Panel
The Big Shift: Diversity as a Business Rationale
- Credit Suisse anticipates that targeting underserved subsegments including women, African-Americans, and the LGBT community will drive new product development, generate wealth, and unlock economic potential, with plans to expand a "New Markets" initiative to fourth, fifth, and sixth segments if initial efforts succeed.
- Demographic projections indicate the Latino population will reach 30% of the U.S. total by 2050, with 90,000 Latinos turning 18 monthly for the next two decades, creating a prime earning cohort where 75% are millennials likely to maintain multicultural self-identification.
- Financial performance expectations include the belief that an LGBT portfolio created by employees will outperform the S&P 500, alongside forecasts that companies embracing "diversity within diversity" will similarly exceed market benchmarks.
- Strategic plans for workforce development involve implementing mandatory mentoring plans, adopting "Open Network" group mentoring to connect senior talent with juniors, and promoting flexible work time and vacation on demand as standard policies to attract and retain women.
- Market evolution predictions suggest specialized legal and financial expertise for LGBT clients regarding state marriage and estate laws will remain necessary for a short window before becoming largely irrelevant, while diversity initiatives may shift from identity-specific mentoring to cross-community learning.
- Leadership is identified as a critical driver for rapid change, with expectations that CEO and board-level engagement, alongside sustained corporate efforts similar to those by American Airlines, will set necessary tones for industry progress.
- Cultural and operational risks include the potential corrosive effect on culture and talent associated with hard targets or compensation bonuses for diversity hiring, as well as the risk of deeply ingrained stereotypes hindering engagement in the Latino market.
- Business expectations posit that authentic engagement, demonstrated through policies, marketing, and senior leadership representation, allows banks to successfully serve communities even if service providers do not match client demographics, though local service provider identity may remain important outside major hubs like New York City.