By Marilyn Kennedy Melia
That old adage had it wrong: Great minds really don’t think alike.
Research published by McKinsey shows that companies with higher degrees of ethnic, racial, and gender diversity in their workforce are more likely to have above-average financial returns.
“Adequate representation from many walks of life increases diversity of thought, which, in turn, increases creativity and productivity,” says Dennis Kennedy, founder and chairman of the National Diversity Council.
Perhaps most importantly, diversity-minded financial institutions stand a better chance of serving customers well if there are voices within the bank who can relate to the needs of different customer segments.
Laws banning discrimination in hiring and other areas have made one step towards allowing fair access to all individuals. But deliberate diversity efforts go further than that, touching at the heart of a bank’s reputation and services.
And marketing plays a crucial role in maximizing the potential of any diversity effort, by communicating a commitment to all segments of a community, and connecting to their banking needs.
Diversity looks like this.
Every one of the 7,000-plus employees of Comerica has the power to define how the bank looks at diversity.
“Anyone can start an Employee Resource Network Group (ERNG)” explained Nathaniel Bennett, SVP and chief diversity officer for the Dallas-based Comerica. “All they do is just sit down with a diversity manager and make their case,”
Comerica will allow an ERNG to form if there are valid reasons for a group of employees to share advice and explore their role within the bank, said Bennett.
In addition to racially or ethnically oriented groups, other ERNGs include ones for veterans, LGBT workers, young professionals, and women, among others.
About 40% of employees participate in an ENRG—or join volunteer efforts that the groups organize, Bennett said.
Similarly, KeyBank has Key Business Impact and Networking Groups, nicknamed “kabings,” according to Poppie Parish, chief diversity and inclusion officer of the Cleveland-based institution.
U.S. Bank has Business Resource Groups (BRGs) with some 13,000 employees participating in one of the 100 BRG chapters around the country, said Greg Cunningham, vice president of global inclusion and diversity.
By segmenting into groups with a common identity, workers are better able to provide mentoring to each other, as well as telegraph ideas to management.
Only if senior management maintains diversity as a priority can these efforts can have a significant impact.
“Our CEO has committed herself to diversity,” said Parish. “It’s a personal issue for her.”
At Comerica, “Every business unit head, including marketing, CIO, and human resources, embed diversity in their goals,” Bennett explained. And they are held accountable through an annual diversity scorecard. Also, market segmentation teams look to develop business with specific customer groups.
At U.S. Bank, “Every BRG is sponsored by one of our managing committee members—our most senior leaders—who provides executive-level guidance,” said Cunningham. These senior leaders also have quarterly reviews to track diversity-related goals, like whether they are increasing marketing towards various customer segments.
This model, in which:
- Employees can establish and join a networking group
- Senior management listens to their concerns and uses them to inform bank-wide goals
—is workable for any bank, even relatively small ones, Bennet maintains. “You can downsize this model,” he said. “And you don’t need a large budget—our employees volunteer to chair the ERNG. It’s all on their own time.”
It’s better to show than to tell.
Conveying KeyBank’s diversity commitment to the public is “the easiest job I have,” said Tom Wennerberg, director of marketing.
“It’s not necessary to say, ‘We stand for diversity,’” in any advertisements, Parish added. She said that “diversity is organic here,” reflecting out like an image from a mirror.
Additional opportunities for conveying the message of diversity come from employee volunteerism in underserved communities—and bank initiatives for increasing ties with various customer segments.
For example, 200 KeyBank employees from both the Asian and African-American networking groups recently distributed school supplies to needy kids. Those types of activities, Wennerberg noted, are often an opportunity for a post on the bank’s Facebook page or Twitter feed.
At Comerica, diversity officers frequently partner marketing staffers, according to Bennett.
Recently, for instance, Comerica sponsored a series of symposiums in California, Texas, and Michigan on women business owners—a collaborative effort with marketing. The women’s ERNGs recommended the speakers, while the marketing department took care of logistics and publicity.
Kennedy of the National Diversity Council recommends that one place where banks should be deliberate about conveying a diversity message is on the career page of their website and in job postings. “Create an image of the organization that makes potential employees feel welcome before they have even submitted their application,” he said.
Diversity efforts that lead to stand-out bank programs.
The Community Reinvestment Act (CRA) requires financial institutions to provide loan and banking products to low and moderate income communities.
“There’s some cross-over between diversity and CRA,” Bennett said. He points to a recent multi-million dollar investment that Comerica made to help homebuyers in lower income areas of Detroit, and that local ERNGs will be active in volunteering and promoting the effort.
New York’s Carver Federal Savings Bank was founded to “serve the needs of African-Americans at a time when they and some other minority groups did not have access to mainstream financial services,” according to president and CEO Michael Pugh. He said they’ve had great success with their “Carver Community Cash” (CCC) product, and that other banks should consider a similar offering.
“It is well-documented that minority communities have a high percentage of unbanked and underbanked consumers,” said Pugh. “The CCC allows consumers who don’t have a bank account to cash checks, pay bills, send or receive Western Union money transfers, and purchase discounted money orders and prepaid VIS debit cards—all at a reasonable cost, below the check cashing industry.”
Since the CCC was introduced several years ago “more than 7,000 underbanked New Yorkers have converted to traditional deposit accounts with Carver,” Pugh added.
Inventive media and public relations strategies can be combined with a product geared to a customer segment.
Case in point: U.S. Bank launched a new Pride U.S. Bank Visa Debit Card earlier this year, following a contest to design the card. “Our customers helped us choose the final design” from among some 400 entrants, Cunningham noted. “We leveraged a marketing and public relations campaign to garner awareness of the card, and the results have been fantastic,” he said. The new card is also supported by an online site for LGBT customers.
Marilyn Kennedy Melia is a banking and personal finance writer based in Chicago. Email: email@example.com.