Systemic racism and the digital equality opportunity

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As I write, demonstrations continue around the country and show no signs of slowing. They have been for the most part peaceful and appear united in taking on systemic racism. 

I realize that some people take exception to the term systemic racism. I find it apt, but my goal today is not to argue terminology. There’s no denying that, on average, black people earn less, land fewer job interviews, are arrested more often, receive harsher sentences, and are more likely to be beaten and even killed by police than their white counterparts. Even when researchers take pains to control for extraneous variables, gross disparities remains evident. So, call it what you will—systemic racism or some other name—either way, it exists, and it must end.

The extent to which racism is conscious and overt versus unwitting and subtle is beyond the scope of this post. For now, suffice it to say that no one is immune. And that includes the banking industry. This has been demonstrated by notorious cases like this one in 2012, in which the government found 34,000 instances where a financial institution had charged … 

… African Americans and Hispanics higher fees and rates on mortgages compared with white borrowers with similar credit profiles, according to documents filed in the U.S. District Court for the District of Columbia.  

Or this, more recent civil action against Fannie Mae filed on behalf of the National Fair Housing Alliance and “twenty local fair housing organizations.” The suit alleges that Fannie Mae … 

… did not conduct routine maintenance and marketing of REO properties in predominantly African-American and Latino neighborhoods but did maintain and market its REO properties in predominantly white neighborhoods. According to the complaint, after conducting a lengthy nationwide investigation of over 2,300 Fannie Mae REO properties, Plaintiffs informed Fannie Mae of the details of their findings, but Fannie Mae refused to change its behavior. Fannie Mae’s actions, the complaint alleges, have had a significant harmful impact on neighborhoods of color throughout the country, threatening the residents’ health and safety and diminishing surrounding property values. 

Or this report, just six months ago, from the New York Times

… racism has been baked into the American banking system. There are few black executives in the upper echelons of most financial institutions. Leading banks have recently paid restitution to black employees for isolating them from white peers, placing them in the poorest branches and cutting them off from career opportunities. Black customers are sometimes profiled, viewed with suspicion just for entering a bank and questioned over the most basic transactions. This year, researchers for the National Bureau of Economic Research found that black mortgage borrowers were charged higher interest rates than white borrowers and were denied mortgages that would have been approved for white applicants. 

Nationally published newspaper columnist Leonard Pitts, Jr. put it quite succinctly in his excellent piece earlier this week: “… we process racism as a loathsome character defect, when really, it’s the water in which we swim.”

Clearly, the financial services industry has work to do.  

It won’t be easy. We’re talking about changing human attitudes and behavior, which is a never-ending battle. For proof, trace any social reform’s progress from its inception to the present. Note that I said “to the present,” not “to its attainment.” No group striving for equality has yet reached what could reasonably be deemed “attainment,” progress notwithstanding. 

But that’s no excuse not to try. 

Nor is an easy solution to be found in claims of alleging color-blindness, an empty claim at best. As Adia Harvey Wingfield wrote for The Altantic,  

Many sociologists … are extremely critical of colorblindness as an ideology. They argue that as the mechanisms that reproduce racial inequality have become more covert and obscure than they were during the era of open, legal segregation, the language of explicit racism has given way to a discourse of colorblindness. But they fear that the refusal to take public note of race actually allows people to ignore manifestations of persistent discrimination … 

… it is no longer socially acceptable in many quarters to identify oneself as racist. Instead, many Americans purport not to see color. However, their colorblindness comes at a cost. By claiming that they do not see race, they also can avert their eyes from the ways in which well-meaning people engage in practices that reproduce neighborhood and school segregation, rely on “soft skills” in ways that disadvantage racial minorities in the job market, and hoard opportunities in ways that reserve access to better jobs for white peers. 

How digital banking can hep lead the way

If innate bias is inevitable when humans meet face-to-face, what happens when you remove the faces?  

You can do that with a digital banking transaction. The meeting is not face-to-face but code-to-code. There need be no visual first impression. A digital transaction needn’t be racist, sexist, or anything else-ist. So it’s reasonable to hope that digital banking can rise above human bias. 

Yet reasonable though the hope may be, its outcome is not guaranteed. In a post easier this year, I pointed out that artificial intelligences (AIs) “… mine databases. If biases happen to be built into data-gathering processes—and not necessarily by design—AIs can hardly avoid emerging with similar biases.” I cited a Finextra report quoting Senior Reporter Madhvi Mavadiya, who, writing about gender and hiring practices, pointed out that “… technology can be as biased as humans if it replicates past hiring decisions and in the past, AI recruitment tools have realised that it discriminated against women because it attempted to find employees like its current workforce, namely, men.” The same can happen with respect to race.  

There’s a good chance that biases have already found their way into our databases. We need to root them out. 

