Taming the Next Wolf of Wall Street – Design Principles for Ethical Robo-Advice

Authors

Albert Torno, University of GoettingenFollow
Siska Bähnsch, University of GoettingenFollow
Moritz Dreyer, University of GoettingenFollow

Paper Number

1239

Abstract

Automated investing in form of Robo-Advice (RA) has promising qualities, e.g., mitigating personal biases through algorithms and enable financial advice for less wealthy clients. However, RA is criticized for its rudimentary personalization ability questioning its fiduciary duties, nontransparent recommendations and violations of data privacy and security. These ethical issues pose significant risks, especially for the less financially educated targeted clients, who could be exploited by RA as illustrated in the movie “Wolf of Wall Street”. Yet, a distinct ethical perspective on RA design is missing in literature. Based on scientific literature on RA and international standards and guidelines of ethical financial advice we derive eight meta-requirements and develop 15 design principles, that can guide more ethical and trustworthy RA design. We further evaluated and enhanced the design artifact through interviews with domain experts from science and practice. With our study we provide design knowledge that enables more ethical RA outcomes.

Comments

Paper Number 1239

Recommended Citation

Torno, Albert; Bähnsch, Siska; and Dreyer, Moritz, "Taming the Next Wolf of Wall Street – Design Principles for Ethical Robo-Advice" (2022). PACIS 2022 Proceedings. 79.
https://aisel.aisnet.org/pacis2022/79