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'Innovation' without ethics

Here in Australia, we've been witness to a series of shocking revelations in the finance industry through a Royal Commission into the Banking, Superannuation and Financial Services Industries.

The interim report of the commission makes for damning reading, but the executive summary sums it up pretty neatly. When answering the question, "Why do these industries behave the way they do?" (i.e. very poorly), it states that:

"the answer seems to be greed – the pursuit of short term profit at the expense of basic standards of honesty."

The community backlash has been huge, with all major banks in Australia last week reporting shrinking profits and downgrading their financial forecasts. Ethics – or the lack of – are affecting the bottom line. 

Too often, 'innovation' in the finance industry has been the realm of financial technicians and techno-fetishists; either through intentionally obscure, higher-order financial 'products', or 'solution without a problem' experiments such as the blockchain. 

The role of human-centred design in these organisations has traditionally been to help deliver a palatable experience around these innovations – using the tools and techniques of digital and service design to remove pain points and improve the user experience. 

What the Royal Commission shows, though, is that 'innovation' in these organisations has been co-opted towards short-term profit. Despite being 'human-centred', design has been complicit in making poor advice, fee for no service products, and unaffordable loans inappropriately accessible to our communities. 

So what should design do?

We think the next wave of innovation in the finance industry must be around product and service design ethics, making sure that digital services are meeting real community needs, and transforming the industry itself to be more closely connected to its customers.

Design is good at building usable experiences, and at making the complex understandable. It now needs to start thinking of innovation within financial organisations as a systems problem, to look at the ways product and service innovations happen, and to better design that process. 

Design, broadly thought of here as systems and organisation design, can help build checks and balances throughout the innovation process to ensure that financial organisations aren't just 'human-centred', but ethical. 

— the PG team


If you want better returns on your super, look for a gender-diverse fund manager

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Apart from the solid ethical reasons for putting your money in a fund with equitable hiring practices, "investment teams with greater gender diversity have delivered superior risk-adjusted returns for their investors".
Bitcoin is not meaningfully decentralised
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One of the big dreams of Bitcoin was to avoid placing too much power in the hands of a central bank, since they have a history of breaching users' trust. And in a sense, it's achieved that. There is no central server; the Bitcoin network is distributed across its entire user base.

In practice, however, control over Bitcoin is centralised in all kinds of entities. For example, the vast majority of Bitcoin owners use cloud software to manage their Bitcoin, so they can easily access it across devices and don't need to worry about losing all their money if they lose their laptop. And the makers of that software can directly access users' Bitcoin. They're being given the same level of trust as the central banks but without the regulatory oversight. 

Further, Bitcoin's core developers have the ability to change the Bitcoin protocol. While they frame it as just technical administration and not governance, their 'purely technical' modifications have included changes to transaction fees. That's regulation, but it's being done without any kind of regulatory framework because the governing body won't admit that it is one.
Gravis McElroy is mad as hell and he's not going to take it anymore
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"It's just like banks. I can't pay someone to hold my money. That's impossible. No business exists that will simply Hold My Money, every last one of them is busy playing twelve dimensional Monopoly with it."

"All I want is a website I can visit that shows me an account balance in dollars and cents and a plastic card to access it at stores. I can't buy that. That service is nonexistent. Instead I have to store my money with someone who is running thousands of dubious scams."

Comic explainer: how does Islamic finance work?
Recommended by McKinley Valentine
Islamic law strictly forbids usury, meaning loaning money at interest. (Christianity forbids usury as well, but redefined it in the 16th century to mean only loaning at high interest rates think payday loan companies.)

What does a banking system look like when banks can't make money off your savings account, nor profit from your mortgage? The University of Queensland’s Mamiza Haq explains.
This means, unlike in conventional banking, if a bank loans you $500,000 to buy a house, and the house's value drops to $400,000, the bank is only entitled to be repayed $400,000. But if your house increases in value, your debt to the bank does too.

There are other differences as well for example, you would not be able to borrow money to build something that is against Islamic law, such as a casino, a distillery, or a robot that steals from orphans.

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November 13, Melbourne
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This event will move beyond the hype and rhetoric of human-centred design to explore its key principles, what it means in practice and lessons from its recent application. Featuring the heads of design and innovation labs, the event will explore the potential and challenges of human-centred design in the real world of policy making and service delivery.
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Workshop details and tickets

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