Data Ethics: The Next Step in Data Privacy

It would be impossible to speak about responsible technology use without considering both data privacy and data ethics. In this article, Dr Sam Short, Chief Data Scientist at Upside Saving, explores the future of ethical data use through the lens of the retail industry. 

Data privacy looks at the collection, storage, and use of data. It asks if the use of collected data matches the expectations of those it was collected from, and whether it complies with the relevant laws and regulations. Data ethics, on the other hand, springs up more often in the context of artificial intelligence (AI), and focuses on the human impact resulting from the data use. This article will look the ethical use of AI from a retail perspective, considering how the sector can build it into its services to serve both business and customers.

Accountability & Regulation in AI – Who Is Responsible?

An important part of data ethics is the interpretability of AI when it comes to fairness, transparency and reliability. As a retailer, you need to ask yourself if you’re being fair with consumers when they collect their data. Are they cognisant of the collection, and are you giving them a share of the value? You also need to consider whether you’re being transparent about your data and AI use, especially if this impacts real people and the wider society. You need to understand your AI models and what variables drive the outputs they produce. Finally, it’s crucial to be aware of the accountability and risk associated with each AI use case, and for the customer to understand and be able to challenge a decision made using data and AI.

Since the advent of GDPR, consumers have enjoyed greater control of their data. But if we ask “who bears the cost if the technology does wrong ?”, the current answer is neither the technology creator nor the technology purchaser, but the technology consumer. So until the technology creator is made accountable, there is little incentive for companies to build AI that is robust, fair, transparent, accurate, and therefore ethical. But there’s a glimmer of light: the EU is proposing an Artificial Intelligence Act that will seek to regulate the use of AI, although it’s still unclear how exactly this will play out.

It’s true that AI is difficult to regulate. Whilst algorithms have little bias, the data that is used to build the models often does. Consider an example from the retail industry: building an AI model for a hyper-targeted marketing campaign. One of the most predictive variables for predicting someone’s behaviour in this context is their postcode. Using that information doesn’t seem like an issue, right? Now, switch to another real-life use case: predicting the risk of someone committing further crimes once released from prison. Here, we’re deciding whether of not a person is granted their freedom based on where they used to live. In this case, the variable used inarguably results in a person being treated unfairly and unethically.

The Future of Ethical AI

So, how and why should retailers build data ethics into everything they do? Hopefully the “why” is clear: to treat consumers fairly and avoid hefty fines in the future. An additional incentive for companies is found in a new report from Capgemini which finds that 62% of consumers place higher trust in a company if they view its interactions as ethical. The “how” is more difficult, and likely a lengthy article in its own right! A great place to start, however, would be to create a data and AI ethical risk framework, specific to the retail industry, that outlines ethical standards and proposes risk mitigation.

As our advances in data and AI continue, the focus on the interpretability of AI in relation to fairness, transparency, and reliability will continue to become an bigger part in the discussion around data ethics.
When used in an ethical and responsible way that is focused on adding value for the customer, data can be an asset to businesses. It can help retailers to develop frictionless and tailored retail experiences end-to-end, whether that means offering relevant and timely discounts or making recommendations. Personal touches that do not compromise privacy boundaries throughout the customer journey can have a huge impact on customer experience and ultimately, retailers’ bottom line.

Whilst the data ethics landscape is constantly evolving, one thing is clear: given the purposeful shift in consumers’ buying habits toward more ethical products and companies, whether it’s animal-free food, slavery-free clothing, or plastic-free packaging, the retail winners will be those who embody AI and data ethics in all parts of their organisation.


Dr Sam Short
Chief Data Scientist, Upside Saving

Sam is an renowned Data Scientist with a career spanning consulting, Finance, and Technology with a specialisation in Artificial Intelligence. She holds a PhD in Experimental Particle Physics with Applied Data Science from Imperial College London.