By Miriam De Dios Woodward
If sympathy is good, empathy is great.
An individual who can picture the daily challenges of another’s life can get close to understanding. But, someone who knows those challenges can be invaluable when it comes to mapping out a financial inclusion strategy. This is why we say diversity and inclusion (D&I) starts at home. To be a champion for diversity, credit unions must demonstrate diversity within their ranks. To advocate for financial inclusion, the movement’s leaders have to proactively foster an inclusive environment inside their own cooperatives.
What follows is a collection of ideas for how your credit union can do exactly that.
Rethink the Golden Rule
Since we were children, many of us have been told to treat others the way we want to be treated. Effective D&I plans challenge that rule just a bit. Rather than treating others the way we want to be treated, we should aim to treat them the way they want to be treated. This acknowledges a very real truth: How people want to be serviced, especially by their financial institutions, varies widely.
Train your employees to ask, rather than assume, when it comes to solving problems for members. “How can I make this situation better for you?” or “What is an ideal outcome for you?” are great questions to ask when approaching new members.
Take a Team Approach
Another go-to piece of advice many of us have been given is to fight our own battles. Here again, a workplace that champions D&I throws something of a wrench into that way of thinking. Instead of encouraging people to stand up for themselves, progressive leaders who foster an inclusive environment tell their people to fight battles alongside their coworkers.
Employees may find it easier to fight for others when they have a better understanding of the diversity issues faced by their colleagues. One of the best ways to achieve that understanding is to become a student of the people they work with. D&I expert Robin Pedrelli refers to this as becoming culturally competent. “Take the time to learn about different cultures, races, religions and backgrounds represented by your colleagues,” she suggests. These learning activities don’t have to be “all business;” in fact, they’ll probably be more effective if they are fun.
Reframe the Word ‘Diversity’
Some leaders are limited in the way they think about diversity, which can also influence how they think about inclusion. While it is important to ensure the people who make your credit union run are ethnically and culturally diverse, it’s also true that the cooperative will benefit from the thought leadership of individuals from diverse age groups, education levels and socio-economic classes.
Reexamine the Risk
Pablo DeFilippi, SVP of membership and network engagement for the National Federation of Community Development Credit Unions, explains there is a misperception that only A and B paper borrowers can produce the kind of revenue that makes a lending program sustainable.
“The risk of serving low-income consumers is more perceived than real,” said DeFilippi. “When a credit union is focused on C, D and E paper, they are financially stronger. A and B borrowers produce very thin margins. The lower you go on credit scores, the larger the market and the fewer the competitors. When the institution has more income, it is in a better position to manage risk. Beyond the business argument to go deeper in the marketplace, credit unions should be thinking in terms of their community impact. What our research demonstrates is you can do well by doing good.”
Put Yourself There
A big part of presenting an authentic face to the community you want to serve is providing members easy access to services where they live and work. Embedding the credit union fully in the community with a branch location is ideal. It very clearly communicates intention and commitment; it also becomes easier to recruit employees with shared backgrounds and experiences.
However, avoid rushing into a new branch location. Partner with an organization like Coopera, which deploys a proprietary Hispanic Opportunity Navigator assessment to help credit unions to, among other things, determine how ready they are to serve a new market prior to expanding to a new location.
Where to Start
As you consider different directions for your strategic financial inclusion plan, consider starting with the Hispanic market. As one of the largest, youngest, fastest-growing and most underserved consumer segments in the U.S., Hispanic communities present a terrific opportunity for you to experience immediate and measurable impact.
From there, you may find your financial inclusion successes and lessons learned can scale to other markets, allowing your organization to efficiently change the financial lives of even more underserved people.
For more advice on programs, processes and activities that foster D&I, along with real-life D&I success stories, download the white paper Financial Inclusion Starts at Home.
Miriam De Dios Woodward is CEO of Coopera.