In the final of our series on the loss of faith in free market economics we ask New Zealand business leaders how they’re grappling with the almighty power of a technology that barely existed 20 years ago.
Hands up who’s read the Financial Markets Authority’s website. Come on, be honest.
No, of course you haven’t. You’d sooner watch paint dry. And that’s not because the FMA’s site is especially boring or inaccessible – kudos to them, it isn’t bad as financial markets regulators’ websites go, with useful stuff like scam alerts and a KiwiSaver tracker that shows how your scheme is doing in relation to the amount of fees you pay.
The problem is it’s just not the way people – particularly millennials and Gen Z – like to get information about money. “The under 35s are operating in a completely different way vis-a-vis financial services than the over 50s,” FMA chief executive Rob Everett says.
Consider cryptocurrencies. You’d think investors would want sound advice before launching their hard-earned cash into cyberspace, but no. One result of a growing mistrust of financial institutions is people believe what they see on the internet over anything their bank or even a government regulator is telling them. “People are making quite big financial decisions based on what they see as the wisdom of the crowd,” Everett says. “That’s a challenge.”
The internet and the rise of social media platforms have changed forever the way people interact with institutions, businesses and governments, both for good and bad. Another example of how social media has altered the rules of engagement is the rise of rampant populism, fueled by an undercurrent of worsening inequality and poor income growth after four decades of unfettered free market economics.
In a series on the loss of faith in capitalism to deal with these problems, The Spinoff asked a selection of New Zealand business leaders how they’re responding to three key challenges. In the first two features we put them on the spot over growing inequality and climate change. This third and final chapter considers their position on the power of social media.
We wondered if they’re listening to the next generation of employees and customers. Over half of respondents to Deloitte’s 2019 Global Millennial Survey say social media does more harm than good, and four out of 10 say they wish they could stop using it completely. Paradoxically they don’t stop using it, even when recent world events have highlighted the harm it can do – from unrestrained videos of the Christchurch shooting, to co-ordinated efforts to influence foreign elections based on collected personal data.
They are hyper-aware of the dangers of parting with their data, however. Only 14% of respondents strongly agree that the benefits of technology outweigh the risks associated with sharing personal data, and 79% are concerned they’ll be victims of online fraud. Combine those statistics with the knowledge that a quarter of millennials have curtailed consumer relationships because of companies’ inability to protect data, and it should serve as a warning to business leaders going forward, the Deloitte survey says.
Charles Adler, the founder of crowdfunding platform Kickstarter, is eternally optimistic about the power of technology to serve society. In a highly industrialised world people are now fighting sameness, and that is why mechanisms enabling them to be the Medicis of their time and support creativity have struck a chord, he told the Future of the Future event in Auckland earlier this month.
But tech firms are grappling with a complexity of issues that have never existed before, he says. “In our brave new world of big personal data, social isolation due to our increasingly digital lives, and the rise of artificial intelligence, it is unclear what the future holds.
“We need people to take a stand around building companies that have a much stronger social construct to them.”
Ana Arriola is general manager and partner at Microsoft AI + Research where she heads a team devoted to making artificial intelligence accessible to all. The world now faces the dilemma of bias in the machine, she told the Auckland event. AI lives off the data we feed it, and it will replicate existing human prejudices unless it’s designed to allow modern aspirations to permeate. Otherwise the risk is that progress made in societal attitudes over the last 65 years will be lost.
“With AI we are potentially bringing another era of colonialism, if we don’t get ready. We are playing a very important role,” Arriola says.
How are New Zealand businesses responding to this head-spinning stuff? In the final of our series, The Spinoff put the following question to leaders:
We live in a world where unfettered online platforms are propagating extremist beliefs and undermining the democratic process. How concerned are you about the power of social media, and what changes (if any) have you made to the way your business interacts with the platforms?
Rob Everett, chief executive of the Financial Markets Authority
Everett answers in the context of the challenges the market regulator is facing in dealing with cryptocurrencies.
“We have done research with Facebook, and what it’s done is give us insight into the demographics and sorts of ads that flash across people’s Facebook pages, that they click on and what they then do.
“We can see that specifically for a certain dynamic – which is males between 15 and 30 – but more broadly, the decision-making that people are applying to some of that stuff is different from what 20 years ago you might have thought they would do.
“We have to find a way of reaching that population to warn them of the risks they’re taking and help them get better information before they make those decisions.
“More disclosure is only a partial answer, if an answer at all. They’re not people who are going to read a five-page guidance note we put out. In addition, they’re on the bus looking at it on their phone.
“We’ve used the Facebook testing we did to divert people, if they click on one of those links, to an FMA page. We’re able to track the extent to which people do click on those things and time spent.”
