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A successful DEI program is built on data and relationships

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Leverage data and relationships – that, in a nutshell, is Fifth Third Bank’s plan to promote diversity, equity and inclusion.

Stephanie Smith, who heads the bank’s DEI efforts, tells us more about building a program to provide greater access and opportunity, both in the bank and in the community.

A few takeaways from our conversation:

  • Following where the data leads takes away guesswork and eliminates outdated assumptions, while also creating a structure to respond to future issues.
  • Employees, customers and community leaders will be constantly comparing a bank’s words to its actions. Gaps between the two undermine trust.
  • The biggest thing she has learned over her 20-plus years in banking is that it’s all about the relationships — how those relationships are built, grown and maintained.

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Below is a full transcript of my interview with Stephanie Smith.

Stephanie, in preparing for our conversation, I poked around a bit on the internet. I saw that Fifth Third is on a number of “best of” lists. This includes best places to work for diversity, best for disability-related issues. So with that kind of success that you’re seeing, let me ask you how the bank thinks about DEI – diversity, equity and inclusion – in a broad sense, and what it’s doing both internally and externally in terms of carrying out its values?

Terry, that’s a great question. I’ll start off by answering it by saying that we have been on an inclusion and diversity journey. And so we didn’t just start looking at diversity and inclusion after the events of May 2020 with the murder of George Floyd. We’d already been engaged very vigorously in some actions that we thought could close the gap as it relates to inclusion, diversity, and really equity. And so one of those things is, since 2011, we’ve been doing an internal pay equity analysis. Then in 2016, we increased our minimum wage by 50 percent between 2016 and 2018, from $12 to $18 an hour. And then in 2019, when the city of Cincinnati passed an ordinance, which prohibited corporations within the city’s limits from asking for and requesting historic salary, pay wage information, Fifth Third not only roll that out within Cincinnati but across our footprint. And as you know, with women making pretty much 74 to 75 cents on the dollar, women of color may be making 65 cents on the dollar, where you start is how the trend gets continued. It’s how it becomes systemic. And so with women, minorities and other underrepresented groups, they can now come in and say, “Hey, this is what I believe a fair compensation looks like for this position” without providing a W-2 that continues to keep them underpaid. As far as externally, obviously, Fifth Third has done a lot around financial literacy. In 2015, 2016, we launched our $32 billion commitment to invest in our communities, in our customers. And what we ended up with … that was a five-year track record … we ended up in 2020, December 31, 2020 with a $41.6 billion commitment to our communities, well exceeding what we thought we were going to be able to accomplish. So those are just some of the examples of the internal and external efforts that Fifth Third is engaged in to try to ensure there’s equal access for all, both for our employees, our customers, and our communities.

So with that background, with that vision, and the journey and the achievements that you’ve had over the past few years, what does the day-to-day job of the Chief Inclusion and Diversity Officer look like at Fifth Third? What’s your day-to-day look like?

My day to day looks like continuous improvement. What we’ve learned, Terry, from participating in benchmarking surveys, engaging with our communities, engaging with our industry groups, the Banking Administration Institute, the Bank Policy Institute, the Federal Reserve Bank of Cleveland and of Cincinnati, and many other industry groups and organizations that I partner with, is that if you stop where you’re at, you’ll stay where you are. And so my job is to continue to look for opportunities for us to improve our efforts around inclusion and diversity. We are not there yet. One of the things that we’re looking at, a new initiative, is getting into the area of neurodiversity, working with and hiring individuals, adults higher on the autism spectrum. And we’re really excited about this because, within that classification of diversity, there’s probably a 70 percent to 75 percent unemployment or underemployment rate of individuals who are identifying as neurodiverse. And we know the statistics say that one out of eight Americans is a person on the autism spectrum. We believe that it is important that we be inclusive, looking beyond just the usual race, gender, ethnicity. So my job is to ensure there’s a space and a place for all diverse groups, and that’s pretty much everybody.

So Stephanie, let me widen the discussion a bit to the industry on the whole. Based on your experience and what you see out there, what do you think the financial industry is doing well in terms of advancing the goals of diversity, equity and inclusion? And on the other side of the ledger, what are the key challenges? What are the obstacles that come up when you’re talking to peers, and how do you address those?

