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A new report from the Greenlining Institute, Supplier Diversity Report: Banks Still Struggle to Contract with Diverse Businesses, finds that eight of the largest California banks by deposit market share continue doing minimal contracting with women and minorities. The eight studied banks were Bank of America, Wells Fargo, JPMorgan Chase, Union Bank, US Bank, East West Bank, Comerica and Citibank.
By analyzing contracting with minority and women business enterprises, researchers discovered:
- 42 percent of all 2014 contracting dollars went to minority business enterprises (MBE) while 5.49 percent were given to California MBEs
- in 2014, banks spent 2.83 percent of their total national procurement budgets and 5.34 percent of their California procurement dollars with women business enterprises (WBE)
National Trends:
- from 2012-2014, smaller banks (Union Bank, East West Bank and Comerica) increased their percentage of dollars spent with MBEs; most large banks (Bank of America, JPMorgan Chase and US Bank) saw their percentages spent with MBEs decrease during this period
- Wells Fargo, JPMorgan Chase and Union Bank did not report 2013 data on national procurement with WBE; Bank of America, US Bank, Comerica and Citibank all increased their proportional spending with WBEs from 2013-2014
These findings show financial institutions need to continue strengthening their efforts in contracting with minorities and women. As foremost entities in their sector, they have the power to be leaders and set the example for other firms.
Minority and women inclusion needs to be an intrinsic part of the company culture. The fact that some banks had their spending in minorities and women decrease from one year to the next shows that diversity and inclusion is a process that requires daily engagement.
In addition to increasing their diverse spend, companies must increase the number of diverse companies with which they work. Increasing the diverse spend dollar amount is great, but a higher amount of minority- and women-owned businesses should be added to supplier diversity networks to increase the impact. It cannot be simply about how much money you are spending; companies must also consider how many businesses they are helping.