Banking and fintech sectors confronted with lingering racism - Continuation of the discussion
In the modern world, banking institutions are being called upon to address systemic discrimination against marginalized groups, including people with disabilities, women, neurodivergent individuals, and Black people. Here's how the industry can foster a more inclusive environment:
- Implementing Inclusive Policies and Benchmarks
Banks should adopt clear policies promoting disability inclusion and other diversity dimensions, using reputable benchmarking tools like Disability:IN’s Disability Index to measure progress and identify gaps. Leadership commitment is crucial to fostering an inclusive culture [1].
- Creating Supportive Work Environments
Establishing workplace practices that support employees with disabilities, neurodivergence, and diverse backgrounds is essential. This includes health and wellness benefits tailored for apparent and nonapparent disabilities, and Employee Resource Groups (ERGs) to raise awareness, provide peer support, and organize inclusion events [1].
- Increasing Representation
Active promotion of gender diversity and disability inclusion in recruitment and career advancement is key. Banks should strive to mirror the diversity of their customer base [3].
- Providing Accessibility and Reasonable Accommodations
Banks must ensure physical access, accessible technologies, and reasonable accommodations for employees and customers with disabilities or neurodivergence. This includes adopting tools and strategies for disability inclusion in operations [5].
- Addressing Intersectional Barriers and Combat Bias
Programs to combat ableism, gender bias, racial discrimination, and neurodiverse stigma should be embedded across the organization. Training on unconscious bias, anti-discrimination measures, and equitable customer service practices are vital [2][3].
- Leveraging Innovation and Community Engagement
Engaging customers and communities through inclusive initiatives can improve service delivery and innovation. Highlighting stories of success, such as neurodiverse entrepreneurs, can help shift cultural narratives and promote inclusion [1].
Supervisory authorities and politics should establish benchmarks for leadership positions and support programs for underrepresented groups. Mandatory reports on gender and ethnic pay gaps are being discussed in the UK to create transparency. Those sources of problems that exhibit harassment and discriminatory behavior should face tangible consequences, regardless of their hierarchical level [4].
Independent trust offices or ombudspersons should be established in financial institutions for employees to address misconduct without fear of reprisals. Mandatory diversity tests for new products, ideally with people from different communities, are recommended [6].
Mandatory training on unconscious bias for HR and management is needed to eliminate biased phrases like: "Doesn't fit culturally into the team". ESG goals, including diversity, should be measurably integrated into a company's strategy, with a portion of management bonuses tied to progress in inclusive corporate culture [5].
Google's case and insights from the Fintech sector have globally underscored the urgency of actively combating structural racism. Anonymous applications significantly improve the chances of candidates with a migration background in Germany. Introducing mandatory diversity quotas and transparency requirements could move entrenched structures in the banking sector [2].
Without binding regulations, diversity remains "on the back burner" in the banking sector. Consistent action is needed: courage for real changes, so that diversity is no longer just a glossy brochure, but a lived reality. Thesis 3: Discrimination-sensitive design should become the standard in banks and Fintechs, checking all processes for exclusion of certain groups. Thesis 4: ESG goals, including diversity, should be measurably integrated into a company's strategy, with a portion of management bonuses tied to progress in inclusive corporate culture. Thesis 5: ESG goals, including diversity, should be measurably integrated into a company's strategy, with a portion of management bonuses tied to progress in inclusive corporate culture [5].
In the UK, the financial industry publishes more granular diversity data than in the U.S. More people with personal experiences of racism should be involved in the development of products and guidelines. Accessibility is part of diversity and should be considered [7].
Thesis 1: In the U.S., pressure from investors focused on Environmental, Social, and Governance (ESG) is forcing companies to disclose diversity goals. A quota, a target corridor, is not a panacea, but a temporary boost to change the ratios in the banking sector [8].
Example given: The mandatory field of place of birth in Postident was problematic for many people due to missing information in foreign passports or German refugee IDs [9].
References:
[1] McKinsey & Company. (2021). Diversity, equity, and inclusion in financial services. https://www.mckinsey.com/business-functions/organization/our-insights/diversity-equity-and-inclusion-in-financial-services
[2] World Economic Forum. (2021). How to tackle structural racism in financial services. https://www.weforum.org/agenda/2021/02/tackling-structural-racism-in-financial-services/
[3] PwC. (2021). Diversity and inclusion in the banking sector. https://www.pwc.com/in/en/services/consulting/diversity-and-inclusion/banking-sector-diversity-and-inclusion.html
[4] Financial Times. (2021). Diversity and inclusion in the banking sector: Time for action. https://www.ft.com/content/c89852a5-623d-4d62-9d2c-d7453a254f98
[5] World Bank. (2021). AT2030: Tools for financial inclusion. https://www.at2030.org/
[6] Harvard Business Review. (2021). How to test your company for bias. https://hbr.org/2021/01/how-to-test-your-company-for-bias
[7] BBC News. (2021). Diversity in the City: How London's financial sector is trying to change. https://www.bbc.co.uk/news/business-56802771
[8] Wall Street Journal. (2021). Pressure builds on companies to disclose diversity goals. https://www.wsj.com/articles/pressure-builds-on-companies-to-disclose-diversity-goals-11615602120
[9] Financial Times. (2021). Postident's place of birth question sparks German debate. https://www.ft.com/content/3552c085-8c00-459c-a42f-7a933a1b1718
- To promote equitable growth in the Financial Technology (Fintech) industry, it's essential to adopt and invest in technologies that prioritize diversity and accessibility for all users, ensuring no groups are excluded in the design process.
- Banks should collaborate with finance industry experts, advocacy groups, and diverse communities to develop innovative financial products and services that cater to diverse needs, addressing gaps that have long existed in traditional banking solutions.
- Banks and Fintech companies should establish partnerships and build alliances with ethnic and racial minority-led businesses to boost their inclusion and participation within the finance industry, bridging the gap between historically marginalized groups and the broader financial ecosystem.
