It’s hard to make claim that technology hasn’t improved many facets of our everyday lives. Ordering lunch, calling a cab, and even managing your finances can be done instantly with a smartphone. The unique algorithms powering these applications have found a way to process information more effectively, replacing error-prone human judgement in the decision making process. Technology has seemingly reached a point where people blindly trust these unfamiliar algorithms to provide solutions to a range of problems both trivial and major. That dispassionate technology is weighing in on complex issues may not concern some, but a growing body of evidence suggests algorithms exhibit similar biases as humans.
Instead of replacing flawed human intuition, these tools have been shown to reinforce some existing biases that afflict disadvantaged groups. This rings true in financial services where digital services continue to breach traditional banking strongholds. Despite improving the number of global unbanked by 5% between 2011 and 2014, the global gender gap in account ownership remained unchanged at 7% over the same 3 year period, according to the World Bank’s Global Findex Database. The disparity widens to 9% in developing countries, as women often face disproportionately higher hurdles to financial independence.
Part of the problem is that the complex mathematical models behind today’s algorithms aren’t all held to the same ethical standard. It happens that a large proportion of software development and oversight is done by men. Though perhaps unintentional, the potential for products to inadvertently adopt some bias or emotion increases.
The algorithms behind online lenders, for instance, exhibit much of the same gender biases as traditional lenders. These new lending platforms are pulling in all kinds of alternative data such as purchase and browsing history, on top of conventional requirements of income, education, and residence, to determine a borrower’s creditworthiness. Many of these determinants regularly favor men despite a growing body of research that proves women tend to save more and make more on-time loan payments.
As a result, women entrepreneurs still receive fewer and smaller business loans with higher interests rates compared to men. This disparity in financing denies women an opportunity to make an equal contribution to economic growth.
Of course, as finance and technology companies look to expand, it would be unwise to go on ignoring potential human biases. As women increase their role as financial decision makers, this rings particularly true: Today women in the United States exercise control over $11 trillion, or 39% of the country’s investable assets.
One possible solution would be to make these tools more transparent, though, for many fintech companies, moving to an open source model means losing their competitive advantage. In some cases, the tech has become so advanced that even the creators have trouble understanding the implications of a machine’s decisions, in which event women must play a greater role in the initial development process. Technology and software is often designed with a clear bias towards its male developers, therefore hiring women to lead product development teams would help move the needle in the right direction.
Although it’s still difficult to eliminate bias altogether, designing diverse organizations with various races and genders increases awareness of these harsh realities. In fact, a recent report from Credit Suisse suggests having women involved in the early stages of a project helps to limit bias and create more inclusive products. For one thing, they can help design products that take into account the distinct financial needs and preferences of women. Generally, digital financial services tend to neglect women’s tendency to save, invest in their children and family, and develop a business.
Failing to incorporate women’s perspective has more dire consequences in poor communities where access to economic resources are generally limited. Recognizing these challenges, Women’s World Banking, a key partner of the Microfinance Capacity Building Initiative of Credit Suisse, is dedicated to ensuring the financial inclusion of women across the globe. In one of their many engagements, Women’s World Banking teamed up with Diamond Bank in 2013 to bring digital savings accounts to low-income Nigerian women. Offering digital products allowed the bank to provide a convenient, reliable, and secure means of saving that catered to women’s specific needs, empowering the women and opening a new market to the bank.
Recognizing the problem is a start, and as women’s economic influence grows around the world, success will depend on inclusive technologies that meet this vast untapped market. In doing so, we can move to lower the presence of bias in modern technology and unlock the potential $12 trillion economic opportunity achieving gender equality could deliver.
This article was produced on behalf of Credit Suisse by Quartz Creative and not by the Quartz editorial staff.