The banking industry has shown much progress with its DEI efforts, but there is more to do.
Published: October 24, 2022
This is the second annual wave of Arizent’s DEI research. The goal of this year’s research is to understand how diverse groups experience their workplaces and how different approaches to addressing diversity, equity and inclusion are impacting employees.
This research was conducted online during July 2022. The data in this white paper comes from 180 respondents in the banking industry, from different types and sizes of organizations.
"It is important that organizations focus on DEI by viewing it from all angles in order for the organization to remain competitive in the marketplace."
— Black Millennial female bank division/department head
During the past 20 years that American Banker has honored The Most Powerful Women in Banking™, we’ve witnessed positive changes in how the industry perceives and addresses diversity, equity and inclusion (DEI). We’re pleased to share information about these changes with highlights of the findings from a July 2022 survey by Arizent Research/American Banker—sponsored by S&P Global.
According to the survey, 61% of bank and credit union professionals say their organizations offer diversity training at all levels of the company (see Figure 1). Further, 42% say their organizations are taking on initiatives to improve the diversity of senior-level employees and the board of directors. In addition, the majority (80%) of employees are actively engaged with their organizations’ DEI initiatives.
80% of employees are actively engaged with their organizations’ DEI initiatives.
Overall, employees give banking organizations reasonably high marks for creating healthy, supportive work places. For instance, most respondents (84%) agree or strongly agree that their teammates value their ideas and 81% say their manager sees and values them. Three-quarters (73%) say their manager demonstrates empathy to them.
While the survey results show largely positive trends, the question remains: Are we doing enough to make our workplaces healthy for all employees, particularly when it comes to supporting women? What actions do we need to take as an industry to ensure that our organizations not only reflect our communities, but that those women who desire to become leaders in banking have the opportunity to do so?
The results of the survey, designed to understand how different approaches to DEI are impacting employees, provide insights into these questions. They also highlight two areas that can effectively move the needle to support and empower our next generation of women leaders: Employee Resource Groups (ERGs) and a continued focus on creating diverse leadership teams.
More than three-quarters of employees (76%) say that their bank is very inclusive or inclusive for women—the highest inclusion rate of any group. To put that percentage in context, only 45% of respondents think that their bank is very inclusive or inclusive for physically disabled employees and only 60% say it’s inclusive for LGBTQ+.
As an Asian Gen Z male respondent who works in the field notes, “I have worked at multiple jobs before where my team was either 100% white male or almost 100% white male. I’ve been in situations where people automatically assume that a black woman in our office is a secretary, even if she isn’t. The heightened focus on DEI is helping to change perceptions and is having a visible effect on the recruiting of new employees.”
While the bulk of survey respondents (73%) think organizations make better decisions when there is employee diversity, men and women do perceive DEI differently (see Figure 2). When asked how important it is that banks evaluate or address a lack of DEI, women were more likely to say it is important (84% versus 65% of men). And while 92% of men say their company is inclusive to women, only 78% of women agree.
Another interesting trend is that employees give higher marks to their own organization, versus other organizations in their industry. The survey uncovered a strong bias toward banking employees thinking their company is a better place to work, with only 55% saying that banking as an industry is very inclusive or inclusive to women (versus 76% at the company level).
To support DEI goals and create supportive work environments, banking institutions are increasingly creating ERGs: groups of employees who share commonalities such as race, gender, sexual orientation, disabilities or other similarities. Among survey respondents, almost half (46%) say their organization has created ERGs. Participating in an ERG can help employees gain skills and knowledge, network and give back through corporate responsibility projects or volunteer activities.
The data shows that ERGs are having a positive impact at those banks with an ERG program: 84% of survey respondents say that some change has happened as a result of their ERGs. The benefits reported at these organizations include increased feelings of inclusion among group members (69%), cultural changes to the organization overall (63%) and changes in hiring practices to ensure a greater degree of diversity (47%) (see Figure 3).
92% of men say their company is inclusive to women; 78% of women agree.
A white Gen X female at a regional bank who heads the resource group for women’s empowerment and education shares, “DEI has been a focus and is quite strong within my organization and I am glad that it is finally getting the attention that it deserves.”
