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“At base, financial literacy is inextricably connected to control over one’s future.” —Ann Cotton, entrepreneur and philanthropist
Knowledge of and access to financial institutions is key to an individual’s autonomy and ability to make good choices for their future. But, there innumerable barriers out there in the world that may prevent various groups of people from fully participating in the financial sector, from a lack of formal education to generational poverty. How, then, can we be financially inclusive? How can we take steps to remove economic barriers, from local to global levels? Though these questions are perhaps impossible to answer in one fell swoop, in this blog I will offer initial guidance on how financial institutions can best embrace diversity, promote equity, and above all, foster inclusion in their everyday practices. Let’s jump right in!
1. Dialogue and Awareness
It almost goes without saying that open dialogue and awareness are crucial elements when it comes to successful DEI implementation, but how do these elements specifically intertwine within the financial industry? I recommend looking toward the Credit Union National Association (CUNA)! From hosting panels on the future of DEI for cross-institution discussion to “hold[ing] regular heritage, cultural, and identity-based events” within their association for their employees to participate in, CUNA’s active efforts to arrange opportunities for open dialogue on a large scale ensures there’s no mistaking the intentionality of their commitment to DEI. On a more individual level, CUNA further ensures conversations surrounding DEI are accessible to all, from Employee Resource Groups (ERGs) for a straightforward focus on business to DEI-centric book clubs for a creative focus on increasing cultural humility and knowledge diversity. I mean, doesn’t that sound ideal? Immersing oneself in DEI through positive dialogue surrounding diverse characters and stories?
At the end of the day, efforts like these and so many more are fundamental to enhancing collaboration across one’s financial institution, and perhaps most importantly, to ensuring people feel heard and respected!
2. Inclusive Lending
When contemplating ways to more thoroughly incorporate DEI across financial landscapes, perhaps the most obvious and yet simultaneously most overlooked strategy is that of inclusive lending. After all, creating an environment that is diverse, equitable, and inclusive extends beyond our employees—it must also encompass the communities we serve! Inclusive lending is one of the most effective ways to accomplish this goal. Allow me to offer a sample scenario:
Yumi, a young Japanese woman, first came to the United States for college in library sciences, and she loved her experience in San Jose so much that she decided to live here full-time. She has a green card and wants to start her own bookstore, but she doesn’t yet have a social security number—how will she be able to get a valid loan?
Well, Yumi isn’t the only person in the United States who lacks an SSN, a reality that means it is incredibly difficult for many people to obtain essential financial resources and to start establishing their credit. In response, many credit unions and community banks have been leveraging the use of the Individual Taxpayer Identification Number (ITIN) and alternative forms of identification to provide crucial financial services to these populations! ITIN and other methods of affordable lending are thus an excellent means of making financial freedom more accessible and affordable to all individuals. How about I take us beyond hypotheticals and into some specific examples? Reading Cooperative Bank, based in Massachusetts, “is actively reaching out to bilingual customers by adding branch staff and marketing signage in Spanish,” similarly making their online and ATM options Spanish-language accessible, too. MUFG Union Bank, now part of Bancorp, has developed “a $5 million loan and accelerator program for minority-owned small businesses” and additionally offers “‘a business diversity loan to SMBs with the intent to provide more resources and tools on all the loan products available to potential homebuyers.’” From steps as simple as linguistic accessibility to as grand as diversity loans for small- and medium-sized businesses, embracing inclusive lending is a surefire way to incorporate DEI in any financial institution.
3. Financial Inclusion Initiatives
In a logical follow-up to inclusive lending, let’s dip our toes into financial inclusion, a practice best understood as “efforts to make financial products and services accessible and affordable to all individuals and businesses, regardless of their personal net worth or company size.” On a practical level, financial inclusion thus means taking steps to remove barriers that prevent various groups of people from fully participating in the financial sector, such as investing in financial literacy programs—from local programs within one’s community to larger programs focused on impoverished areas around the globe (e.g. those supported by the World Bank)—or “focusing on gender-specific financial inclusion initiatives” to help address the disparity that “women are 31% more likely than men to have an inactive bank account.”
