Episode 5: Let’s Talk FinCrime and Women in the Industry

Research shows that when more women are in the room for decision-making conversations, the outcome isn’t just better for the women - the outcome is better for everyone.  Although gender diversity in the financial crime industry is shifting, what can we do to bring more voices to the table?

In this episode of Let’s Talk FinCrime, we’ll talk to Kelle Profita and Dr. Kimberly Schanz to hear how gender inclusion is changing the industry for the better.

You can hear more of our conversation with Kelle and Dr. Schanz  by visiting actimize.nice.com/podcast

Transcript

Unknown: 0:05

Hi, and welcome to Let's talk fin crime, the show where we explain what compliance and financial crime are, and most importantly, what it means for you. As always, I'm your host, Dave Ackerman. I'm a lawyer, former Chief Compliance Officer and financial regulation expert for nice atomise. based in New York City, we strive to bring you conversations with some of the most interesting people we can find. All designed to help you understand what's happening in the financial world and how it affects your daily life. This episode is particularly exciting for me, we are dedicating this to celebrating Women's History Month, which is an annual declared month that highlights the contributions of women to events in history and contemporary society. It's no secret that finance is a male dominated industry. Although that dynamic is shifting a little bit in this episode of Let's talk fin crime, we're going to discuss some of the stories of how inclusion of more women in the industry is changing it for the better. So with that I actually have two special guests today. First is Kelly perfetta, a vice president in strategy and mergers and acquisitions integration management at a global fortune 500 investment bank, where she focuses on integrating new companies and technologies. Super cool. Kelly has also consulted on international regulatory compliance for global investment banks, rich tech FinTech startups. Pretty much everyone that you could think of in addition to being a recovering lawyer from my alma mater, the Maurice a dean School of Law at Hofstra University. Joining Kelly is Dr. Kimberly Schatz, an assistant professor of criminal justice, and victimology and Victim Services at Stockton University in Galloway, New Jersey, Dr. Schatz is a doctor of psychology, examining how people's media watching habits can influence their perceptions when presented with the same situations in the real world. So with that, I'm excited to introduce Kelly and Kim. Ladies, thank you so much for joining us. Thanks for having me. Yeah, excited to be here. So this is going to be a little bit of a different type of episode. Whereas I'm gonna sit back and do very little hopefully. And I really would just love to hear your answers and your experiences based on a couple of different prompts that I know people are talking about in the industry. So Kelly, let's start off with you. If you could please give us an example of how gender roles or how women are viewed in in the financial workplace, and maybe an example of how this has affected your career. Wow, Dave, have you as a man had to spend agonizing hours over your emails to make sure that they're nice enough? Have you had to call people after meetings to apologize for your tone? Because they will refuse to work with you if you're difficult? Do you often get asked to take notes during the meeting but not contribute to it? How many times have you had to say sorry, and stop talking during a meeting because someone else speaks over you. Like this is the reality of being a woman in the workplace, we are often disregarded, we are often marginalized, we are often set to the side, because this, like you said is a really male dominated workplace. And there hasn't been a lot of cultural and structural shifts to accommodate the gender differences of people at work. I know that sounds really bleak. So there are some good things that I've seen happen here too, you know, there's a lot of push towards gender equity and in finance, especially with diversity efforts. From a board perspective, a ton of massive funding pushes to get people more access to capital, and understand financial tools. And we're doing a lot to increase the pipeline of women and female presenting people in the workplace at a lower levels. And I think that perception is bolstered by what we see in the media for sure. So I'm like, Can you think of a single movie about the finance, business or field where the main characters been a woman? Right, there are very few and to be fair, most of the media around the finance field is focused on financial crime. Of course, the because entertainment is less entertained by the boring ins and outs of sending emails and talking about strategies and things like that. But you see if there are women in these movies featured at all they're playing supporting roles, they're playing secretaries, they're playing the romantic interest of the main character who is committing the financial crime or they are being manipulated or exploited because of their very specific position that fulfills a very specific need in the larger scheme. Crime overall. So, when you're watching movies or TV shows, you're not seeing women in these positions. So for, you know, high schoolers or college students who are looking for career paths that may not occur to female college students or high schoolers as an option, because they're just not seeing it in their everyday life. And can I know that there's been some really amazing research done in the past five years about our perceptions for risk taking, that men are this swagger driven, very, very risk oriented population. And I think that there's some research coming out of UMass that said, I think genders make 95% of the same resources. Could you talk a little bit about like, why we still have this pervasive perception of men being capable and the risk takers where women really are risk averse, and like, don't want to take the risk, even though research is telling us that that's absolutely not true. Where would you like to start? We can talk about our perceptions of toxic masculinity and how that risk taking really build into this kind of idea of masculinity being an men being strong, and being able to make these decisions and deal with the consequences and things like that. We can talk about gender roles where men are supposed to be the breadwinners, and women are supposed to be the people who take care of the breadwinners, whether in the workplace