Especially with the renewed attention that demonstrations are bringing to the issue, there’s no excuse not to redouble our efforts in purging bias from our digital transactions. While we wait for humans to catch up, digital can lead the way, even set the example, for fairness. 

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TBT: Effects of digital media

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Originally posted June 11, 2018

About two years ago I took a look at sundry fears about the growth of digital media. Not a few people rued a decline in personal interaction (see “Interaction” below). Who knew—well, besides epidemiologists, who have warned of potential pandemics for some time—that in 2020 we would be self-quarantining, and that digital interaction would be vital to making that possible? A blessing in disguise, as it were.


I approach this topic with some reluctance. In no way do I wish even to appear to side with doomsayers who in every technological advance see the end of humankind. Not enough can be said about the wealth of important advances that digital technology has brought to modern life, from the convenient to the lifesaving. Besides, I make my living in digital banking.

Prophets of technological doom have been around a lot longer than you might think. A little over 2,400 years ago, none other than Socrates warned that the written word would bring about the demise of human memory. And five hundred years ago, physician and scientist Conrad Gessner foresaw in the nascent printing industry an avalanche of data that would prove “…both ‘confusing and harmful’ to the mind.”[1] In the last century, radio and television were going to render us illiterate. (That, and “TV will ruin your eyes if you sit too close.”) Today not a few blame video games for violent behavior despite no evidence of causality.

Still, some concerns about our emerging digital world are worth attention.

Literacy—Purists, pedants, and the obsessive-compulsive fret that keyboarding obviates the need for penmanship, and that texting makes u forget how 2 spell & punctuate lol  But perhaps of greater concern is the diminishing need to get out the door and interact face-to-face.

Interaction—We can shop, attend college, do our banking, see movies, check out library books, research, work, converse, share photos, make friends, and more, all while cloistered within our homes. As a result some erosion of interpersonal skills may be going on.[2] And there’s no question that digital anonymity opens a door to untoward behaviors many would suppress in person.[3] While there’s nothing new about bullying—which is not meant to condone or trivialize it—the cyberbullying phenomenon belongs uniquely to this millennium. Its solution is not as simple as blogging or not logging on. And as has been amply and repeatedly demonstrated, social media have the power to bring undo attention and spark over-the-top outrage. For an example, look no further than the Herriman, Utah, teen whose “crime” was to wear an Asian-style dress and assume an Asian stereotype pose for a photo. Regardless of which side of the argument one endorses, surely we can agree that the attention brought upon the teen was out of proportion.

Feedback loops—According to a recent Pew poll, 62 percent of U.S. adults get their news from social media. That doesn’t bode well for those of us who value an informed public. Social media and search engines create a feedback loop by learning and playing to individual biases.[4] They create an illusion that marginal views are widely shared and supported by fact. They can lead to dehumanization of those with opposing views by use of one-dimensional dismissals such as snowflake, libtard, bigot, right/left winger, or Nazi. Moreover, it’s all but impossible to detect a feedback loop from within.

Evolution of retail space—The effects of digital commerce on retail aren’t hard to miss. Retailers are desperately looking for ways to tear customers away from online shopping for a visit to the store. And they must beware customers who arrive to check out products only to return home, find a better price online, and order.

Review site abuses—Retailers also have a healthy respect for, or, depending, fear of ratings sites such as Yelp. Ratings sites are useful for consumers looking for reliable feedback, but they are not necessarily bastions of fairness. Consumers with a grudge, whether reasonable, unreasonable, or fabricated, abuse them with abandon. The human tendency to complain when unhappy and clam up when pleased doesn’t help the situation.

On a more positive note

I haven’t scratched the surface of the perils digital media may enable. But equally long or perhaps longer would be a list of its positive effects. To end on a positive note, let’s remember the many ways in which digital technology is a boon to medicine, education, connectedness, efficiencies, commerce, communication, participation, savings, and more.

In the end, technology is neutral; it is our use of it that turns out either beneficial or harmful. How technology serves or harms is up to us.

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Exclusive offer—illicit access to your bank account, as low as $50

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We humans have never been very good at focusing on more than one thing at a time. (Most people who think they can multitask are kidding themselves.) So it’s not surprising that, with the COVID 19 pandemic dominating headlines and exerting uncommon influence over our daily routines, other bits of news may slip right by. 

I refer in particular to disturbing news about data for sale on the Dark Web. Take, for instance, a cyber attacked on Italian email service provider Email.it reported by TechRadarPro a few weeks ago. It seems that Email.it … 

… suffered a cyber attack that saw the data of over 600,000 users put up for sale on the dark web … data included information such as passwords in plain text, security questions, email content and attachments for users who signed up or used the free email service between 2007 to 2020.