That makes sense, you may be thinking, but what specific strategies can my financial organization implement to help increase financial inclusion?
A great question! Allow me to offer a few suggestions:
Provide alternative methods of credit scoring, i.e. those that consider non-traditional data sources, in order to more comprehensively extend credit access to individuals with limited formal credit history. For example, including elements such as rental history and/or utility bill payments in credit assessment can help ensure a broader access to credit and other financial services!
Develop and implement strong consumer protection frameworks that prioritize fair treatment, transparent pricing, and ethical conduct by one’s financial institution.
Lastly, offer “No-Frills” accounts and low-cost transaction accounts to enable financial inclusion at a community level.
Pretty straightforward, right? Onward we go!
4. Digital Accessibility
Although I already touched upon the idea of accessibility with the example of Reading Cooperative Bank’s Spanish-language focus, “digital accessibility” is a concept that more specifically refers to making sure people with disabilities have equal and equitable access to online services, information, opportunities and so forth. After all, if financial institutions aren’t making efforts to include people with disabilities, then how inclusive can those efforts truly be?
Because “disability” is itself a deliberately encompassing term, “digital accessibility” covers a similar broad expanse. Consider the following starter ideas below:
For written content on one’s website, ensure screen reader compatibility and offer audio versions.
For video content on one’s website, provide captions and/or a transcript, and again ensure screen reader compatibility.
Avoid flashing images/videos that might trigger epileptic seizures.
Ensure there is high contrast between the text and background colors in online written content and use easy-to-read fonts (such as dyslexic-friendly typefaces!).
Ensure the location of one’s institution is wheelchair-accessible and otherwise ADA compliant for people with physical disabilities.
Have sign language interpreters available for deaf/HOH clients.
Again, these options are mere starting points—the opportunities to embrace digital accessibility in financial institutions are as diverse and varied as people with disabilities themselves!
5. Supplier Diversity
Last but certainly not least, we must always keep in mind that the implementation of DEI initiatives should not only be internal but also external—in other words, embracing DEI should benefit one’s community as a whole! What better initiative to foreground than that of supplier diversity?
Supplier diversity is a business strategy that encourages the use of diverse suppliers, from women-owned companies to those owned by veterans. In the finance industry, supplier diversity is increasingly recognized as a technique that successfully promotes financial inclusion, enhances innovation and competitiveness, reflects customer diversity (and economically empowers diverse groups), and ultimately builds more united communities—a situation beneficial for everyone involved. The National Credit Union Administration (NCUA), for example, champions supplier diversity, emphasizing the multitude of ways in which credit unions and other financial institutions can benefit by intentionally including a diverse supplier pool when procuring goods and services—it’s good business for credit unions to engage in supplier diversity!
Fundamentally, the primary goal of a supplier diversity program is to ensure that diverse suppliers a) are included and b) provided numerous opportunities (and proper support) to compete for procurement needs. Regardless of the size of one’s organization, any and all financial institutions are capable of establishing a supplier diversity program! Smaller organizations, for example, may focus on intentionally seeking out contract quotes and proposals from diverse suppliers during the procurement process. Larger organizations, in contrast, may take the extra step of compiling a database of diverse suppliers in their communities to regularly have available, or they may create a position dedicated to arranging contracts with diverse suppliers (or both!). No matter what, a step toward employing diverse suppliers is also a step toward embracing DEI, and for that, I can’t recommend this strategy to financial institutions enough!
And there we have it: five key areas in which financial institutions can embrace and implement many facets of DEI, from disability inclusion to inclusive lending practices. What are we waiting for? The intersection of finance and DEI awaits us!
Dima Ghawi is the founder of a global talent development company with a primary mission for advancing individuals in leadership. Through keynote speeches, training programs and executive coaching, Dima has empowered thousands of professionals across the globe to expand their leadership potential. In addition, she provides guidance to business executives to develop diversity, equity, and inclusion strategies and to implement a multi-year plan for advancing quality leaders from within the organization.
Reach her at DimaGhawi.com and BreakingVases.com.
