More and more organizations are committing to diversity, equity, and inclusion (DEI) policies and practices to build a more diverse and just workplace. This is even more important for financial institutions in their outreach to the communities they serve.
In this episode of The Digital Banking Podcast, Shannan Herbert, the EVP of Inclusive Credit at Stratyfy, explained what DEI means and how to implement it in your organization. She and host Josh DeTar discussed how to improve DEI in an organization, root out bias, and how technology can help with that.
⚡ DEI is evolving, so we need to know what DEI means. Today, more financial institutions are recognizing the value of a diverse workforce and are focusing on advancing diversity, equity, and inclusion (DEI). However, according to Herbert, a focus on DEI means more than just hiring a diverse workforce. Your institution’s Chief Diversity Officer needs to have a budget and actually do something about it. “It’s not just putting Black and Brown faces in predominantly white spaces; that’s not it,” said Herbert. “It’s really embedding some DEI strategy within the overall framework of the organization and having that flow to each one of those departments, to the lending strategy, to policy creation, to approval. Who’s around your approval table when you’re looking at loans when they’re coming in, and when you’re deciding those loans? Going back to the community, having a real connection to community and to capital because that’s what real DEI looks like from my lens; not just the performative, ‘We’re going to do better,’ and then three years later, you haven’t done much.”
⚡ How can you improve DEI in an organization? According to Herbert, making improvements to DEI at an organization is not necessarily about looking at what you’ve done wrong, but at what more you could do right. “That is a real accountability measure that we all should take,” she explained. “It’s looking to see, ‘Where could I have done better?’ It doesn’t mean that I was necessarily doing the wrong thing, but I could have been doing more of the right thing. And so if I could be doing more of the right thing, then I want to know what that is so that I can do it. And I can embed that in my strategy. I can embed that in the way that I create products and services. I can embed that in my marketing. I can embed that in my community outreach.”
⚡ Both technology and the human element should be used in the lending process. Despite many advances in underwriting technology, Herbert claimed that the human element is still essential. “The technology can come in and help mitigate the bias by removing that human factor and increasing objectivity, but that other piece that we’re talking about — the community input — technology may not be able to capture that part of it,” she noted. “I think that there’s a need for both. You can’t let the machine run by itself, and I definitely don’t think that the human can run by itself either because we have too many instances of bias being incorporated into some of those decisions.”