Techno-typing: A New Source of Bias: Our Tech and Data.

• Author: Monterio, Brad J.
• Position: Professional issues

Recent conversations with a colleague--a chief data scientist with one of the Big Four--sparked an interest in a topic not widely discussed in the accounting profession... yet.

The issue is "machine bias," or more plainly, bias that is introduced by the technologies we use and the data we analyze that drives business insight and decision making. Pretty familiar territory to most CPAs these days. You prepare, validate, analyze and consume significant amounts of data in your professional roles. But take heed.

In an era of newfound emphasis on diversity and inclusion in business, shifting the spotlight away from the people involved in decision making to the tools they use--technology and the "black boxes" out of which they gather advanced analytics derived from sophisticated algorithms brings added perspective on what is emerging as an additional layer of complexity for businesses looking to harness the power of diversity and inclusion, not exploit it for the wrong reasons.

Big Data Grows

In a 2016 report released by the U.S. Federal Trade Commission titled "Big Data A Tool for Inclusion or Exclusion. Understanding the Issues" (calcpa.org/FTCBigDataReport), the FTC recognized that, "We are in the era of big data. With a smartphone now in nearly every pocket, a computer in nearly every household, and an ever-increasing number of Internet-connected devices in the marketplace, the amount of consumer data owing throughout the economy continues to increase rapidly."

We know this already: Big data is getting bigger.

However, what the report said next is what concerns us: "The analysis of this data is often valuable to companies and to consumers, as it can guide the development of new products and services, predict the preferences of individuals, help tailor services and opportunities, and guide individualized marketing. At the same time, advocates, academics and others have raised concerns about whether certain uses of big data analytics may harm consumers, particularly low-income and underserved populations."

Therein lies the basis for the FTC's effort to determine whether technology and data analytics are introducing bias and discrimination into business and society.

The FTC report recognized that big data encompasses a "wide range of analytics," but the 2016 summary was focused on the commercial use of consumer data and its impact on low-income and underserved populations. The study goes on to recommend strategies for companies to use technology and analytics to provide advantage to these underserved stakeholders and sidestep the unintentional (or intentional) bias and...