Improving diversity, equity and inclusion: 6 opportunities for banks
At a time when a global pandemic is intersecting with a social justice movement, diversity, equity and inclusion (DEI) have perhaps never been more top-of-mind for corporations, including financial institutions.
Here are six opportunities for banks aiming to do a better job when it comes to DEI in 2021 and beyond.
Diversify your recruiting
Diversity can mean not just who you hire, but also where you find them, says Ricky Otey, executive vice president and chief operating officer of Sharonview Federal Credit Union, based outside Charlotte, North Carolina. Since the COVID-19 pandemic began, Sharonview has hired employees displaced from hospitality and other industries.
“We were able to look for and find talented individuals who hadn’t thought of making the shift to financial services,” he says.
Detroit-based Ally Financial partners with Campus Pride to recruit LGBTQ+ talent for its summer internship, early talent and direct hire programs, as well as with high school and university programs that support and promote diverse talent. For example, at Wayne State University in Detroit, Ally sponsors the first-generation college student mentoring program.
Of course, rethinking recruiting is easier for entry-level positions. When it comes to higher-level roles, it will no doubt take more work. It might mean reaching out to women’s networking groups or African American chambers of commerce.
Know your people
Otey, the COO of Sharonview, encourages leaders and managers to get to know their employees so well that they’re able to know what they need to do great work and get ahead. It could be extra training or a flexible work arrangement, which can be key to retaining diverse workers.
“We just finished putting all of our leadership through special training on coaching, development and better listening skills,” Otey says. “It’s important to focus on the total employee and what it takes for that employee to be successful – and then I can figure out how I can best deliver on that for the employee.”
Quantify your goals
Truist, the Charlotte-based bank formed by the merger of BB&T and SunTrust, has a dedicated DEI office focused on recruiting, retaining and promoting diverse talent. The firm also has numbers it’s aiming for.
“We are especially focused on advancing women and increasing racially and ethnically diverse talent in leadership roles,” says Kimberly Moore-Wright, Truist’s chief human resources officer. “Our target is to increase ethnic diversity of senior leadership from 11.9 percent to 15 percent in three years and promote pay equity by conducting regular external, independent and expert equity reviews.”
“The talk around race and inclusion and equity has never been greater,” says Bhushan Sethi, joint global leader, people and organization at PwC in New York. “This is all incredibly well-intended, but progress is going to be difficult. There are some small steps you can make.”
And one of those small—but crucial—steps, he says, is transparency. There’s transparency when it comes to gender pay, Sethi notes, and also transparency in hiring. Sethi pointed to a Bloomberg report on corporate racial data. While the vast majority of S&P 100 companies issued a statement on racial justice, a far smaller percentage were willing to publish a full copy of their federal equal employment opportunity report.
“We still have work to do on the transparency piece,” Sethi says.
Use analytics to improve
Analytics can be a catalyst for achieving lofty DEI goals, says Charyn Faenza, principal industry consultant at SAS. Companies can use artificial intelligence to look internally for subtle patterns that uncover hidden biases in hiring, promotion or compensation. Likewise, companies can look for patterns of hidden bias externally – for example, in how they make lending decisions or conduct sales prospecting.
“There are great benefits to employing analytics. However, it is important to note that poorly trained AI algorithms can have the opposite effect of amplifying prejudice,” Faenza says. “There’s a big difference between black-box and white-box AI. Governance and model management are also essential considerations.”
Diversify inward and outward
One of the most natural ways to cultivate diversity is to focus on customers or on those you want to become customers, says PwC’s Sethi. He believes the banks that will emerge as DEI leaders will do so because of the culture they create inside and outside their branches.
“What I am optimistic about are the banks that are taking a customer lens to this,” he says. “The best way to impact diversity is to provide economic opportunity by providing lending to diverse businesses, by taking customers from diverse communities.”
There is reason to be encouraged and much work to be done. “I am encouraged by the fact that the business community, including banks, is talking about systemic racism,” says Sethi. “I am encouraged by the dialogue and conversations and the fact that a number of our clients are saying, ‘We need help.’”
Amy George is a BAI contributing writer based in Charlotte, North Carolina.
Get more insights on how to improve DEI in the BAI Executive Report “Building a more diverse, equitable and inclusive workforce”