Creating a Diverse and Inclusive Workplace
Introduction
In today’s increasingly diverse world, creating a workplace that embraces diversity and promotes equality is more important than ever. Companies across various industries are recognizing the benefits of having diverse teams and are making efforts to foster inclusion at all levels. One such industry leading the way is the banking sector, where institutions like the American Bankers Association (ABA) are striving to improve diversity, equity, and inclusion (DEI) programs.
Benefits of Diversity and Inclusion
Embracing diversity and fostering inclusion in the workplace provides numerous benefits for both the organization and its employees:
- Increased innovation and agility: Diverse teams bring different perspectives and experiences, leading to more innovative ideas and faster problem-solving.
- Higher employee retention: When employees feel welcomed, respected, and valued, they are more likely to stay with the organization and contribute to its success.
- Enhanced business results: Research has shown that companies with diverse leadership teams and inclusive cultures tend to outperform their peers financially.
With these advantages in mind, banks are actively implementing initiatives to promote diversity and address unconscious biases within their workforce.
Initiatives within the Banking Industry
Banks, including members of the ABA, are taking concrete steps to promote diversity, equity, and inclusion:
- Unconscious bias training: Banks are conducting training programs to educate their employees about unconscious biases and how to mitigate them in their work.
- Sponsorship programs: Many banks have launched sponsorship programs to support employees from underrepresented groups and provide them with opportunities for growth and advancement.
- Inclusive leadership practices: Resources and training are being provided to develop inclusive leadership skills, enabling managers to create a welcoming and respectful environment for everyone.
These initiatives, among others, aim to create a culture where diversity is celebrated and all employees have equal opportunities to thrive.
Collaboration and Partnerships
The ABA, together with other industry groups, is working towards fostering collaboration and partnerships to amplify the impact of diversity and inclusion efforts:
- Minority depository institutions (MDIs): MDIs, which are owned primarily by individuals from racially underrepresented backgrounds, play a crucial role in providing capital to small businesses and underrepresented communities. The ABA is facilitating partnerships between traditional lenders and MDIs to expand their reach and boost economic opportunities for many Americans.
- Bank On movement: ABA has collaborated with major vendors and the nonprofit Cities for Financial Empowerment Fund to strengthen the Bank On movement. This initiative aims to improve the financial stability of unbanked households, particularly those from Black, Hispanic, or Indigenous communities.
Through these collaborative efforts, the banking industry is driving positive change and working towards a more inclusive financial landscape.
Challenges and the Road Ahead
While progress has been made in promoting diversity, equity, and inclusion in banking, challenges still exist:
- Underrepresentation in executive positions: Data shows that women, people of color, and other underrepresented groups still face challenges when it comes to landing executive positions within banks. Addressing this disparity is crucial for creating a more equitable industry.
- Reflecting diverse communities: Banks need to do a better job of mirroring the diversity of the communities they serve. By having a workforce that reflects the demographics of their customer base, banks can better understand and cater to their customers’ needs and preferences.
- Customized DEI initiatives: To be successful in their diversity and inclusion efforts, banks must ensure that their initiatives align with the organization’s existing workforce and intended culture. A one-size-fits-all approach may not be as effective as tailored strategies.
Despite these challenges, the banking industry is working tirelessly to embed diversity, equity, and inclusion as core values to drive positive change.
Additional Insights
Expanding on the topic of diversity and inclusion in the workplace, it’s important to highlight a few key insights and practical examples that can provide a deeper understanding:
- Creating a culture of inclusion: Simply hiring a diverse workforce is not enough; organizations need to foster an inclusive culture where employees feel valued and empowered to bring their whole selves to work. This involves ensuring everyone has a seat at the table, offering opportunities for growth and development, and promoting open dialogue about diversity-related issues.
- Measuring the impact of DEI initiatives: To gauge the effectiveness of diversity and inclusion efforts, banks should establish key performance indicators (KPIs) and regularly track progress. Examples of measurable outcomes include increased representation of underrepresented groups at various levels of the organization, improved employee satisfaction and engagement, and positive customer feedback.
- Diverse recruitment and hiring practices: To attract a diverse pool of candidates, banks should actively seek out partnerships with organizations that specialize in diversity recruitment. Additionally, reviewing and revising job descriptions to eliminate bias, implementing blind resume screening processes, and incorporating diverse interview panels can help eliminate unconscious biases during the hiring process.