The reality is, is that when you’re talking about a conversation for specific groups, other groups believe that you’re not talking about them. So we’ve been great at having these conversations and challenging ourselves to have these conversations. But we also have to keep in mind that we have to bring all along in the journey, or as many as can and want to come along with us in the journey of Fifth Third. And so, while we are elevating the conversations around race, gender, pay equity, inclusion and diversity, that shouldn’t exclude anyone – veterans, our other employees, our young professionals – from having and engaging in these conversations and understanding that the ability to have a voice means the responsibility of giving a voice. So while we’re having conversations, we want to make sure that those conversations are inclusive and people feel that they have a voice in those conversations. The key challenges and obstacles for the industry are the same as the benefits: conversation. We’re talking about challenging conversations. In order to have those, you have to have courage. You have to be willing to be authentic and transparent. And so, sometimes it’s easier to shut down and turn off than it is to actively and authentically engage. I would say we also need to ensure that after we take… as we’re considering certain actions and steps to take, that we make sure that we put measures, metrics, dashboards, scorecards and accountability in place. Because the only way we’re going to know how we’re going to get to a financial goal is that we look at, we predict, what we feel we’re going to do based upon what we’re putting in place today, and then we have measures in place – dashboards, scorecards – from a financial metrics perspective in order to ensure that we attained and achieved the business outcomes that we’re looking for. That is no different as it relates to diversity, equity, inclusion. In order to ensure we have the change that we’re anticipating, we have to make sure that we’re inputting the right measures, the right dashboards, scorecards so that we can come out with the right result.

Diversity in the workplace is one thing. Equity and inclusion, that’s on another level. It’s one thing to hit a diversity hiring goal, and it’s another to level the playing field in terms of opportunities for mentoring, for those high profile assignments that get people noticed, for career advancement in general. So Stephanie, what do you see as the keys to advance the E and the I components of DEI?

Again, Terry, it’s all going to boil down to data. So one of the things that we’ve done, underneath our employee work stream, is that we’ve actually looked at our workforce data. And so this is something that we’ve endeavored in for the first time. And then we had a third-party consultant review our entire employee lifecycle from a diversity perspective, looking at onboarding, recruiting, talent management, performance management, exit surveys. So before you can figure out where the solve is or what the solution is, you have to figure out where are the gaps. And then we did some qualitative assessments and listening sessions. We actually hired a company, Synergy Incorporated, that for the next three years of our initiative accelerating racial equality, equity and inclusion, they will be interviewing about 1,200 of our employees in 60-plus focus groups to ensure that the changes that we think are happening, Terry, are actually happening. So we’ve got data informing us. We also have our employees informing us. We’ve done some consumer insight with our diverse consumers to hear their voice and what their needs are from a product and a solution. So it is a very complex and holistic approach to our employees, our customers and our communities, starting with data, then creating hypothesis, and then deciding the outcomes, then deciding the strategies and tactics that are going to get us the outcomes that we want as it relates to more diverse workforce, customer base, and being successful in all communities.

Your previous position was heading up supplier diversity at Fifth Third. So what were some of the key things that you achieved there? And how did that experience prepare you for this broader role that you have now?

The bank had been kind of doing supplier diversity for a period, but our buying function, our procurement function was not centralized. So supplier diversity really did not have line of sight to the real buying opportunities across the enterprise because our buying function was not centralized. It was fragmented in several areas, regions, et cetera. So in 2015, sourcing/procurement was centralized and the role was stood up for directors for the first director of supply diversity, which I was honored to have and represent the bank. Once you have the proper structure in place, then you can begin to execute. So I was able to build a strategy. I was able to pull the eight best practices, which are well known in the supplier diversity space. So I was able to take those eight best practices and those pillars, of which there were probably 125 metrics which created a supplier diversity scorecard, where I could actually measure the process of our program against established metrics that were probably 30 to 40 years old. And so in order to get the best outcomes, you have to implement the best practices. And so we implemented the best practices. Our spend year in 2014 was probably around, it was less than one percent, probably closer to 0.5, difficult to measure. By 2018 year-end, our supplier diversity spend was 9.6 percent. As a result of those efforts, the organization came to me in February of 2019 and asked if I would endeavor to do this role because the challenges and barriers to diversity are fairly similar. It’s about access, it’s about relationship, it’s about opportunity, the same on the supplier side as on the employee side. Are diverse employees getting access to opportunities? Are they getting the development, the investment, the attention that others are getting within the same work experience?

Both internally and externally, I’d imagine, Stephanie, that for your D&I efforts to be successful, you need to build up a certain level of trust – trust with employees and also trust with the communities in which you work. So that’s not an overnight thing. What’s the strategy there? How do you build trust?

