Ethical and Legal Challenges in the Banking Industry: A Case Study

This report presents a case study examining the social, legal, and ethical issues within the banking industry, particularly focusing on the impact of social media and technology. Part one delves into the complexities of social media speech, differentiating between free speech and hate speech, and explores their respective ethical and legal implications, providing real-world examples like the Paris terror attack and racial tensions in US campuses. It also addresses the use of automated systems such as facial recognition and AI algorithms by states, highlighting the associated ethical, legal, and social concerns. Part two discusses issues and errors experienced by financial institutions like Commonwealth Bank, NAB, and VISA, analyzing system failures and their social, legal, and ethical ramifications. The report concludes with recommendations for developers to mitigate such failures and addresses broader information technology issues in finance. The study draws upon academic and professional literature to provide a comprehensive analysis of these critical issues.

Professional topics for business
Banking industry Case Study
OCTOBER 6, 2018
student name
Institution name

Table of Contents
Introduction...............................................................................................................................................2
PART ONE................................................................................................................................................3
Social media and Speech.......................................................................................................................3
Hate Speech and its Ethical Issues....................................................................................................4
Social, Legal and ethical issues associated with hate speech...........................................................4
Free speech and its Social, Ethical and Legal Issues...........................................................................6
Applications of Automated Systems and algorithms by States..........................................................7
Facial Recognition and Algorithms like AI......................................................................................7
Ethic, Legal and Social Issues of Face Recognition Application....................................................7
Algorithms AI applications...................................................................................................................8
Part 2..........................................................................................................................................................8
Issues and Errors Associated with the mentioned financial institutions...........................................8
Commonwealth Bank........................................................................................................................9
NAB....................................................................................................................................................9
VISA Company......................................................................................................................................9
Social, Legal and Ethical Issues of Systems failures.........................................................................10
Recommendations by developers in cases of such Failures..............................................................10
Information Technology Issues in Finance........................................................................................11
List of References......................................................................................................................................12

Introduction
In the current state of technology much has been achieved in many ways. Technology in the
current world has inspired many in all ways through where people can do things while seated at
home. There are many ways through which people can use technology in conveying messages
Many technology platforms which have been created have been as a result of bringing the globe
closer, easy interaction and friendly platforms where people can interact in all ways all the time
in a way that is reliable and much more showing some availability to all who use it. There are so
many trends which have been registered each and every day which have resulted to many people
having interaction chances and much more being able to socialize in different platforms even in
situations when they are not close to each other.
Many people are using internet as well as the technology in making their end meets.
Technologies such as the use of social media has greatly influenced the way people interacts.
Social media platforms has ensured that people can interact in all ways thus creating an
environment that is conducive. Developers and programmers has been on the frontline in making
sure that the users of such social media platforms are happy and that they enjoy the use of such
platforms.
Social media is a very big platform that has helped many in making the world a better place in
making conducive interactions to be achieved everywhere at any time. It has brought people
together in all aspects in that they can now be able to express themselves in so many ways and
thus being brought together as one family through such platforms. There are so many platforms
which are widely used such as SMS, WECHAT, WhatsApp, Facebook, Instagram and Twitter
among others. One can use such platforms in expressing one’s ideas and opinions so that one can
be heard by many people or a specific audience can get the message at the expected time. It is a
platform that has helped many in portraying the extensions and personalities of an individual.
One can use social media in expressing their views, interests and ideas thus leading to a person
showing who he or she really is. Social Media has helped to create a platform where one can be
creative and much more aspiring the listening or the active audience as they support what one
posts by replying back through comments or liking one ideas in all ways.
Social media can be used as a platform of interaction, however in many aspects it has been used
in building the way people relates while in other cases it has been seen as a tool to bring hatred

to people of the same ethnic or even race which may depend on the posted message. The reason
for its negative and positive impacts of using social media being mentioned is because of such
issues that has escalated such as racism, gender discrimination and much more tribalism thus
resulting to people disregarding the concept of using such platforms. People have felt that they
really need to have a lot of sense to the way they express themselves and the way their speech
are used over the networks which are online in all aspects (Peser, 2012)..
PART ONE
Social media and Speech
There are so many opinions that has been concluded with regards to the usage of social media
platforms and with this ideas people have highlighted so many ideas with regards to the correct
usage of internet in the society. Using of social media is not a problem but the way it is used that
where the problem comes in. The usage of a platform is expressing the way people relate and
much more the reactions after a certain post has been confirmed by the audience. There are
different types of speech depending on what one want to portray to the targeted audience. The
two major types of speech are free and hate speech which are always known by the person
sending the post and the way people reacts against or towards such message after it has been
read. The following are some of the recent scenarios through which social media has been
applied to disuniting people globally.
1. The first and recent example is that one of Paris in France where there was a terror attack
which was very terrible in that many people ended losing their lives. The situations was
so immoral that the terror was associated to Christianity and Muslims rivalries which led
to over 70 people dead. The terror attack was taken with a lot of considerations in the
social media where some people used the social media platforms to wish the deceased
families message of condolences while those in hospitals were wished quick recovery .
The bad thing was that there was another group that supported such acts and said that the
deceased deserved such hence creating tension all over the country and thus termed as
hate speech.
2. The other example was in United States of America in Missouri where inside the campus
there were rivals between the different races that is the white Americans, America Blacks

