The banking industry has a race crisis, according to a new report, and the disparities inside the country’s largest financial institutions are being highlighted.
According to the report, which was conducted by the Committee for Better Banks and obtained by CNN Company, people of color have a far lower chance of being promoted to the highest levels of management or senior and executive leadership at some of the nation’s most influential consumer banks than their White counterparts.
“Racial bias runs deep,” the report concluded.
That is valid for a large portion of corporate America. The tech industry has been chastised for its recruiting practices in particular. However, according to Nick Weiner, lead author of the CBB report, the lack of minority representation in financial services has some of the most far-reaching implications.
According to the report, the financial services sector offers “key infrastructure for the national economy,” assisting individuals and companies in processing transactions, raising capital for new projects, and facilitating services such as insurance and employee benefit plans.
“Banks are so essential to everyone being able to function in society and in our economy,” Weiner told CNN. “There’s an important high bar that banks need to meet for diversity and inclusion.”
According to the study, some of the financial institutions that strongly denounced racism in the wake of the police killing of George Floyd last year have a history of holding African American, Latino, and Asian bank tellers and call center workers in low and entry-level positions, limiting their opportunities to advance in their careers.
CBB is a coalition of bank workers, customer advocacy groups, and trade unions. Last summer, the group’s researchers started collecting and analyzing demographic data on the workforces of 13 of the country’s largest consumer banks, which are mandated by law to send some of the same data to the Equal Employment Opportunity Commission.
The study, titled “Advancing Racial Justice for Frontline Bank Workers,” scored 13 major banks on three criteria: willingness to reveal workforce demographic data, levels of diversity across the job classification hierarchy, and how employees of color perform in career development compared to their White counterparts.
The collective financial services industry earned a final overall rating of “C” from CBB for diversity and inclusion.
For Black and Latino representation, the industry got a “D,” and for Asian representation, a “C.”
Throughout the survey, Asian Americans did better than Black and Latino jobs.
According to the report, black workers did the worst in terms of job development at the banks surveyed. The overall industry got “C’s” for African Americans and Latinos’ career development, and a “B” for Asian Americans.
The banks, according to Weiner, “none of them worked that well.”
None of the banks got a better than a “C” rating overall.
Bank of America, Capital One, Citibank, and JPMorgan Chase earned the highest marks, with a “C” indicating that their diversity metrics are on par with the rest of the industry.
Banks that provided insufficient data or refused to provide any earned the lowest grades in the study. Just five of the 13 banks — Bank of America, TD Bank, Citibank, JPMorgan Chase, and Capital One — gave CBB’s researchers all of the data they needed to finish the study.
Several banks, including Bank of the West, Fifth Third Bank, HSBC North America, PNC Bank, Santander, Truist Bank, US Bank, and Wells Fargo, received overall “F’s” from CBB because they refused to provide data on “the total number of employees inside race groups at the company” and, in some cases, refused to break down their percentage of Black, Latino, and Asian employees.
The study authors wrote, “Since accountability starts with disclosure, banks that did not report data were judged accordingly.”
CBB’s results, according to US Bank, are misleading and do not reflect data the organization has publicly published, such as the 2020 Environmental, Social, and Governance report, which does include workforce demographic statistics.
Truist Bank told CNN Business that demographic data on its employees would be included in its 2020 corporate social responsibility survey, which CBB did not include in its results. According to a Truist spokesperson, the CBB report also excluded information regarding the organization’s diversity, equality, and inclusion initiatives.
According to the bank, it complies with the Dodd-Frank Act by submitting demographic data to federal regulators and lawmakers. Truist’s board of directors comprises 31.8 percent women and 18.2 percent people of color, according to data given to CNN Company. Truist’s senior and executive leaders are also 22.1 percent women and 11.8 percent people of color, according to the report.
Truist stated that the organization has always been committed to diversity, equality, and inclusion, but that incidents such as the police killing of George Floyd have prompted it to take a more aggressive stance.
“Like millions of our fellow citizens, we have taken an introspective look at where the country is today and where we, as Truist, need to go,” the bank wrote in its 2020 CSR report. “We will work diligently to help bridge our nation’s gap in economic inequality, to ensure our company reflects the diversity of the communities we serve, and to invest in organizations aligned with our aspirations for equity.”
According to the CBB survey, Bank of the West and Santander declined to provide any demographic details. Nandita Bakhshi, the CEO of Bank of the West, is Indian-American and says she disagrees with CBB’s findings, noting that her bank was named one of the best employers for diversity in 2020 by Forbes.
“My executive leadership team is more than 30% women, nearly one-third people of color, and 50% diverse – speaking 10 different languages,” Bakhshi wrote to CNN in an email. “I lead with and empower diversity because I believe this is the only way we can achieve a sustainable future. I am confident in our DEI credentials. Our diversity is one of the reasons that we are a fundamentally different bank and the leading sustainable bank in the country.”
Santander did not respond to a request for comment on the article. Requests for comment from JPMorgan, Bank of America, and Capital One were not returned.
Wells Fargo admitted it needed to do better in terms of diversity and inclusion, but added that the bank “values diversity and inclusion not only as a business priority, but because it’s the right thing to do.”
Citibank said it made its workforce demographics public last year and plans to increase Black representation in select leadership positions to at least 8% by the end of this year. In October, HSBC said it released its demographic data on its own.
