However, banks are not with the times and consistently fail to promoted diversity within their ranks. Their failure to attract more minorities to utilize their banks instead of the trusty old mattress is a result of their failure to let minorities into the upper echelons of the banking world.
According to an article in the American Banker Journal the Government Accountability office released a report stating that there are 53 people in this country that don't use banks. This group consists of immigrants and other people of non-white descent. Such people take their money and hide it in their house, a safe or some other traditional method of storing their money. By doing this, these people continually lose a larger portion of their money every year due to inflation.
Even though the country is made of up of nearly 40% of minorities, the banking industry has only 2% of its upper management from minority descents (Corralejo & Cooper, 2007). This means people like Hispanics, Asians, African Americans, etc. are not given the opportunity to make it to the top. Failure to provide avenues of growth means that the banking industry will continue to be owned and controlled by a select few.
One may ask, “So what if the banks don't have minorities?” While it is true that many of us wouldn't know the difference in the short-run if minorities weren't allowed into the executive management, we would eventually feel its affects in the long-run. Consider the following key points:
Less Innovation: There is a good possibility that the financial capital of New York for investments may be changed to London UK. That means they are doing a better job at offering financial services than we are in the United States. Diversity allows for more innovative solutions because people of different backgrounds have different perspectives. These different perspectives contribute to finding a more holistic solution that please customers needs.
Segmentation of Society: When minorities don't have equal opportunity to move up the social ladder, we will have a society of the “right class” and the “wrong class”. The “wrong class” will become more agitated and angry about not having access to resources and this can cause all types of problems such as riots, crime, social upheaval, segregation, etc. Nearly every civil war and revolt has been started because the “wrong class” didn't have access to prosperity.
The banking industry should consider the long-term ramifications of decreasing their ability to compete in the future and their overall responsibility in maintaining a happy and productive society. By allowing for more minority representation it is hoped that the 53 million people who are not engaged in utilizing banking services will be brought into the fold earning more capital, newer products will be developed and the U.S. will maintain its authority as a banking leader.