and America Asian. In the school posts there were so many people arguing that there are
some people who are not supposed to be belonging in the same institution with others
thus this created a lot of tensions among different peoples and thus even reading to some
people to avoid to attend classes in the campus as one could fill the odd out or in the
wrong place when in real sense it is not supposed to be like that.
3. The other area of notice with regards to the expression of speech is the case of bombings
in Beirut where people bombed others saying that they are doing the right things and
believing that if one does that he will achieve more in the afterlife. This made many
people kill each other through bombs in Beirut which was heightened by excess of social
media in ways which were not expressing opinions but in those which were destroying
the lives of people through painful and early deaths which could have been avoided. Hate
speech has been clearly shown here in all aspects.
The concept of speech in the social media has been heightened by existence of such acts such as
discriminations with reference to one’s gender, race of a person, terror and the refugees while in
other areas such ideas and opinions have been assumed in all ways.
Hate Speech and its Ethical Issues.
Hate speech is a speech that is often used by some people in offending or even attacking other
people either directly or indirectly which is on the basis of one’s gender, race, ethnic group,
disability issues, disease, origin and the sex orientation of an individual (Bensi, 2015). If the
speech is meant to bring hatred to people in a given nation then it might be a problem to the
society and the nation as a whole which may result to hatred and sometimes leading to cold war
between different individuals and much more engaging in to unnecessary wars which could have
been avoided.
Social, Legal and ethical issues associated with hate speech.
There are so many issues that can come as a result of one posting a photo, message or even an
idea that is meant to portray a negative message to the society. This may be explained using the
social, legal and much more the ethics that guides an individual in all ways.
Hate speech in many countries may differ and this has led to people waking up and finding out
their nation is no more but a land of chaos. Hate speech was first defined and talked as a
phenomenon that appeared back in Europe back in the Second World War. The ideas behind

such laws was curbing the kinds of such opinions and ideas that were anti-Semitic and racist
propaganda thus giving rise to the Holocaust. Many countries has passed law acts with regards to
people portraying hatred to a given group or an individual. Hate speech issues in the legal has
made the officials in the government to even use such platforms to attack their competitors
maybe in different governance positions which may lead to their supporters engaging in fights. A
good example is that of Kenya in 2017 elections when the supporters of Jubilee government and
those of NASA the opposition’s party used to fight using social media which extended even in to
real war by their supporters where some people died and others left homeless. The state had to
associate and implement laws that were used to punish those who used hate speech in the media.
When one posts a video, sms or even an opinion then it is good for one to reconsider the people’s
reactions after they view the message. This may help the society to cub social issues that can be
brought about by such messages if bestowed to hurt a group of people. There was so many social
issues which were experienced in Rwanda during the HUTU and TUSI war where social media
was greatly used in making the two social communities to be involved in to violence and thus
leading to over 800,000 people dead. Social issues that arise are violence which may lead to
unplanned destructions and much death of innocent people. The innocence of the people who are
not targeted will be affected greatly in all aspects of life.
Lastly in terms of ethics, the human beings have ethics that guides them and which are used to
define who they are. An individual ethics can be tested in social media when he or she posts and
the intentions of posted message. When one violates other people opinions by commenting hate
speech claiming it is a free world then this may termed to be unethical as one has the intention of
hurting the other person. The traits that violates or makes the other person or group of people
seen lesser are those that are unethical and that are meant to hurt the specific individuals in all
aspects of life. All human beings have a life and which is so fragile if they get hurt in all manners
therefore it is good to note that the ethical issues one uses over the internet can be a problem or a
hatred to others leading to many feeling not accepted or even unrecognized in the society. The
situation may extend to one feeling like he or she is less considered in the society and thus taking
the next action of returning words which are hurting back to the sender which may lead to
creation of conflicts which may be hard to solve.