Of those employees at banks with ERGs, 80% say their organization is tracking metrics around ERGs and 71% say that the goals of the groups are fully defined.
One persistent question related to the return on investment of DEI efforts is if diversity of leadership results in a more inclusive, welcoming and healthy work environment. Intuitively the answer is “yes,” and the survey results confirm the connection. To better understand how healthy or unhealthy a workplace environment is, Arizent used a Workplace Toxicity metric to quantify how often employees experience issues around safety, job security, ability to concentrate and work-related stress.
When applying the Workplace Toxicity metric to the banking respondents, we see that overall most employees (8 in 10) work in a healthy or borderline healthy workplace. While this is a useful general metric, what is more telling is the data on the role that diversity in leadership plays related to this statistic. Employees who work at banks where leadership is more diverse are significantly more likely to have healthier workplace experiences overall. For example, when there are 2 to 3 demographics represented in leadership, 73% of employees can be described as working in a healthy/borderline healthy workplace. However, where there are 4 to 5 demographics represented in leadership, that number rises to 88%.
There are several tangible connections between diverse leadership and a lower workplace toxicity score. Notably, those employees who work at financial institutions with more diversity in leadership feel valued and that they belong (76% versus 65%) and that their input is important (82% versus 65%). Those that feel that their bank has a genuine commitment to inclusion are also much more likely to say that their organization is very healthy (55% versus 33%) regarding DEI.
In terms of how respondents feel about the actions their organization is taking to promote diverse leadership, the results differs by gender. While 48% of men say that their organization is providing career and leadership development mentorships and programs targeted toward employees from under-represented groups, only 28% of women agree.
To ensure that every employee gets the support they need, S&P Global’s people-first career coaching model provides coaches to employees at every level. Employees can meet with a professional coach to explore career progression, skills development, and receive help applying for internal—and even external—positions.
“The ultimate aspiration is not only to increase the number of women in leadership roles but to integrate DEI into every facet of your organization,” says Annette O’Hanlon, Chief Corporate Responsibility & Diversity Officer, S&P Global. “We want everyone to feel a sense of belonging that empowers them to accomplish their career goals.”
At S&P Global, 40% of employees belong to at least one of the company’s nine People Resource Groups (PRGs) that support the acquisition, engagement and development of diverse talent. S&P Global’s Women’s Initiative for Networking and Success (WINS) PRG has more than 25 global chapters.
S&P Global’s People Resource Groups:
Adelante — Honoring Hispanic and Latine Communities
APEX — Asian Professionals for Excellence
BOLD — Black Organization for Leadership & Development
Empower — Advancing Multicultural Diversity
ParentsNet — Advocating for Working Parents and Caregivers
Reach — Championing People with Disabilities
Pride — Celebrating LGBTQ+ Communities
VALOR — Veterans and Allies Leading for Organizational Results
WINS — Women’s Initiative for Networking and Success
“At S&P Global, we believe that leadership diversity helps foster innovation and creativity and makes our company, our people, and our communities stronger. We must continue to actively support, develop, and enable the next generation of leaders.”
— Annette O’Hanlon, Chief Corporate Responsibility & Diversity Officer, S&P Global, DEI Research Sponsor
3 steps to take today
There are a number of steps financial institutions and broader organizations can do to support and develop women in the workplace. To strengthen your DEI position, consider the following suggestions from S&P Global to support and develop the next generation of powerful women in banking.
1. Engaging potential leaders.
Identify high-performing women and emerging female leaders who have the capacity to lead and help them develop the skills and confidence to do so.
2. Promoting ERGs.
Women-led ERGs give future leaders an opportunity to connect and network with female senior leaders and mentors.
3. Highlighting female leaders.
Help women in leadership positions become more visible to junior-level employees.
Arizent delivers actionable insights through full-service research solutions that tap into its first-party data, industry SMEs and highly engaged communities across banking, payments, mortgage, insurance, municipal finance, accounting, HR/employee benefits and wealth management. Arizent has leading brands in financial services, including American Banker, The Bond Buyer, Financial Planning and National Mortgage News, and in professional services, such as Accounting Today, Employee Benefits News and Digital Insurance.
For more information, please visit www.arizent.com
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For more information, visit www.spglobal.com/DEI
