Why Diversity and Inclusion is Key to Success
Can a firm really understand the needs of their customers if they do not have a diverse and inclusive workforce?
Diversity and inclusion are now considered a key factor by regulators in creating a healthy culture in financial services. The FCA, PRA, and Bank of England published a joint Discussion Paper on diversity and inclusion in the financial sector. It is also one of the key drivers for success — if you understand your workforce and your customer you can create more suitable products and be trusted by customers.
There are many strands to diversity and inclusion, each with its own challenges which need to be tackled. The need to address diversity and inclusion is in response to the toxic culture in financial services firms. Executive teams are still largely white, male, and middle class which leads to close-mindedness and subsequently poor decision making and practices.
The regulator's emphasis is on looking at diversity and inclusion as a driver for a change in culture as they see representation from board level to entry-level positions as key to ensuring positive customer outcomes, employee engagement, and better governance.
Having a more representative workforce will allow firms to understand the customer’s needs and ensure that they are protected. Employees need to feel confident to speak up against poor policies and practices and customers need to feel that their needs are responded to.
It is not just about ensuring each level is representative but also introducing policies covering accountability, remuneration, training, and the design of each system.
A diverse and inclusive workforce recognises the language that should be used, the caring responsibilities that an employee may have, understanding the needs of its employees in the new ways of working, and the impact that policy decisions have on both customers and employees.
Recruiting people from diverse backgrounds does not automatically mean that there is an inclusive workforce — it starts from the top. The executive team are role models and only when they start to begin asking themselves about the recruitment practices, how decisions are made, and what the outcomes will be that they can start to tackle areas that need improvement. These are the building blocks as it’s only then that a firm discovers its purpose, creates a roadmap, and is able to reach its destination.
