Financial Inclusion: Why and How to Take Action

By Nicsa Admin posted 03-20-2023 10:16 AM


Inclusion in the workplace —a practice that prioritizes empathetic leadership and a universal sense of belonging — is a vital characteristic of a healthy company culture. But there’s a related piece of the puzzle our industry must keep top of mind: Financial inclusion.

“We define that as the intentional focus on creating products, services, and strategies that solve for the underserved and underrepresented communities,” Jamila Mayfield, Partner at EY, told attendees of Nicsa’s 2023 Strategic Leadership Forum in March.

The educational session, moderated by Jessica Ruggles, Corporate Vice President, Financial Wellness Thought Leadership & Market Insights, New York Life, focused on boosting financial literacy, influencing financial behaviors, and building trust.

Opportunities and Challenges

Melinda Hightower, Managing Director and Head of Multicultural Strategic Client Segments at UBS, said demographic changes in the future of wealth are giving rise to new client groups —leading savvy firms to reassess their strategies.

“There are about 2 million multicultural investors, and they have about $5 trillion in investable assets,” Hightower said. “That, for us, is an incredibly sizable opportunity. So, starting with financial inclusion means reframing and expanding the case for who your client is.”

Mayfield agreed, adding that informed design teams and the innovative products they develop can help firms capture the attention of underserved communities. “$700 billion is left annually on the table because women are not being catered to as financial clients, yet we're not developing products that resound with women,” she said. “Creating financial inclusion is about where the products are being developed, who's developing them, and the team you have sitting at the table.”

Lauren Bernstein, Head of Customer Experience for the educational software company EVERFI, pointed to the importance of education in product design and community outreach.

“EVERFI is in one out of every four public schools in the country, so we are constantly talking to teachers, students, educators, and families to learn what keeps people up at night and what they do not understand,” Bernstein said. “From crypto to sustainable investing, there are so many new concepts that learners, including those in underserved communities, haven't started to grasp. We're creating access and the ability to drive education forward.”

A common — but surmountable — challenge among firms, Mayfield said, is short-sightedness.

“Challenge thinking around what's safe and what's risky,” she said. “If you’ve never done something, you don’t know if it’s risky. We're doing pilots now on small groups of people, talking to the client base that we want to market to, and trying to figure out how we can get some of our most prominent portfolio managers and wealth advisors to connect to an entirely new market they've never considered.”

Mayfield said that most challenges in the financial inclusion space boil down to trust. “Historically underserved folks have a reason to distrust the industry, because for so long, they haven’t been recognized,” she said. “There have also been historic abuses where certain demographics have been negatively impacted by the financial system. Others witnessed the effects of 2008 but don't have the long-game understanding of financial systems that we do.”

“Then you add in the idea that we're going to create inclusive analytics,” Mayfield continued. “But how can people who don't understand the underpinnings of technology trust that what they're signing up for on their mobile phones truly is inclusive, or that something happening in the background could harm them further? We have to think about how to close this gap in trust.”

How to Get Started

Hightower said UBS is careful to seek varied investor perspectives when supporting the wealth management journeys of underrepresented groups. “Often, our industry is designing for people but not necessarily with them,” she said. “We may package a solution that we think might work for a person, but we haven't engaged that person. So, first things first, empathetic listening is absolutely necessary.”

In this current economic climate, DEI leaders are frequently asked to establish the business case for financial inclusion — and the best way to do so is through a no-cost pilot study, Hightower said.

“We started working with advisors on something we were testing called inclusive digital prospecting,” she said. “We said, ‘Hey, we're going to help you grow your business. Can you give us maybe an hour of your time over the next nine weeks?’ And we mapped out a [social media] posting plan for them — basically, paint by numbers — and talked about why we used the language that we used.”

At the pilot study’s completion, 90% of advisors still used what they were taught. Over just three months, participants had tripled growth in comparison with the control group. “Once you have one successful pilot, success begets success,” Hightower said.

In a perfect world, Bernstein said, you may be driving knowledge gains and attitudinal and behavioral changes with efficacy-based research solutions, but that’s not always the case. “It’s about making sure that anything that you do feeds into the needs of that audience, you're able to understand whether you are meeting them where they are, and you’re moving them forward,” she said.

Mayfield’s advice? “We need more voices at the table. We need everyone to be a part of this.”

For a full replay of this session, registered members can visit Nicsa’s 2023 Strategic Leadership Forum website. 


Personal views and observations of individuals contained herein are as of the date of the live event or written material and do not necessarily reflect the views of Nicsa or its member organizations. May contain forward-looking statements subject to various uncertainties. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain legal advice regarding these or any other matters. The information contained herein is for informational purposes only and does not constitute a recommendation of best practices.