Disguising racial bias: pervasiveness of discrimination in banking and financial technology sectors
In a growing trend towards inclusivity, the banking and fintech sectors are making strides in promoting diversity. However, a closer look reveals that significant challenges persist, particularly for Black employees.
Recent reports from the Anti-Discrimination Agency in Germany indicate a concerning number of discrimination cases related to access to banking services between 2021 and 2023. Over half of these cases involved racist discrimination or ethnic origin. The situation is equally alarming in the UK, where the BAME (Black, Asian, Minority Ethnic) share in Fintech companies stands at 20 percent, but the share of black employees is only around 3 percent.
The Afroensus in Germany shows that businesses and services are an area where racism is a daily reality for many people. Nearly 97% of Black people in Germany reported experiencing discrimination in the past two years. Similar findings emerge from studies in the US, where Black employees in financial institutions often describe a lack of support and a climate of microaggressions and open discrimination.
In the tech industry, systemic discrimination against Black employees has been observed, such as at Google, where over 4,000 Black Googlers alleged they were pushed into lower-paying positions, overlooked for promotions, and deemed "not Googley enough."
Across the EU, the EU Fundamental Rights Agency (FRA) reports a clear increase in racist discrimination, with 34% of those surveyed of African origin reporting discrimination in the past year. KYC processes are often tailored to German standard biographies, leading to denials of online account opening for many people for years.
Financial institutions often advertise diversity initiatives, but systemic problems persist, including racist exclusions in credit granting, application processes, and product design. Company-internal DEI networks (Diversity, Equity & Inclusion) in financial institutions do exist, but they do not have the influence or the mandate to make the corporate culture inclusive.
In the US, among the largest U.S. banks in 2023, the share of racial minorities in the workforce varied significantly. JPMorgan Chase reported the highest diversity, with 56% of employees identifying as racial minorities. However, Black employees are underrepresented in senior leadership roles. For example, at Bank of America in 2023, ethnic minorities made up 43% of U.S.-based managers, but only 27% at higher management levels and 25% at executive and senior levels.
These findings suggest that while progress toward racial and ethnic diversity is ongoing in banking and fintech, the lived experiences of Black employees often reflect continued challenges related to equity and inclusion. Germany performs particularly poorly in the FRA report, with 64% of Black respondents feeling discriminated against within the last 12 months, and over 70% reporting experiencing racism over a five-year period. The Federal Anti-Discrimination Agency received over 8,800 consultation requests in 2022, with 43% concerning racist discrimination.
As the banking and fintech sectors continue to evolve, addressing these persistent challenges will be crucial in fostering a truly inclusive environment where all employees can thrive.
- In light of the troubling reports from the Anti-Discrimination Agency in Germany and the BAME (Black, Asian, Minority Ethnic) share in UK Fintech companies, it is evident that issues of diversity-and-inclusion continue to persist in the banking and finance industries, particularly for Black employees.
- The findings from the Afroensus in Germany, studies in the US, and the EU Fundamental Rights Agency (FRA) indicate a profound concern, with a majority of Black individuals reporting experiencing discrimination in various banking and business services, highlighting the need for significant change within the banking-and-insurance sector.
- The systemic discrimination against Black employees in the tech industry and financial institutions calls for transformative action towards a more equitable and inclusive environment, as progress towards racial and ethnic diversity remains ongoing while the lived experiences of Black employees reflect persistent challenges to equity and inclusion.
