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Julien Courbe, PwC’s US Financial Services Industry Practice Leader, recently spoke with colleagues Shannon Schuyler, Alie Hoover and Paula Theus about what we’ve been seeing in the financial industry — and our own experience with building a culture of belonging.
Let’s start our conversation today with an overview of diversity and inclusion (D&I) and some of the context around all the attention that it has gotten. Shannon, can you tell us what we mean by D&I? I’d also like your take on how this fits into the broader context of ESG — the environmental, social and corporate governance factors shaping corporate behavior today.
At PwC, when we look at D&I, we’re really trying to look throughout our entire organization to give everyone the ability to succeed here regardless of their background and what they bring in. But we also want to benefit from their background and their cultures and their experiences, and being able to embrace those incredible differences. We want everyone to feel that this is a place where they feel they belong, where they feel safe, where they really believe they can learn and grow, both personally and professionally.
I’ve been pleased with our progress, but there’s no denying that it’s been shaped by events of the last year, including the Black Lives Matter movement, the killing of George Floyd and others at the hands of the police, and to the more recent attention to violence against the Asian-American community.
Julien: Absolutely. We now see D&I on the agenda of every financial services CEO. Frankly, it has become a business imperative. While we don’t necessarily expect new regulations in the short term, lawmakers and regulators are already putting pointed questions to the CEOs of the large financial services firms, and they’re going to set some level of expectations, at least to start.
This isn’t just about being reactive. We also believe there’s a major opportunity for financial services firms to play a bigger role around social inclusion in their communities, specifically in helping those in underprivileged communities. In some cases, that may mean addressing the unbanked population and empowering people to change their circumstances.
Let’s dive a little more into this. Alie, can you tell us about what you’re seeing when it comes to D&I in financial services?
We’re definitely hearing a lot from our clients on the topic. It’s now getting attention from the C-suite and boards. We're also seeing that the intentions are there at many financial institutions. Companies are now making major announcements with high profile, high-level funding for investment initiatives in D&I efforts. And we’re seeing that the social imperative is also reinforcing the business imperative.
Increasingly, financial institutions should focus on D&I to attract talent so they have a workforce that represents the diversity that exists in society and their potential customer base. Right now, it’s all about acquiring more customers, and nobody wants to miss out on significant growth opportunities because they're simply not representative.
As you mentioned, there’s also focus from regulators and congressional oversight committees. Even if there isn’t new regulation, we do expect increased scrutiny on issues like community reinvestment and fair lending.
Right now, many banks are struggling to figure out what’s actually going to work. So far, there’s been no silver bullet. It really takes a multi-layered approach and a lot of leadership focus, time and attention. Many organizations have spent a lot of energy on building out D&I programs, but they haven’t necessarily seen the results.
Julien: I agree, Alie. I think a lot of companies are still trying to figure out how to create that sustainable change for the long term. It’s interesting to think about the value of having firms represent their clients. To some extent, we've been taking steps to this end within our own business and our own financial services practice. We’re very focused on creating a diverse team that serves clients and customers well — and represents them as well.
Let’s flip to actions and recommendations with a look at some of what our own firm has been doing with reporting aspects of D&I. Shannon, can you talk a bit about PwC, our transparency report, and what we’ve learned?
Shannon: I think that for years, the whole journey around D&I has been around programs and creating a culture of belonging, but hasn’t necessarily focused on the data. And when you think of everything that we do from a business construct, we look at it from the data, right? We measure. Are we making progress? Where do we need to make changes to our systems or processes or behaviors?
At PwC, that’s really what we wanted to do. We’d already been planning to do a D&I transparency report — but after the killing of George Floyd, instead of waiting, we actually ended up doing it last summer. We were really focused on getting our people to realize that this has to be all of our jobs, that we all have to be accountable. And to understand the true challenges, we wanted everyone to actually see the numbers. It means having an appreciation for what we’d done well around recruiting, pay equity and supplier diversity. But overall, when you look at representation by different levels all the way to partners, we certainly haven’t made the progress we thought we had.
Paula, I know you think a lot about the real people behind the numbers. The data is incredibly helpful to be able to track what we need to do, but I’d love to bring you into the conversation to talk a bit about how you bring all this to life from an operations perspective.
Well, as you said, our strategy is rooted in supporting our people’s career journey from the onset. And we’re using data to help us identify inflection points where we can introduce strategic interventions.
We’ve built a very robust diversity internship program, and we’ve developed a two-year onboarding experience for our Black and Latinx campus hires. This is focused on ensuring that they have an equitable experience and a sense of belonging from the onset of their time with the firm.
We’re also customizing learning experiences to help the majority be more thoughtful in how their decisions impact others. We’re in the process of launching an Inclusive Leadership Digital Badge focused on empathy, emotional intelligence and allyship. And we’re looking at how we handle deployment of our employees so that they all get the experiences they need in order to grow and develop here at the firm.
We also have increased our focus on the partnership pipeline by introducing a three-year program that provides support mentoring and coaching at earlier points in an individual’s career. The program’s particularly aimed at improving the experience of our women and racially diverse employees, and we’re continuing to drive more candid dialogue on a number of topics.
From a broader societal perspective, with all the social injustice and unrest that we’ve been experiencing, we’re encouraging our leaders and our people to engage in these conversations so that everyone has access to an open forum.
Julien: Let’s talk about the future — the trends we expect around D&I, whether that’s regulatory or about market pressure. Alie, where do you think we’re headed?
Alie: You know, financial services really is a unique industry because of the role it plays in allocating capital and making decisions about things like home ownership, business loans and so many other money matters. So we expect regulators will continue to look more closely at the role of banks in the community, especially in the area of housing. Under this administration, this is likely to be a key topic. I also think we're going to continue to see increasing focus on the diversity of the senior leadership teams and the boards of financial institutions.
We also could see a lot more focus from some of the listing services and the public at large. So, as Shannon mentioned earlier about ESG, banks and financial firms more broadly are really going to want to think about how they embed this. You’ll want to connect your purpose and your strategy to ESG — not just about reporting, but in core parts of your business, so you're really thinking about this in a holistic way.
Paula: I absolutely agree. I think the key takeaway is that D&I is part of something larger. It’s a core piece of the “S” in ESG, and that’s not about checking a box. It’s about running a responsible and responsive business for the long-term. It’s about connecting your business to societal impact, creating a sustainable business advantage and value, and figuring out how you get there.
Shannon: Exactly. And the challenge now is about actions. We’ve got to get past the talk of this as something we want to do, right? That means looking at very specific changes that we can make to move the needle, because this is an issue where you actually can’t get to a place of transformation without intention and focus. To get there, you’ll have to really dig in, and your leaders will need to be clear that this is really instrumental to the success of your firm — and the responsibility you have within society.