or at home. We can talk about perceptions in our presentations, or portrayals in the media of women in general, we're seeing, thankfully, more TV shows where women are the predominant main characters, and they are fulfilling strong roles. But if you notice, the trend is not in finance. It's not and it's not really about. And they're not usually like leaders of corporations, right, we have Madam Secretary, where she becomes, you know, a political leader, we have scandal where she's the head of a kind of PR firm. Some of these are more kind of oriented toward, quote unquote, female oriented careers anyway. So that just reinforces more of the gender roles and the expectations of what women should be doing. There are very few TV shows or movies where you see women conducting fortune 500, country companies, very few TV shows where women are the ones who are, you know, directing all of the people and making all of the decisions. And I think a lot of all of those things come into play, right, we learn about what is expected from all of those process from all those places. This is insanely fascinating. And I mean, I'm learning a lot just listening, I want to take a pivot for a second. So I actually, so one of the things that I've noticed throughout my career is that the women that I have worked with, especially ones at the upper echelons of an organization have been just light years, in some cases above their male counterparts. And I've always kind of attributed that to the the system in which they had to excel, they had to be that much better. And so I'm curious, could you know, maybe Kelly, could you talk about the idea of job efficacy? And I personally believe that obviously, not including a particular gender or a particular population in decision making processes, that has to translate to real dollars? I mean, there there there has to be an impact. Can you kind of speak on that or give a little bit of insight that you have seen over the course of your career? Sure. So there's actually this awesome cognitive psychologist who wrote a book called how women decide. And I points out that we are as a society conditioned to implicitly trust men, but women making the same decision under the same conditions are scrutinized. And their their judgment is called into question. their effectiveness is called into question. And it's the research that the the author has done has shown that when more women are in the room, the decision making outcomes aren't just better for women, they're better for everyone. So what I've seen in my field is it's really baffling to me that if we're charged with making the best decisions for our clients, making sure that our products deliver the best in class services. Why are we excluding voices that can help us make better decision making overall like we're leaving money on the table if we are excluding women from having an insight into managing risk into investment decisions? You know, we've seen research come out that divorce boards translate to real value real ROI increases for For folks, but it's still that there's that implicit bias against having women in the room or that there's this sense of tokenism. Right, we have one woman, we've checked our box, we are diverse now. And oftentimes, like, I listen, I want to have a seat at the table, because I just need to get someone in the room to have their voice present. But it's this idea that why are we actively excluding voices? Why are we leaving money on the table? Why are we not serving our clients to the best of our abilities? Why are we not creating technologies that are, have gender equity built in? You know, we're seeing especially I think, Dave, in your world, you know, we have these these risk API's, if the people who are creating the eyes have implicit bias, and are missing risk, why are we expecting the AI to not then be flawed and have their the same type of bias present, even though we have data, you know, that can give us a whole picture of the risk? It's simply because we're not including women and female presenting voices in the room when those decisions are being made. I mean, I think you can see that in kind of the portrayals of, of financial crime in the media as well, right? So I can think of multiple male financial crime offenders. We can talk about Jordan Belfort, who was the Wolf of Wall Street, right? The guys from Enron, we can talk about Bernie Madoff, all those kinds of things. The only female case that I that has been notarized has been Martha Stewart, and probably because of her celebrity, but she actually they never actually charged her with. Like anything stock related, they charged her with like obstruction of justice, and something other minor that wasn't actually ended up to be classified as a financial crime. But they spent ridiculous amounts of money and ridiculous amounts of time trying to prove that she had engaged in insider trading. And I think the real question there is, would they have spent that much time scrutinizing her decisions? Had she been a man? Right? Had she been the executive of a company? And had she been man doing the same thing under the same consent can like conditions would she have been what that decision have been scrutinized the same way. And I think, in a field, like an organization that investigates these things, which also tend to be predominantly male, we have to see how those decisions are made based on who the person is, and who's investigating them as well. Which only goes to kind of prove your point about this idea that we need to have more diverse, particularly more female voices within the room. Well, that almost it almost then becomes a self perpetuating prophecy, right? If you're, if the the technology and the investigators and the individuals who are designing the policies and procedures to look for financial crime, are thinking like, essentially thinking like a man, then I don't think it's any wonder that those are the only things that we are then able to find. I could all but guarantee you that there are plenty of women, unfortunately, engaging in financial crime throughout the world. But we may be at a disadvantage to then find them because the data models that are being created are being created from one perspective. So you know, Kim, let me let me kind of pivot this for a second. I'm curious, how much of this do you think based on your research and your experience? Is the tail wagging the dog? So what I'm hoping to see is, as Kelly had alluded to, this is getting addressed in various different forms, which is insanely positive, but then how long till we start seeing