Financial ethics forms the foundation of trust and stability
in the complex world of finance. It goes beyond mere compliance with
regulations. It involves adhering to a moral compass that guides
decision-making and actions, ensuring fairness, integrity, and accountability.
This study aims to develop a comprehensive framework for leadership practices
that foster responsible innovation in the financial sector. The goal is to
harmonise technological advancements with ethical considerations and societal
well-being, thereby strengthening financial stability and public trust. Rapid
digital transformation in finance, including the rise of FinTech, algorithmic
decision-making, and data-driven platforms, has outpaced existing governance
and ethical safeguards. Current leadership practices often fail to address
ethical dilemmas such as algorithmic bias, data privacy breaches, and ESG
integration gaps, resulting in diminished public trust, systemic risks, and
potential financial instability. The research adopts a systematic literature
review (SLR) to synthesise empirical studies, best practices, and theoretical
frameworks related to financial ethics, responsible innovation, and ethical
leadership. This approach allows for a structured evaluation of the state of
knowledge, identifying critical gaps and actionable strategies. The study
contributes by proposing a leadership framework for responsible financial
innovation. It integrates ethical decision-making, stakeholder engagement,
transparent governance, and ESG principles into organisational structures and
innovation strategies. This framework offers practical guidance for financial
institutions, regulators, and policymakers seeking to balance innovation with
ethical governance. The literature highlights persistent ethical challenges in
financial innovation, with particular concern for algorithmic bias, weak
accountability mechanisms, and inadequate stakeholder involvement. It also
demonstrates that embedding ethical leadership and ESG considerations into
financial decision-making strengthens resilience, enhances trust, and promotes
sustainable development. His research concludes that the future of financial
stability and sustainability depends on leadership practices that integrate
ethics into innovation processes. By aligning technology adoption with
transparent governance, stakeholder engagement, and ESG integration, financial
institutions can restore public trust and ensure responsible digital
transformation. The proposed framework provides a roadmap for creating a secure,
inclusive, and sustainable financial system.
Author(s) Details
John Motsamai Modise
Tshwane University of Technology, South Africa.
Please see the book here :- https://doi.org/10.9734/bpi/mono/978-93-88417-39-6/CH1
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