Free speech and its Social, Ethical and Legal Issues.
Free speech maybe termed as the freedom of speech in all ways anywhere at any time. Free
speech is where one can express his or her ideas, opinions, and interests on all the available and
reliable platforms in expressing their suggestions without any internal or external interference
from anywhere (Simonsha, 2009).
Free speech in the social media has been exercised in so many ways through which many people
have taken the advantage of the right acts to have the freedom of expression (Free speech). Many
people have used such platforms to express themselves indirectly to other people which in other
cases leads to other being helped or hurt on the way. One social issue of free speech is that it has
harmed the society by greatly affecting the people opinions on the platforms such as Facebook
and twitter when they try to express themselves. Freedom of speech falls in the first amendment.
There are many people who claims to be using the social media in delivering free speech but in
real sense they target other people by hurting them and claiming to have power in doing things
how they feel or even want to as they think the constitution empowers them by allowing the
freedom of speech. What people forgets is that it is restricted to not harm any other with the free
speech. The social issue in free speech through it being exercised, many people have felt
obsessed to extent of even wondering the meaning of a constitution. This has made many
nations to restrict and regulate free speech in their nations in all aspects of life.
In terms of ethics free speech has destroyed the way the life of individuals is centered. The
outcomes that comes in as a result are that many people have agreed to be very lenient to the
approach of what has been posted in the social media. There are such groups in Facebook in
where they are created with an aim of people to gossip but sometimes a person may post a
message which is ethical, this may be in the manner he or she is not directing to anyone but
afterword’s after following the conversation someone may post the intended person maybe who
was being discussed thus this becomes unethical to one and even to the others. Many people may
claim to be communicating a lot information that are helpful to the society and terming the idea
to be a free speech while in real sense the aim is violating another person indirectly. This may
offend another person and feel discriminated.

Applications of Automated Systems and algorithms by States
The automation of many systems in many industries and companies has led to many people
automating their systems. Many of these applications are such as the concept of facial
recognition applications which has led to many people liking the idea where they can be able to
stay at home and work comfortably without fear as they know they are secured in all aspects.
Facial Recognition and Algorithms like AI
Facial recognition systems are those systems which are used to recognize peoples face using
photo electric sensors which can easily identifies using the person eyes and face as a whole
(Jakeneda, 2016).Some of the applications such automated systems have been applied by many
nations are such as the
i. When students are doing online exams
ii. Used in soccer stadiums to check the banned list
iii. When paying the ordered items
iv. Used in locking and unlocking computers as well as computers.
A good example where such has been implemented in details is in Russia Moscow where there
are more than 160,000 CCTV cameras have been installed to be surveilling the city.
Ethic, Legal and Social Issues of Face Recognition Application.
There are so many issues associated with applications of facial recognition automated systems if
applied in the country. Some of the ethical issues that are associated are such as.
1. This goes to the direct stakeholders. These are such as the consumers who uses
smartphones, the minorities and the public sectors. Using facial recognitions in the direct
stakeholders may affect ones privacy and much more making them feel as if it is
unethical to them in all aspects of their life. The other group which is directly is that of
the indirect stakeholders such as the marketers, journalists (People who are known for
directing the opinions of the public.) and lawyers and makers of such policies.
2. The other people to be considered are such as the companies who drive such technology
e.g. Facebook, Google and Apple among others. Developers should not use the unethical
issues in an unprofessional manner thus making other people to face problems not meant

for them. Such problems can be created by the FTR having errors which may make
people not to be recognized by such tech thus looking as if they are intruders.
The other concept are those issues caused by the legality of FRT in a state. Some of the legal
issues are such as.
1. There will be consequences of policies in future which will be lining on the relationship
between privacy and safety. This is heightened and explained through such aspects such
the extension of values.
2. The other one is the involvement of regulations such as the FBI systems. In this case
there is no federal laws or rules control such tech and limitations in the court.
3. Lastly but not least is that there will be concerns on legal and concerns of moment
conclusions (Sexrena, 2018).
Algorithms AI applications
There are some special artificial intelligence tools or applications which has been applied in
making the world of crime very easy in capturing the law offenders even before they attempt the
crime they intend to do (Carlos, 2015). This has helped in curbing and reducing the problems
which are associated with such problems. Artificial Intelligence applications are one of the
algorithms automated systems which have gone to the next level of technology by even showing
status of crime intended to happen even before it happens. These system have been used by
many countries in predicting crimes. Such system has been installed by the FBI in USA which
costed over $100 billion and thus helping to incarnate the state as well as the locals (Maxwell,
2018). These technology is so new in the market and has not been applied in many states as
many still do not know how it operates and much more it very costly (Feguson, 2018).
Part 2
Issues and Errors Associated with the mentioned financial institutions
Many cases are reported to financial institutions having so many problems especially in cases
when there are systems failures. These failures have been reported in many cases where
customers or clients leads to being left unattended, loss of money by the financial institutions and
lastly is that there is a lot wasted resources in terms of money or even time when system is down.