Kendall Flutey, CEO of financial education startup Banqer
“I’m extremely concerned about the social media monoliths as well as the role they play in society and associated power they hold. Extremism aside, the addictive nature and ironically anti-social behavioural patterns they form have resounding ramifications for our societies and cultures.
“But online platforms, whilst propagating hate speech, are not the cause of it. We’ve seen over the last fifty years the rise of the individualist, and a loss of sense of community. This is causing people to seek it in whatever form they can get, and many turn to social platforms to be surrounded by like-minded individuals.
“This insular regurgitation of beliefs does make us narrow-minded, at various scales, and in instances as we know exacerbates and fuels issues.
“Having used social media in various forms as a business provides you further insight into how these companies view members of their communities, and it’s not as people. It’s as clicks, impressions, and revenue.
“We’re still on social media but assessing that decision – largely prompted by companies like Basecamp and Mozilla leaving.”
Alistair Davis, CEO of car dealer Toyota New Zealand
“For Toyota, we use our social media platforms to interact with our customers. In much the same way that if you call up our Dialogue Centre you will get a person in New Zealand at the end of the phone, if you comment or message Toyota through social media you will be contacted by one of our team based in Palmerston North.
“There is an inherent reputational risk with social media that we are always conscious of, but it is a useful tool in the wider customer dialogue stream to disseminate information quickly, particularly when it comes to safety recalls, or customer information that we want to get out fast.
“We have a structured escalation process for any significant activity on social media, where our staff working in these channels are empowered to quickly and efficiently manage or escalate issues. Our focus on honesty and maintaining our integrity standards is appreciated by our communities, often where they assist in containing any negative activity.”
Steve Jurkovich, chief executive of state-owned Kiwibank
“Social media can be used for both good and bad. We’ve seen this in recent months where Kiwibank’s support of Mike King’s Gumboot Friday campaign was an overwhelming success and saw us donate $100,000 to the I AM HOPE campaign.
“However, we all experienced the shock of its use in relation to the Christchurch mosque attacks. We immediately stopped advertising on all channels and only after being provided sufficient reassurance from these platforms and confirmation that they were adopting more robust policies for screening content did we reconsider our position and begin advertising on them again.”
Marc England, chief executive of electricity generator and retailer Genesis Energy
“As a business we have to be where our customers are, and social media is an important customer service role for us. Personally, I am concerned about the changing nature of online communications. Social media companies have a responsibility to put in better controls to protect the vulnerable but they alone can’t stop extremist views.
“For more than 100 years, anyone who has had a view to share could stand on a box at Speaker’s Corner in Hyde Park and shout to anyone walking past who would listen. While social media can provide a more far-reaching platform for the modern-day extremist, it doesn’t prevent us from challenging these views and raising important social issues as many businesses, including Genesis, did following the Christchurch terror attacks.
“Business and individuals have a role to play in contributing to creative, productive, growing societies where the extremist views of a few don’t cloud the perspective of many.”
Jeff Douglas, managing director of pharmaceuticals company Douglas Pharmaceuticals
“Firstly, I do not use social media. I am concerned with the obvious downsides to social media like bullying, advancements of terrorism, etc. However, as a business tool it is too powerful to ignore. That is why Douglas has employed digital experts to make sure we are on some social media platforms to promote our relevant products purely because of the exceptionally high global reach of social media.
“Social media is an important part of our marketing mix for our consumer products. Obviously, social media doesn’t impact nor have any influence over our prescription medicines and pharmaceutical products.
“We also need to be on social media for recruitment because a lot of recruitment is done through this medium.”
Mike Bennetts, chief executive officer of fuel retailer Z Energy
“We’re very concerned about the power of social media, for good and for evil. The day the Christchurch shooting happened, within 30-45 minutes we had stopped all of our participation on social, we had stopped all of our advertising. It took us a number of weeks before we were satisfied that we should go back and participate on those platforms.
“We have someone moderating our social media 24/7. The comments do get made, poor language, racist. We private message the person and say, ‘the comments have been taken down for this reason’.
“We recognise social media can be used for positive as well, and we encourage diverse views. At first some of my folks said, ‘look what they’re saying about us’. Well, they’re saying it anyway, it’s great that they say it in a way that we can see it and we can contribute to it.
“I host a session called ‘Ask Mike’ every 3 months, live on Facebook from 7-9pm on a Tuesday. (Bennetts hasn’t done it since the Christchurch shooting but is due to restart ‘Ask Mike’ in September/October). I think people like to know that companies aren’t run by nameless, faceless individuals. It’s called ‘Ask Mike’, it’s not called ‘ask the chief executive’. It’s breaking down that myth that the company is some ‘thing’. A company is a collection of individuals.
“They’ll ask, ‘What do you think about deep sea drilling? How much do you get paid you filthy rich so-and-so?
“When you get that personal interaction you can say, ‘we do believe in sustainability’. Being able to publish material or give people a contrary view in some cases helps.”