that then trickle into the overall perception in media and movies and things that actually do have a major impact on people's perceptions? So I think that's not a quantifiable answer, I guess. Um, you know, it's, we know that cultural change is slow, in general of all kinds. And, but one of the biggest ways that we can see cultural changes if we start to see mass media change with it. So I think if you start to see you know, even now with the push to have more racial diversity, we are seeing more movies, more television shows come up with care main characters who are women who are black, Hispanic, Asian. You know, all the and so we're starting to we're starting to see some diversity for sure. I think when you'll start to see real change is when not just the entertainment media, but also the the kind of news media starts to praise and show female women who are succeeding in finance. I think that when we start seeing awards given to women or women being praised publicly, is that when you'll start to see the change, for sure. And something that I've noticed here, and I see it as a good trend, like you said, cultural changes, very slow structural changes very slow, is that now we're really committed to having data that is disproving our biases. So something that I specifically see in my world is access to capital, like we know that women of all kinds are underfunded, they're not getting the same type of money and access to money and access to tools and access to guidance that men are. And even just the fact that we now have data that actually points out that this is a problem means that people now have, I think, almost the cover to be able to solve that, right? We can't solve problems we don't know about now we have data that explicitly says there's a problem. And I'm starting to see a lot more commitment from firms of all shapes and sizes. And, and, you know, making sure that they are addressing these this problem, they're essentially putting their money where their mouth is, which I don't want to you know, sometimes it's a bandaid, sometimes it's it's a true meaningful cultural shift. But at least we're starting to say, this is a problem, we're not making it up, we believe the data because we like numbers, and people are starting to really commit the capital that is needed to address the structural inequities. So let's take a little bit of a pivot here and start kind of moving towards how we engage in these changes and the positive benefits that we can derive from that. One of the things that has been critical in my career has been mentorship, not just when I first started out, gaining mentors to gain different perspectives, I mean, I still use multiple mentors to this day, in order to help think differently and advance my career, but then at the same time, also mentoring the next generation. So you know, Kelly might want to throw this back to you for a second in finance this concept of mentor ship. I mean, is that different? If you're a woman, I would presume so. But I'm just kind of curious, like, how has that been in your experience, and something that you can comment on like that? Sure. I mean, in my experience, good mentorship, and good management for that matter is genderless. However, good mentorship is not gender blind. And it doesn't mean that you should seek out only same gender, mentors and managers, there's really no guarantee that you know, working with someone of your same gender means that they'll give better advice than someone who has a completely different point of view. One of the things that I look for in a mentor is someone who can offer thoughtful, thoughtful advice based on our experiences mine and theirs. I've had incredibly supportive mentors and managers of all gender identities, I've had an incredibly difficult ones of all gender identities. So some of the things I really look for in a mentorship relationship is someone who can give me directions about the best way to get to where I want to go, because they've either been there or they know the area, I'm not asking them for a step by step guide about what I need to do. I'm asking them to give me advice, give me their perspective, and have it be informed by my own experiences. So that's, that's how I approach mentorship relationships. Again, it's gender list, but it's not gender blind, I don't need someone to pretend that I'm not a woman. I need someone as a mentor to listen to my experiences as a woman and as a female presenting person in the workplace, and have that in mind as they give me their advice. And I think that, you know, you you speak about that specifically in the workplace. But we know there's a lot of research on stereotype threat relevant to women within finance, but also within schools and learning math. And, you know, math is the basis of Finance. Right? So it really starts at the very beginning. Like, we know that stereotype threat in terms of being very good at math exists in children, you know, as as young as elementary school age. So I think if we can find, as Kelly was speaking mentors at all levels, to encourage girls, women to engage in math based careers, like finance, like science to show that there is no that women can do math, they can do finance, they can succeed in these fields just as well as men can and have that even increases. is the likelihood that a there are going to be mentors at your level, Kelly, but they're also going to be mentees, too for those mentors at that level as we continue through this process. Kim, I absolutely love that you brought that up. Because I fell, I didn't realize that I was not bad at math, I think until my mid 20s. I had always been told, you know, early on, like, oh, numbers just don't make sense for you like you, you're your reader. Like, that's what you do. And so I feel like I was really trapped into that, and really dissuaded from taking finance classes from taking advanced business classes. And then I think when I like I somehow stumbled upon like, very intense, very, like stochastic modeling. And I was like, Oh, no, I did this. This makes tons of sense. So it's so funny to me how we are creating these pipelines based on early childhood experiences, and never correcting them. And we really, you know, we're not trying to solve root problems. We're trying to address symptoms later on, like in hiring initiatives. But we can address them in so many different ways in our educational systems and our support systems and our structural equities for different types of families. Like, there are so many, so many ways to tackle this problem. I must be the example that