In Conversation with Janet Truncale: Understanding AI’s Role in Developing Financial Solutions for Women

November 3, 2021

Janet Truncale is Vice Chair and Regional Managing Partner of the Americas Financial Services Organization (FSO), EY and Women’s World Banking’s Board Chair. A seasoned business leader, she oversees a diverse team of more than 14,000 professionals who are based in over 90 cities across the Americas. Janet works closely with EY’s clients to build a financial services industry in which financial institutions are trusted and flourish, customers’ financial goals are attainable, and the global economy is healthy, growing and secure.

With more than 28 years of extensive experience in the global financial services marketplace, Janet has established a reputation as a strategic operating executive and innovative leader. Throughout her career, she has provided assurance and advisory services to leading Fortune 500 companies and worked with boards, audit committees and senior management to resolve complex business issues.

Q: As artificial intelligence (AI) and machine learning (ML) revolutionize and disrupt financial services, how can technology play a role in advancing financial inclusion and economic empowerment for women?

Technology can potentially play a major role in promoting both financial inclusion and economic empowerment for women. We know that gender-based bias has frequently been ingrained in technology (some of it unconsciously), and it can’t be rooted out successfully without significant, proactive efforts across financial services, the tech industry and the larger ecosystem with which they interact.

The commitment to change needs to start at the board level and cascade throughout an organization’s corporate, technology and human capital strategies. Clear and specific policies can help identify and mitigate bias and proactively build in fairness, with standards of fairness clearly defined and implemented. Periodic reviews of algorithms are essential. Also critical is the active recruitment and advancement of women so that they are both builders and end users of AI-enabled products and services.

Q: What has this technological disruption meant for low-income women around the world, especially those in emerging markets, who may struggle to access digital financial services?

The digitization of financial services is having a powerful effect on financial access in both developed and emerging markets. According to a recent IMF report, “Digital finance is increasing financial inclusion, even where traditional financial inclusion is declining.” The report cited that in all 52 countries it analyzed, “digital financial inclusion improved between 2014 and 2017, particularly in Africa and Asia, and even where traditional financial inclusion was stalling or declining.” “Thin-file” customers, who lack the traditional financial footprint to receive a credit score, may now be eligible as financial institutions and fintechs increasingly leverage AI and machine learning to create and improve their credit rating systems. Data can now be harvested from sources including mobile phones and tablets for this purpose. As a result, access to digital financial services is playing an important role in closing the gender gap, particularly in the Middle East and Africa. 

Q: How important are digital and financial literacy efforts for girls and women to ensure they can participate in global digital platforms?

One area that I have been focused on in partnership with Women’s World Banking is moving from financial literacy to financial capability. Studies have shown that knowledge alone cannot help us bridge the wealth gap. The concept of financial capability is built on the idea that to truly change financial behaviors (beyond just learning about finance) requires growing how women can engage with financial services through behavioral science. The idea of “digital financial capability” will bring together the knowledge, skills and attitudes women need to help reach their financial goals. What is so exciting about digital financial services is the ongoing potential for financial solutions that are economically empowering women through enhanced financial capability, particularly low-income women around the world. Source.

Q: What is EY’s approach towards advancing representation for women in STEM and technology?

As part of the EY Women in Technology Movement, EY created the STEM Tribe App, which encourages girls ages 13-18 to pursue STEM learning and careers. This app is a free platform that engages girls on their mobile devices with a gamified STEM experience. It features modules focused on science such as climate change and space exploration, technology such as AI and inspirational stories of women in STEM. The app has already launched for 6,000 girls in Delhi schools, with Atlanta and Seattle to follow. We are excited to be playing an active role in closing the gender gap in technology by creating talent pipelines and pathways to equalize the opportunity for women to thrive in technology. In addition, as part of our effort to advance gender equality, we launched Women. Fast forward – the EY global platform that engages our people, our clients and our communities to empower a diverse workforce through education, mentorship, innovation, and entrepreneurial opportunities. Source. 

Q: How can women in developing countries become aware of the innovative financial products and services intended to support them?

Financial services providers – both institutions and fintechs – need to build more inclusive solutions, as well as make more customers aware of the offerings available to them. By examining the What, When, Where, and How of marketing solutions to women, financial services providers can ensure that they are proactively marketing their products and solutions using an inclusive strategy. For example, Women’s World Banking recently partnered with a bank in Bangladesh to help women factory workers better understand how to make peer-to-peer (P2P) transfers on their own. They did this by tapping into a trusted network of peer ambassadors who offered coaching and mentoring to the women factory workers, helping to build their confidence. Source 1; Source 2.

Q: What are the risks for women with regard to data privacy and protection? How do we mitigate potential data risks for women?

Data breaches create more risks for women and gender-diverse populations who may be at greater risk of harassment or violence. With the vast amount of data being stored and transmitted, data privacy is essential, and the concept of informed consent is vital to its maintenance. Implementation of a secure, consent-based architecture, where consent to share data is given voluntarily and on a well-informed and competent basis, helps reduce risk to women. In developing countries, consent architecture also allows users to digitally share their data with service providers in exchange for easier access to credit and insurance and can play a significant role in facilitating small business lending to benefit women.

Q: The rapid evolution of technology and emergence of innovative fintechs may be followed by increased regulation. What are your thoughts on the impact of regulation and how it will affect progress in advancing financial inclusion for women?

Women’s World Banking has done incredible research into the algorithmic bias that disadvantages women in finance and has looked at the often-spirited international discussion around how best to regulate technology, mitigate bias and ensure that inclusive technology is being introduced and made available in the market. Some financial institutions and fintechs may see self-regulation as a moral imperative, while others will be spurred to pursue fairness as an effective tool to realize profitable business opportunities and increase market potential. In more mature markets, some might see regulation as inevitable, whereas in emerging markets many digital lenders remain unlikely to be subjected to regulatory oversight. Even in markets with regulation, data fairness could still benefit from greater focus and active encouragement.

Data fairness could also benefit from greater alignment between the private sector and regulators. As an EY global survey conducted in collaboration with The Future Society indicated, coordination between both sets of stakeholders is critical to successfully developing and implementing pragmatic policy and governance approaches that are informed by realities on the ground. A multi-stakeholder approach is needed to deal with these inherently complex issues, and the private sector has a vital role to play alongside policymakers. Source 1; Source 2.

Q: Looking down the road, what do you foresee as the biggest change or improvement for low-income women because of technology, including AI?

As the incredible growth of digital tools in banking, investing and more continues around the globe, the future of managing finances will be increasingly digital. For low-income women, the ability to leverage technology will empower them to make more informed financial decisions and will help advance global financial inclusion on a sustainable basis. EY actively supports this worthy goal and is proud to sponsor Women’s World Banking’s annual Fintech Innovation Challenge as part of this effort. The Challenge gives fintechs an opportunity to present innovative solutions and business models that help build economic security and prosperity for unbanked and underserved women. Bold solutions are needed to inspire future entrepreneurs to drive greater financial inclusion, and the Challenge is dedicated to that mission. Source.