How Financial Services Companies Can Advance Racial Equity and Create Business Growth
April 17, 2019 /3BL Media/ — Historically, financial institutions in the United States have not served people of color effectively or fairly. Even today, people of color have less access to credit, pay higher interest rates for loans, and are less likely to receive venture capital funding as compared to their White counterparts. Serving these markets effectively is not only a moral imperative, but also an economic opportunity to enhance a company’s bottom line.
New research from FSG and PolicyLink, funded by the Robert Wood Johnson Foundation, suggests that finance companies must serve the unique needs of markets of color in order to stay competitive in tomorrow’s marketplace.
Finance companies that serve markets of color effectively will create a competitive advantage, strengthening their external business environment by supporting public policies and norms that expand financial security.
Our research identified four financial services companies that have taken promising steps in this direction— Citi, Oportun, OneUnited Bank, Prudential Financial, and Impact America Fund—which have business growth through their strategies to serve consumers who have historically been excluded.
The report follows a 2017 report, The Competitive Advantage of Racial Equity, highlighting companies that have found new sources of growth and profit by driving equitable outcomes for employees, customers, and communities of color.
FSG is a mission-driven consulting firm supporting leaders in creating large-scale, lasting social change. Through customized consulting services, innovative thought leadership, and support for learning communities, we help foundations, businesses, nonprofits, and governments around the world accelerate progress by reimagining social change. Learn more at www.fsg.org.
PolicyLink is a national research and action institute advancing racial and economic equity by Lifting Up What Works®. PolicyLink is guided by the belief that the solutions to the nation’s challenges lie with those closest to these challenges: when the voice, wisdom, and experience of those traditionally absent from policymaking drive the process, profound policy transformations can emerge. Learn more at www.policylink.org.