A mature adult African American female bank worker with a Hispanic mid-adult female soldier at a desk
Challenges remain: women and people of colour and other under-represented groups struggle to secure executive roles © SDI Productions/Getty Images

Naomi Mercer is senior vice-president of diversity, equity and inclusion for the American Bankers Association

Banks face increasing pressure to act on diversity, equity and inclusion — both for their own workforces and for the communities they serve. As the largest banking trade association in the US, the American Bankers Association (ABA) is focused on helping lenders of all sizes enhance and expand their diversity, equity and inclusion (DEI) programmes. Not only is it the right thing to do, it’s good for business.

Banks know our industry must continue to adapt because of wider demographic changes and because diverse and inclusive teams are more innovative and agile. They are more likely to remain with an organisation and produce better business outcomes. Banks also understand there is a need to commit to DEI at all levels. Organisations 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 programmes for employees from under-represented groups, and providing resources for inclusive leadership practices.

Naomi Mercer

ABA works with its members across the $23tn US banking industry to develop and implement tailored training programmes that help bankers learn to mitigate their biases, provide unbiased customer service and leverage the benefits of diverse teams.

We also learn from bankers leading DEI efforts at their own institutions. An advisory group comprising bankers from across the US helps shape our policies and advocacy efforts, to showcase the industry’s dynamic career opportunities and commitment to achieving equitable banking.

In addition, ABA works with other industry groups to facilitate partnerships between mainstream lenders and minority depository institutions to help expand their impact. Minority depository institutions — which are directly or primarily owned by individuals from racially under-represented backgrounds — are an important source of capital for small businesses and under-represented communities across the US. They are key to boosting economic opportunities for many Americans.

Through collaboration, the industry can expand access to banking. In 2019, ABA worked with 21 core providers — those companies responsible for the technology platforms that support the banks’ daily operations — to bolster its Bank On movement. Spearheaded by the non-profit Cities for Financial Empowerment Fund, Bank On aims to improve the financial stability of the 5.9mn American households that are unbanked — a situation suffered disproportionately by black, Hispanic or indigenous families.

Today, Bank On-certified low and no-fee accounts are offered at 52 per cent of branches across the US, while institutions with Bank On-certified accounts represent 62 per cent of the domestic deposit market — a significant increase. The unbanked rate has shrunk from 5.4 per cent in 2019 to 4.5 per cent in 2022 — the lowest level since the government started tracking the data in 2009.

Yet there remains more to do to improve DEI in banking. The data shows that it is still a challenge for women, people of colour, and individuals from other under-represented groups to secure executive roles. Banks need to 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 marketplace.

Banks of all sizes, geographies, and cultures are making progress creating a more equitable, inclusive, and diverse financial industry. To be successful and achieve the necessary transformations, DEI initiatives must be tailored to existing workforces and a bank’s intended future culture. This is no easy task.

It is imperative for banks to make DEI a priority at all levels of their organisation, within their workforce, among their customers and in their communities.

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