Or, how about this, reported about two weeks ago by WeLifeSecurity

More than 500,000 Zoom accounts are now up for grabs on hacker forums hosted on the dark web. Some are going for less than a US cent apiece while others are given away for free. 

In a statement provided to BleepingComputer, cyber-intelligence company Cybel said that it noticed free Zoom accounts being offered on hacker forums around April 1st as a way for hackers to increase their notoriety. The accounts were posted on text sharing sites where ne’er-do-wells offer lists of email address and password combinations.

Or this, reported about a month ago by Yahoo Finance:

Cybersecurity firm Sixgill … highlighted two devices for sale on the Dark Web, an EMV chip card skimmer and a skimming device to steal credit card information from a gas pump. The “all kind” fuel pump skimmer connects to the pump’s power and can “operate indefinitely,” the post brags. Besides devices that skim people’s data, there’s a lot of data already hacked and ready for use. There’s a trove of data of “bank employees” from a Russian hacker, and a database for sale containing emails from “various staff” at one university.

The marketplace has only grown in volume and breadth since a 2005 McAfee report entitled “The Hidden Data Economy.” “This underground marketplace has evolved to include almost every conceivable cybercrime product for sale or rent,” it said. 

Just six months ago, Forbes reported that it was possible to purchase a “$20,000 bank loan for $30.” It gets worse:

Access to a compromised bank account, known as a “bank log” in cybercrime parlance, with a balance of $10,000 (£7,900), could be yours for $25 (£19.75), for example. While personal information packages that enable a criminal to steal the victim’s identity, or “fullz” as they are known, and achieve a promised $20,000 (£15,800) bank loan cash-out were on offer for just $5 (£4) more. If that sounds cheap, fullz packages start at around $4 (£3) as they are seen as a commodity item within these circles.

How much does it cost to purchase illicit, personal financial information on the Dark Web? Not much, it turns out. 

VPNoverview.com did some digging and found that you purchase someone’s bank details for $50-200, social media info for $12.99 (Dark Web shoppers, it seems, as are prone as any other to view $12.99 as closer to $12 than to $13), and personal data for $40-200. The site warns,

With basic knowledge of your accounts, it can be much easier for hackers and scammers to steal your identity, but just how much would it cost for them to scam their way into your life? There are programs openly available that will force entry to multiple social media accounts for as cheap as $12.99. Using the information they gain from your social media, they can … sell the account on or transfer available funds … verify themselves as you … purchase items using linked cards … [and] steal personal information from private messages / hidden information.

Moreover, it reports, you can pick up a $2,000 Amazon gift card for $700, a PayPal account with a $12,000 balance for $1,200, and a $7,500 money transfer for a mere $1,125.

Writing for Digital Trends about VPNOverview’s report, technology reporter Anita George commented

… hackers can also sell access to the breached databases of various companies. And the report actually lists a few companies with breached databases, the costs for access to these databases, and the number of records a person would have access to once they purchased that access …

In an emailed statement sent to Digital Trends, comments from VPNOverview’s cybersecurity analyst, David Jansen, shed a little light on why VPNOverview researched all this in the first place … “Our findings show that thieves and hackers could easily gain access to your most important accounts and spill your information on the dark web, where it is sold for next to nothing and used for all sorts of malicious purposes. The large-scale availability of stolen and counterfeit passports, driver’s licenses, and online accounts leaves us all vulnerable to identity fraud and cybercrime.”

We no longer have the (small) assurance that only the sophisticated cyber criminal can abscond with personal financial information. The above-referenced McAfee report cautions that “current tools, products, and services can allow anyone to become a cybercriminal, regardless of technical ability.” The authors warn against assuming that …

… there exists a hidden doorway into an underground marketplace for nefarious products that is not accessible to us muggles. In reality, this marketplace is not nearly as well hidden as we imagine, and it certainly does not require prior knowledge of a secret public house and its hidden courtyard.

In the economic depression that is all but certain to follow the current pandemic, let’s hope integrity wins out with the vast majority of the desperate masses.

(I would be remiss if I failed to add that TransArmor Personal Data Protection, from my employer Fiserv, lets businesses tokenize data in motion, in use, and at rest, creating a higher level of security for their customers than ever. Click here to read the Fiserv press release.)

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How will the world look AC?*
*After Covid-19

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*After Covid-19

Post covid kissWe’re fortunate to live in an age where medical and scientific knowledge guide us toward valid preventive measures to control the spread of SARS-CoV-2. Still, it is both good business and good humanity to speculate about the world that will emerge once this horror is behind us. There is widespread agreement that it will look vastly different from the one that began 2020. As Elizabeth Svoboda put it in her recent piece for Discover,

The tsunami-like impact of a global pandemic has a way of drowning out foresight. Right now, it feels impossible to predict what the world will look like next week, let alone next year. Yet behavioral science and the broad sweep of history suggest that COVID-19 will transform our daily lives in the long run.

