iStock illustration

A year and a half after protests against racial injustice rocked America, banks’ efforts to respond with concrete action are starting to flower. 

“Everyone is talking about DE&I; everybody wants to make a difference; everybody wants to stand out and really lead the charge and change things,” said Margaret Flynn-Martin, head of relationship management for Morgan Stanley’s wealth management business. “But to do it individually and separately, there really hasn’t been much traction. So, we feel really great about bringing everybody together.”  

Morgan Stanley launched a collaboration with 26 wealth management and asset management firms called The Equity Collective in November with a mission to change how the industry recruits. And the Massachusetts Bankers Association kicked off a new program in October to attract diverse hires to the industry and help member lenders with training resources. 

“I think it’s good for the industry because now you’re bringing people in that maybe are afraid of the banking system or underbanked,” said James Dunphy, president and CEO of Weymouth-based South Shore Bank. “If we can hire people that can communicate and relate to these communities, then they’ll come in and be part of the process.” 

Perceptions Create Recruitment Obstacles 

Some hiring practices, such as relying on internal referrals, have contributed to a lack of diversity in banking and other industries, said Kathleen Murphy, president and CEO of the Massachusetts Bankers Association. 

Longevity in certain roles, including commercial lending, has also limited opportunities to increase diversity in banking, said Tanya Duncan, the MBA’s executive vice president of revenue and strategy. 

Young people considering career paths often do not realize the range of jobs available in the financial industry, such as technology, marketing and client experience, Murphy added. 

People considering careers also often recognize the lack of diversity in the financial services industry and think they might not belong, said Carlos Muñoz, who is spearheading The Equity Collective’s work. He is also head of asset manager diversity, equity and inclusion engagement and director of relationship management at Morgan Stanley. 

Part of the initiative involves reaching high school children through a partnership with the Boys and Girls Club to increase awareness about financial services careers at a young age. 

“There’s a misconception that you have to be a finance major, an [economics] major or have an MBA to be in the industry,” Muñoz said. “That’s the first piece that we want to tackle is make sure that students understand that if they’re interested in marketing, if they’re interested in cybersecurity, there are avenues and opportunities within the industry to do that.” 

College Students Targeted 

The group is also taking an innovative approach to recruit from a diverse pool of college students as part of a partnership with Team Impact, a Boston-based nonprofit that connects children with disabilities or experiencing illness with college athletic teams.  

Team IMPACT CEO Seth Rosenzweig said employers for several years have asked for access to recruit the student athletes that Team IMPACT works with at 750 colleges in the U.S. The partnership with The Equity Collective will also involve Hive Diversity Inc., which offers a virtual recruiting platform, finally giving Team Impact a mechanism for connecting athletes with employers. 

“Student athletes are a very sought-after group of individuals from an industry standpoint in terms of their competitive nature, they’re coachable, they obviously have a lot of intangibles around persistency and resilience,” Rosenzweig said. “But also, as part of our program, they’ve had a lot of opportunity both experiential and through a curriculum we develop around empathy, around identity, how they look at the world and how to use their platform for change.” 

Rosenzweig said the partnership plans to spend about a year building the program, which he hopes will then become a template for other industries. 

Working together as part of a collective will help firms figure out how to make a difference in recruiting and move forward in ways that benefit the financial industry, Morgan Stanley’s Flynn-Martin said. 

Credit Analysis Offers Steppingstone 

Duncan, with the Massachusetts Bankers Association, has been working for nearly a decade on initiatives to help increase diversity and bring the next generation of employees into banking. Some programs, like internships, have attracted people looking for summer jobs rather than careers in banking, Duncan said. 

As part of the MBA’s new recruiting initiative, an apprenticeship program for credit analysts was created through a partnership between the MBA and the Massachusetts Executive Office of Labor and Workforce Development. The program, which is registered by the Massachusetts Division of Apprentice Standards, will certify participants as credit analysts. 

The yearlong program involves 150 hours of technical training and 2,000 hours of on-the-job training at the bank where they work. The pilot program has 16 participants from nine banks, including three from South Shore Bank. Participants do not need a college degree for the program. 

Diane McLaughlin

South Shore Bank’s Dunphy said he began looking into a type of training program for credit analysts about five years, seeing a need to find qualified candidates for this role. The bank plans to use the program to increase diversity by recruiting future candidates by focusing on Gateway Cities and connecting with community colleges.  

The apprenticeship program also provides state grants for banks to cover some of the costs. 

“This allows banks to leverage the training program if they don’t have resources for their own program,” Duncan said. “They just need to make sure they provide on-the-job training.” 

The MBA is already planning for a second training program to start this October, and Murphy said the trade group has already heard from more banks looking to participate. 

Credit analysts often move after a few years into commercial lending, a position that will likely see a wave of retirements in the coming years, Duncan said, adding that the program provides an opportunity to build a pipeline for those roles. 

Murphy added that the MBA’s members have been working to expand diversity among employees and boards, while also recognizing the business need to find solutions. 

“The power of the association is really on display here,” Murphy said.  

Banks’ DEI Efforts Start to Take Off

by Diane McLaughlin time to read: 4 min