The imperatives for change
Achieving a higher bottom line
The challenges created by the global pandemic and recent racial and social injustice events have increased awareness of inequities and financial instability across the globe. They highlight the need for financial institutions to make a global commitment to advance financial inclusion—providing access to useful and affordable financial products and services1 —to meet the needs of the underserved2 market.3 The Global Findex4 database shows that 1.7 billion adults worldwide are unbanked,meaning they donot participate in any basic financial products or services. In the United States, more than 30 million households are considered unbanked or underbanked5—they have limited access to basic financial products and services. Therefore, a range of opportunities exists for financial services providers to be a force for change.
Right now, financial industry leaders have an opportunity to endorse a meaningful and sustainable shift toward performing fundamental roles in more direct, personalized, and socially responsible ways. Doing so would not only demonstrate resilience in uncertain times; it would signal to stakeholders that financial firms place just as much value on safeguarding our planet and people as they do on making profits. By addressing the strategic business imperatives that serve the greater good through financial inclusion, financial leaders can make a decisive step toward achieving a higher bottom line.
This is the first report in a series Deloitte has designed to assess and address the market landscape of financial inclusion. As a key part of this series, we have developed the financial inclusion framework (figure 1) to outline the drivers of change. The framework serves as a tool for financial services organizations to spark discussion across leadership teams and their stakeholders as they evaluate the progress they are making in their pursuit of purpose-driven, societal impact and profitable shareholder value.
Corporate social purpose
Global C-suite surveys have shown that CEOs, when asked to measure and evaluate their business performance, ranked making a positive societal impact high on their list of factors.7 Creating positive social impact is clearly a worthwhile goal. But it is in how an organization devotes meaningful effort, time, and experience toward public well-being—its corporate social purpose8—where committed, sustainable change can be realized. While businesses have a responsibility to pursue profits for their shareholders and their organization, having a well-defined corporate social purpose can also build brand and reputation, attract and retain talent,9 and contribute to the betterment of the communities they serve. This, in turn, helps the firm appeal to socially conscious customers, promotes innovation, and stimulates opportunities for profitable growth by penetrating new market segments.
The business imperative for change
Sustainability; climate risk; diversity, equity, and inclusion (DE&I); ESG investing; and financial inclusion are important considerations in defining an organization’s corporate social purpose.
Financial inclusion usually falls within an organization’s corporate responsibility programs, and investments within that model have yielded some progress. For example, an ongoing study by the Federal Deposit Insurance Corporation (FDIC) shows that the share of US households deemed unbanked or underbanked remained static from 2009 to 2017. Within that trend, though, the number of unbanked households actually decreased by 600,000, while underbanked households increased by over 3 million. And the unbanked population continued to shrink, by another 1.3 million, from 2017 to 2019.10 Ultimately, industry leaders should transition from a mindset of financial inclusion being solely a responsible endeavor, to one that equates corporate social purpose with return on investment.
Aligning purpose and profit
The four dimensions of financial inclusion
The financial inclusion framework (figure 1) enables leaders to assess and address their organization’s financial inclusion strategy across four dimensions: organization, offerings, community, and the broader ecosystem. Firms should evaluate the strategic, operational, and technological impact on an organization’s stakeholders—its workforce, customers, vendors, partners, and the external marketplace–within each of the four dimensions. This exercise can help leaders determine priorities, develop strategies, and forge new market relationships to move from strategy to action. To uncover unique competitive advantage, financial institutions should consider the issues broadly, while addressing them specifically within an organization’s financial inclusion strategy. They can achieve the highest potential benefits of financial inclusion when leaders address and align the four dimensions within their financial inclusion goals. READ MORE
By Courtney Davis
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Mid-career women are often surprised by the levels of bias and discrimination they encounter in the workplace, especially if they’ve successfully avoided it earlier in their careers. After speaking to 100 senior women executives, the authors identified three distinct kinds of bias and discrimination faced by mid-career women. They describe each bias and conclude with recommendations for overcoming them.
Bain research shows that men and women have consistent motivations when it comes to work, across factors like financial orientation and camaraderie. They also have similar attitudes on inclusion, with fewer than 30% feeling included in the workplace. Despite a lack of intrinsic differences, women and men continue to have different outcomes and experiences at work, due to meaningful imbalances in occupation choice, prioritization of flexibility, and the perpetuation of biases.