That’s true but not terribly useful. It’s one thing to say “The Times They Are a-Changin’.” Pinning down the change is another matter entirely. 

We are not without clues. There is no disagreement that the restaurant industry has suffered and will continue to suffer immensely. If telecommuting becomes more of a norm, eateries that manage to survive lockdown will face a vast reduction in business and commuter lunches. Stay-at-home policies have driven more consumers to discover online shopping and delivery services, which will have serious long-term implications for brick-and-mortar retailers. Many gig apps have expanded their service offerings in response to increased demand for delivery services. The demand may persist if not grow but in no way promises to offset other, more widespread losses.

Our daily habits will certainly change. On April 19, PYTMS.com reported:

Our research shows that there is no guarantee that life will go back to the way it was before, even after the pandemic has passed. Only 47.9 percent of all consumers plan to resume the activities they used to do outside their homes, while another 32.1 percent say they plan to do far less outside the home than they had done before.

Continuing the theme, Market Platform Dynamics CEO Karen Webster wrote in a separate PYMTS.com article that …

… only 48 percent of consumers expect to resume their normal activities once the pandemic ends, with another 4 percent saying they will do so once they have childcare for their kids. About a third (32 percent) say they will perform more activities at home and fewer activities away from home, with 16 percent saying they won’t resume normal activities outside of the home after the crisis ends. This means 121 million American adults will not resume their activities in the same way they did before the COVID-19 outbreak. [Emphasis added.]

Adding a cautionary caveat, Webster said, “At least that’s how they feel now.” That’s important to note. People are not great at predicting their own behavior. Still, the numbers are significant, definitely suggestive, and not to be ignored.

In his excellent article for The Financial Brand, “Permanent Working at Home Will Rock Banks and Credit Unions,” consultant/advisor for Peak Performance Consulting Group Jon Voorhees observed, “Pre-pandemic about 5 million employees worked remotely in the U.S. The pandemic has driven many millions more to do so. More firms are recognizing that a remote workforce model can work successfully for their companies.” If many of those companies find telecommuting so advantageous that they opt to stick with it—which is not unlikely—the effects will be far-reaching. Voorhees suggests 10 ways that a telecommuting surge could affect the financial services industry. These include reduced demand for office space; declines in commercial construction; implications for businesses whose markets largely comprise central workforces; the subsequent toll on loan assets; and more.

Biometrics has seen a boost from growing fear of personal contact. PYTMS.com reports:

As organizations including the New York City Policy Department stop using its fingerprint ID entry for employees, there has been a spike in demand for facial recognition technology alternatives. In China, there are already reports of city buses installing facial recognition to detect COVID-19 on buses.

Banking, of course, will need to adapt to the post-pandemic world. In its latest annual World Fintech Report, CapGemini predicts a need for more effective bank-fintech partnerships:

“Businesses will evolve and emerge from the COVID-19 crisis in different and profound ways. For traditional banks, this will translate into an even greater need for digital experience through further collaboration with FinTechs. Since we began this report three years ago, FinTechs have moved from disruptors to mature players, and it is now essential for incumbent banks to consider them not only as formidable competitors, but as necessary partners of choice to meet changing consumer expectations,” comments Anirban Bose, CEO of Capgemini’s Financial Services and Member of the Group Executive Board.

We are living through an historic time, a time of upheaval. Yet upheaval can bring opportunity if we let it. The Financial Brand’s Jim Marous summed up the matter well when he recently wrote:

Banks and credit unions must use this time of disruption to consider reinventing themselves from the inside out. It is a time when we need to better understand the way consumers expect their financial institution to support their financial needs. This includes the way banks and credit unions use data, AI, technology and human resources to impact marketing, innovation and the digital delivery of products and services.

Onward.

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*After Covid-19

It’s World Password Day, and the news isn’t encouraging

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Tip: Don’t use 12345.

Tip: Don’t use 123456.

Though cybersecurity and cyber fraud are frequent topics of interest, one cannot bring up the importance of solid passwords often enough. In that spirit, here’s wishing you a happy World Password Day.

Ready for some scary facts? According to a new report from LastPass91 percent of us agree that using the same password for everything is dangerous, but 66 percent of us still do it. Fifty-two percent of us haven’t changed our passwords in the last year. Even when we know that a brand we do business with online has suffered a breach, 52 percent of us don’t bother changing our password.

About three years ago, I listed the 10 most frequently used passwords. (Click here to read the post.) Here they are:

  1. 123456
  2. 123456789
  3. qwerty
  4. 12345678
  5. 111111
  6. 1234567890
  7. 1234567
  8. password
  9. 123123
  10. 987654321

If you wondered why we need a World Password Day, now you know.

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