The only way to build trust, and that is with time – with time and with proven actions and steps. It’s one thing for us to say that we stand against racism, and it’s another thing for us to pull our workforce data to review it. It’s one thing for us to say that we care about our communities, and it’s another thing to announce today that we will be investing $180 million in nine neighborhoods for transformational revitalization. That’s what people are looking for. They’re looking for your actions and your words to be equal. That takes time. You can only get results over time. So a year and a half later, in 2020, we were making statements and saying what we wanted to do, saying who we wanted to be. 2021, we are starting to dive into the data, pull the information, establish dashboards, scorecards, metrics and make critical investments to show to the communities, to show to our customers and our employees that “What we said, you can believe and here’s why.”

That’s a nice segue into my next question. In December of last year, Fifth Third made close to a $3 billion commitment over a three-year period to fight racism in lending, in community investment, and in other areas as well. What can you share with us about the progress that you’re making on that commitment as we close in on a one-year mark here? If you have them, maybe some examples of what’s been done in terms of putting that money to use.

Sure. From a lending perspective, we had about $2.2 billion and about $1.4, $1.1 billion would be in the small business space or in the commercial space, and another $900 million would be in mortgage. We are at 37 percent of that goal right now. And we have about $40 million that we committed to philanthropy. And so we’re really reaching that. And what I’ll have you know is that the $180 million was not in our original plan. So it’s not “Are you doing what you plan?” It’s “Are you doing what you should? Are you doing what you must?” Doing the right thing is easy. Doing what’s just is challenging. And so as we began to look at how historically financial institutions, Terry, have managed our way through a lot of our communities, it was based on low- to moderate-income census tracts. And as you know, African-Americans are about 12 percent to 13 percent of the population of the United States. And let’s say they are disproportionately represented in the low- to moderate-income area. If you call that 30 percent, you’re still not necessarily hitting the people that you say you want to hit with all of these dollars that are being invested to improve these marginalized communities. These nine neighborhoods are so critical because we’re calling it “high-minority track, low- to moderate-income.” Now you have a model whatever community you going to – if you’re going into a Latinx community, if you’re going into a low- to moderate-income Asian/Pan-Pacific Islander community, because we as people tend to group together in communities – now you have the model for how you can transform and change and know that the dollar that you’re saying you’re investing, as it was in 2020 into Black communities, now you know that you are achieving and accomplishing that outcome. That’s probably one of the most transformational things we’ve done as a financial institution.

In terms of the important and defining experiences that you’ve had, Stephanie, both in banking and in your life outside banking, what would you point to as maybe the biggest things that you’ve learned along the way that would be of value for your peers in the financial industry to know and to learn from?

Well, Terry, what I will tell you, being in banking for 24 years and mostly on the line of business side, there’s a critical distinction about bankers. When I was on the commercial bank, I was called a commercial relationship manager. When I was in business banking, I was called a business banking relationship manager. Because what we do here, by definition, is we work with people and we manage relationships. At the toughest times in history, financial institutions had to have challenging conversations with our customers. We had to do forbearance letters. We had to sometimes take over companies. There were challenging conversations about whether companies would last and come out of that difficult time. Fifth Third’s own stock fell to 89 cents. So what is it about relationship that matters? You only do business with people you know, like and trust. If our employees don’t know us, don’t like us, don’t trust us, we will not be a best place and a best employer. We will no longer get, receive those designations. We will no longer, from a talent perspective, be able to recruit top talent. If our customers don’t trust us, don’t believe us and we don’t have a relationship with them, then they will walk away from here because no one is staying for checking accounts. No one’s staying for savings accounts. They have those across the street. When we’re talking about our communities – if our communities don’t trust us, don’t want to do business with us, then our ability to be present and profitable in their neighborhood is going to dissipate. It’s going to go away. We’ve seen what happens to a lack of trust with some very big-name companies that are no longer present in this nation because of the lack of trust. Wall Street literally is a measure of confidence. And if you don’t have consumer confidence, you will not have consumer business. And so at the end of the day, the most important thing I’ve learned in this organization is that relationship matters. As a matter of fact, it’s the only thing that does.

Now that’s a strong and clear statement to help us wrap up our conversation. So Stephanie Smith, Chief Inclusion and Diversity Officer at Fifth Third Bank, it’s been a real pleasure speaking with you on the BAI Banking Strategy podcast.

Thank you, Terry.

Terry Badger is the managing editor at BAI.