disproves the rule, because there's a reason I went into law school, and then into compliance and regulatory interpretation. And I assure you, it is not because of my proficiency with math. So we have calculators for everything. Right, exactly. That's what my students say to. So so then let's let's take that kind of positive approach and the things that we have seen in those changes. Kim moving forward, like, what would you like to see, in companies moving forward? What makes the two of you hopeful, and if possible, can get kind of put a little bit of angst behind it, like, you know, what the research is showing? And how, and how moving forward in that direction, or incorporating different types of strategies is actually beneficial in multiple ways? Well, I'm always happy when we see industries use data and use it appropriately. I'm at my core, I am an empiricist. Right. So it is important to me that we are making decisions that are informed by empirical information. So the research that Kelly was talking about showing that men and women make similar risk decisions. There's a lot of research that shows that, that teases that it's potential that if more women are in these higher positions, that more ethical decisions may be made, and that the likelihood of financial crime might actually decrease. So I think there's a lot of information. And my my hope is that we're, we're just using it, and we're using it appropriately, right, because because numbers can be used in multiple ways we all know, all of you know, more so than I do for sure that numbers can be used for good and they can be used for bad. So I would hope that the data that is out there that companies are using that, and they're using it to show both in efficacy but also in money in dollars, because we can't forget that we live in a capitalistic society where, particularly in finance, the whole point is to make some type of dollars. And therefore, it's really important that not only are we showing that the data is improving, you know, the workplace, the environment, but also the company itself, its efficacy and doing what it needs to do and its profitability. And that's really important to be able to show, and also to highlight that, that women as a gender also breaks down into other other categories, right? We have black women, indigenous women, Hispanic women. And those groups of women are certainly added more of a disadvantage than white women are. So recognizing that it's not just women as a single category, but women as kind of a categorized category and nested category in which we kind of need to bring everyone up and recognize all those separate categories that also need to be represented. And then seeing that that is also just increasing the efficacy and profitability of a company. Yeah, I think you bring up so many great points, like women as agenda are not monolithic. Like you were saying, you know, we're using data to identify underserved communities and targeted underserved communities. Black women, as a community have different financial needs than indigenous than Latin x. And we are starting to be able to shape these types of outreach programs that we're seeing and really commit capital and tools to people to uplift entire their own entire communities, but we aren't looking at it as you know, men versus women or A black and white thing. And on that vein, you know, what we're seeing when we have more women in leadership positions is, like you said that better decision making, that it's not a choice between ethics and profitability. It's not a choice of not committing capital to the types of, you know, philanthropic programs like we doing good can also do well for you. And I think that we're starting to see that myth, you know, the myth of we're either one or the other dispel. And then selfishly, for me, you know, what we're seeing in the workplace is that we have this great engagement, we've, we've committed a ton of time and effort and money to hiring good people early on in their careers. And then what we're seeing is, it's something called the broken run. So right around the time when, when women are advancing to VP and upwards, that pipeline breaks down. So I'm really interested in seeing what the industry can do to move that forward to make sure that women and people in all sorts of different family structures have the ability to either return to the workforce or are supported in the workforce to make sure that we still can, we can keep that pipeline going, you know, the numbers are encouraging. We're seeing more women in C suites, we're seeing more women as heads of companies. But it doesn't mean that we've done our job, like we aren't going to get to a magic number and say, Yep, we solved it, we solved all gender inequity in the workplace. So for me, and again, very selfishly, I am very privileged to have the type of career that I've had, and, you know, be who I am as my identity in the workplace. But I want to see the fact that I can still progress and I can still advance and that we make structural changes that make it easier for everyone, not just me. That's I mean, this is amazing. And it's really eye opening in a lot of ways I love this concept of making using data to to for good, right. And it also folds in on itself now where if you have various different voices in the room of how to analyze that data, I mean, that almost turns into a competitive advantage in any facet, no matter where you are in, in finance, whether it's compliance or I mean, I'm not sure if I really want to be the one advocating for more women in financial crime. But I would love to be able to be the person who's advocating for the use of data in different ways in different formats so that those people who are out there can be more effectively caught and brought to justice. Kelly profit and Dr. Kim chance, as you can see, are just absolute forces to be reckoned with. Thanks again for listening. Please don't forget to subscribe if you have an idea for a show or if you're interested in being a guest. We would love to hear from you. So drop us a line at podcast at nice ACTA Mize comm Don't forget we have bonus content for every episode, including this one. We are going to continue the conversation. That information will be available at active minds.nice.com forward slash podcast. I want to thank you both again for being with us. And we're going to continue this conversation a little bit for the listeners who who go for the bonus content but for all of you who are leaving us now. Thank you very much and we will see you on the next episode. of let's talk fincon