These system failures may be caused by power issues, recovery and backup system errors,
interruption when doing an update or an upgrade among other factors behind such.
Commonwealth Bank
The understanding from the three articles with reference to the system failures has been caused
by the installed of software’s and hardware’s in the bank. The hardware may crash maybe due to
power surge or issue or other normal hazards. The software of the system may be obsolete and
not compatible with the systems associated with it. Commonwealth bank had an outrage where
clients’ money in the account were invisible and they could not be able to see the remaining
balance and thus only able to view what was in the saving account. The idea behind the money
disappearing in the account was caused on the user account side. This led to many customers
being frustrated in all manners and lacked confidence and faith with their financial institutions.
There are other cases where customers could even be disappointed when they tried swiping their
debit cards after a purchase and thus not able to purchase anything. The sad news on the banking
side was that over 6.5 million of Australian user of such accounts in commonwealth use such
online banking services. The problems led to many to many people lose money within those
hours as all the account holder or the customers of Commonwealth bank could not access their
balances in their banking accounts (Jneey, 2017).
NAB
In this article of NAB there was system failure in some hours in some part of the specific
country. Disruptions had occurred on the weekend where it disrupted the way customers
interacted with the system. The users who had account with the banking’s had problems
accessing their accounts. Disruptions of the activities really affected many people across the
TASMAN area such that they kept tweeting in all social media sites that the NAB systems were
down for morning hours. The report claims that the problem was caused in the mainframe of the
banks in the city of Melbourne. The NAB bank after realizing all the experts tried fixing the
problem to avoid keeping the customers and incurring all loses. They promised to compensate
the customers 100 Percentage in all the losses the customers incurred when the system had failed
(Abc, 2017).

VISA Company
In this Article the company was spotted to have most of its users experiencing problems which
were creating issues when using the credit cards. Problem appearance was explained to be within
the pins for transacting and chips. There were no transactions that could have happened within
that periods when the systems were down. Many of these problems were experienced in some
areas of United Kingdom which reported the problem to be escalating so many times in all
aspects and in so many times. (Guardian-staff, 2018).
Social, Legal and Ethical Issues of Systems failures
The society as a whole has been on the frontline in being affected by the problems that comes as
a result of the system failures. When such systems occurs they affect the economy and the entire
business in full (mark, 2012).
The legal issues, ethical issues and social issues associated with such failures in banking industry
systems can be explained using the following impacts.
The concept of self-interest has in many cases transmuted the concept of greed and
selfishness to get in to people and if it is not checked this will be expensed on another
person. Greediness has become a kind of an accumulated fever. This has been taken as an
ethical issues (Booth, 2008).
People suffering from stunting moral development.
Conflicts in company demands through the professional responsibilities and duties.
Equating of moral behaviors with all the behaviors which are legal which may disregard
all the facts without knowing all the actions to be still legal and thus termed to remain
moral.
Lastly but not least is whereby the responsibilities of the individuals can just wither under
all the demands that are owned by the clients (Nederson, 2017).
Recommendations by developers in cases of such Failures.
Many developers find themselves in situations where they cannot be able to explain what started
the failure or how to solve the issues within the specified time when a failure occur. There are so

many recommendations that should be given by many developers in ensuring that such system
failures are avoided in banks or in financial institutions.
1. The first recommendation is to give the developers more chance in servicing and
maintaining the already software’s in the systems and this will help them in evaluating
the systems and thus giving a warning when an error is predicted to occur depending on
the systems conditions and direct interactions.
2. The other major recommendation is doing some testing and much more checking the
compatibilities between the system and the software and how the two relates in all ways.
This has heightened the way people associates or interacts with the system on the
administration side.
3. Developers should always check and view if they is consistent flow of information when
the systems are in use ranging from the banks mainframes to the applications installed on
the phones of the accounts holders.
4. Lastly is that the developers should give specific or a real estimate to the the user of
accounts when the system will be back online in cases where they encounter system
failures maybe due to maintenance or power surge or failures. This will help in creating a
good relationship between the account holders and the specific banks.
Information Technology Issues in Finance
There are so many problems which are associated by use of IT by many people globally, thus for
a couple of years it has rotated around the contexts of financial crises and thus it has helped
restoring the public confidence and thus heightening the level of competition. Some of the
problems are such as.
Reduction of breaches in security and cyber theft has led to increment of business values
with reference to customer relationships
Mandatory regulations which must be complied with.
Many businesses transformed in to open doors to all mobile and experiences in financing
digitally.
Leveraging the technology to ensure there is high competition advantage
Improvement of technology by use of technology.

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