- Diversity resource groups: Establishing employee resource groups (ERGs) can be an effective way to create a sense of community and support for employees from underrepresented backgrounds. ERGs provide a platform for networking, mentorship, and advocacy within the organization.
- Supplier diversity programs: Banks can further promote diversity by implementing supplier diversity programs. These programs ensure that a diverse range of suppliers, including minority-owned businesses, are given opportunities to compete for contracts and contribute to the bank’s supply chain.
By adopting these insights and practices, banks can continue to evolve and strengthen their commitment to diversity, equity, and inclusion.
Summary
In conclusion, creating a diverse and inclusive workplace is not only the right thing to do but also beneficial for business. Banks are leading the way in promoting diversity, equity, and inclusion, recognizing the advantages that diverse teams bring. Initiatives such as unconscious bias training, sponsorship programs, and inclusive leadership practices are being implemented to foster an inclusive culture.
Collaboration and partnerships with minority depository institutions and initiatives like the Bank On movement are further expanding access to banking services and promoting economic opportunities for underrepresented communities. However, challenges remain, including underrepresentation in executive positions and the need for tailored DEI initiatives.
By incorporating additional insights such as creating a culture of inclusion, measuring the impact of DEI initiatives, adopting diverse recruitment practices, establishing resource groups, and implementing supplier diversity programs, banks can embrace diversity and create workplaces that truly value and celebrate every individual.
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Naomi Mercer is senior vice president of diversity, equity and inclusion at the American Bankers Association.
Banks face increasing pressure to perform on diversity, equity and inclusion, both for their own workforce and the communities they serve. As the largest banking trade association in the U.S., the American Bankers Association (ABA) is focused on helping lenders of all sizes improve and expand their diversity, equity and inclusion (DEI) programs. Not only is it the right thing to do, it’s also good for business.
Banks know that our industry must continue to adapt due to broader demographic changes and because diverse and inclusive teams are more innovative and agile. They are more likely to stay with an organization and produce better business results. Banks also understand that it is necessary to commit to DEI at all levels. Organizations thrive in a culture where everyone feels welcome and respected, regardless of their background.
Among other initiatives, banks are conducting unconscious bias training for staff, launching sponsorship programs for employees from underrepresented groups, and providing resources for inclusive leadership practices.
ABA works with its members across the $23 trillion U.S. banking industry to develop and implement customized training programs that help bankers learn to mitigate biases, provide unbiased customer service, and leverage the benefits of diverse teams.
We also learn from bankers who are leading DEI efforts at their own institutions. An advisory group comprised of bankers from across the United States helps shape our policies and advocacy efforts, to showcase the industry’s dynamic career opportunities and its commitment to equitable banking.
Additionally, ABA works with other industry groups to facilitate partnerships between traditional lenders and minority depository institutions to help expand their impact. Minority depository institutions, which are owned directly or primarily by people from racially underrepresented backgrounds, are an important source of capital for small businesses and underrepresented communities throughout the United States. They are key to boosting economic opportunity for many Americans.
Through collaboration, the industry can expand access to banking. In 2019, ABA worked with 21 major vendors (those companies responsible for the technology platforms that support banks’ daily operations) to strengthen its Bank On movement. Spearheaded by the nonprofit Cities for Financial Empowerment Fund, Bank On aims to improve the financial stability of the 5.9 million American households that are unbanked, a situation disproportionately suffered by Black, Hispanic or Indigenous families.
Today, Bank On certified accounts with low fees and no fees are offered in 52 percent of U.S. branches, while institutions with Bank On certified accounts represent 62 percent of the national deposit market : a significant increase. The unbanked rate has dropped from 5.4 percent in 2019 to 4.5 percent in 2022, the lowest level since the government began tracking the data in 2009.
However, there is still much to be done to improve DEI in banking. Data shows that it is still challenging for women, people of color, and people from other underrepresented groups to land executive positions. Banks must do a better job of reflecting the increasingly diverse communities they serve. This is essential for any bank that wants to succeed in today’s highly competitive financial services market.
Banks of all sizes, geographies and cultures are making progress in creating a more equitable, inclusive and diverse financial industry. To be successful and achieve the necessary transformations, DEI initiatives must fit the bank’s existing workforces and intended future culture. This is not an easy task.
It is imperative that banks make DEI a priority at all levels of their organization, within their workforce, among their customers, and in their communities.
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