsibility for their implications for others especially if a mistake is made.
Being accountable - your responsible for the things that happen as a result of your actions.
Principle 3
Compliance - requirement bankers are open and cooperative with regulators providing with any information they require.
Openness - not only must they never mislead the regulators, they must cooperate in a genuine spirit of openness.
Principle 4
Identify customers interests - deciding what’s in a customer’s interest involves listening to their description of their needs and circumstances and applying expertise to whatever products/services they may be considering.
Apply judgment - apply judgement and read between the lines of what the customers saying to some extent.
Pay due regard - don’t do something unethical because it’s in your customers interest as it would be paying their interests more regards than due.
Be impartial and fair - includes not allowing personal interests to get in the way of the customers interests.
Principle 5
Ensure that behaviour doesn’t get in the way of the good and fair operation of markets.
Principle 6
Honesty - dishonest behaviours include intentionally deceiving or misleading people as well as including cheating behaviours.
Trustworthiness - crucial to the success of banking so customers can trust banks.
Impartiality - conflict of interest arises when a personal interest conflicts with a legitimate duty. Conflicts of interest threaten impartiality and ability to fulfil duties of your role.
Principle 7
Confidentiality - confidential information may not always be marked as confidential. There may be circumstances someone may ask you to keep information confidential however you have no duty to do so as in some circumstances a breach of confidentiality may be justified.
Ethics
Encourage thoughts around living a good life, rights and responsibilities and moral decisions.
Moral absolutism
The view that some things are always right and some things are always wrong.
Moral relativism
Says that what is right or wrong is what the majority of people view and is related to the particular place and time.
Ethics based on consequences
Utilitarianism - a theory based on consequences. ethically right choice is the one producing the most happiness for the largest number of people.
An objection to the theory
Never know how things are going to turn out meaning it’s difficult to judge the rightness or wrongness however its argues we should judge the result on the expected consequences
Ethics based on duty
Deontological - something that is necessary. Distinctive as actions are made right by something other than consequences. Only an action done with good intentions is a right action regardless of the consequences.
Virtue ethics
trait or quality considered morally good.
Ethical dilemmas
instances of unprofessional and unethical behaviour can compromise ideas of what’s ethical and professional.
Organisation’s values
includes ethical values guiding the way the business is done and tells us what the organisation thinks is acceptable.
Ethics policy
organisation’s commitment to high ethical standards
Code of ethics
document showing the organisations values and commitments to stakeholders setting out behaviours expected of employees.
Code of conduct
tell employees about rule and regulations to follow.
Moral sensitivity
being aware of how actions affect other people, being aware of the different courses of action and how each of these could affect people.
Moral judgement
about judging which option is the most morally justifiable.
Moral motivation
importance we place n moral values compared to others. Could be a problem if were not sufficiently motivated to put moral values higher up on our priority list.
Moral character
about having courage, conviction and confidence as well as resilient and persistent.
Whistleblowing
a whistleblower doesn’t need to be currently employed by the organisation with the problem needing to be significant and the report made to someone outside the normal channels, someone in the position to take action.
Internal whistleblowing
when information is kept within the organisation but passed on outside normal channels.
External whistleblowing
when information is passed outside the organisation. It could be a professional body, an independent agency, or to the press.
What’s considered whistleblowing?
when someone raises a concern about danger or illegality that affects others. Also, they rarely have a personal interest in the outcome and aren’t directly affected.
Customer support
processes and ‘chatbots’ are cheaper and more efficient than employing people to carry out certain customer support activities.
Risk assessment
algorithms used to accurately predict risk of certain investments and loan applications.
Decision making
algorithms are used to automatically asses the visibility of loan and mortgage applications to product an automated decision.
Machine learning algorithms
algorithm that earns their way of analysing data and reaching decisions. They alter their decision making procedure based on the data given and goal assigned with little rules already in place.
Automation and bias
human decision-making is bias and as humans are often prejudiced.
Banking and big data
data analysed by computers to reveal patterns and trends.
Environmental ethics
about the ethical relationship between human beings and the natural environmental
Banks embedded position in wider ecosystem
banks don’t exist in isolation, they are part of the financial system which serves and relies on the economy.
