Put DEI & Compliance Heads Together to Advance Financial Inclusion

While financial inclusion has been an organizational imperative for credit unions since the industry’s inception, more strategic attempts at bringing diverse members into the banking mainstream are taking root across the movement. Many market realities are driving a renewed sense of purpose around this imperative, not the least of which are the ongoing economic pains of ­COVID-19.

It’s not uncommon for financial inclusion programs to get stalled by the perception of too much risk and compliance barriers. It’s human nature to protect from the unknown. Culturally in the U.S., people are cautioned against talking about tough topics, like income, politics and religion, which can also be a hinderance to advancing financial inclusion strategies. After all, if we cannot even talk about it, how can we get deeply into it?

These are among the reasons strong collaboration between those leading the financial inclusion charge and those monitoring compliance is crucial to the success of any endeavor that seeks to do things differently.

Rethinking Conventional Wisdom

Perhaps no two leaders within an organization have quite as divergent points of view as the chief compliance officer and the chief DEI officer. Or at least that’s how the story goes. We tend to think of compliance leaders as gatekeepers and risk avoiders – sentries that stand at the proverbial door of the credit union protecting it from harm. At the same time, we often consider DEI champions as welcomers who think in terms of possibilities and potential, not threats or exposure. In reality, however, these two kinds of leaders are just like everyone else. They have nuances that come from personal experience, studied expertise and individual passions. Bringing the two forces together is how a credit union can transform its financial inclusion strategy from aspiration to reality.

When you think about it, both the DEI officer and the compliance officer have a common desire to make the credit union sustainable into the future so that it can fulfill its mission of providing access to financial services to its community. This translates directly to inclusion. With a thriving credit union, consumers will have greater financial services and a stronger financial well-being. That translates into a stronger community.

Doing so may not be easy. After all, people wearing compliance and inclusion hats are each coming at their jobs from unique points of view. But isn’t bringing different perspectives together at the core of all DEI strategies, including financial inclusion?

If you’re looking for ways to inspire stronger collaboration between risk and compliance and DEI teams, here are a few things to try.

Key Ways to Cultivate DEI and Compliance Synergy

Start at onboarding. Many organizations across sectors are hiring chief DEI officers and other similar leaders, and credit unions are among them. Compliance folks don’t always make the short list of leaders who newbies meet during the first week. Consider shaking things up for your new DEI leader. Setting a vision-sharing meeting with risk and compliance early on can be an effective way to kickstart long-term collaboration.

Include risk and compliance in innovation. In addition to being overlooked during new-employee orientation, risk and compliance leaders are often left out of product and service innovation talks until colleagues need their final sign off. If the new product or service was designed without controls, that can put the compliance leader in the unenviable position of traffic cop. Financial inclusion champions are hired to do things differently – to innovate outdated processes and try new things. Allowing to design these new experiences in lockstep with risk and compliance gives them a much better chance of launching on schedule.

Let DEI champs see weaknesses. Arguably more than anyone else at the credit union, compliance leaders know where the gaps are – from employee adherence to procedures to risk exposure in lending. Helping DEI leaders see them as well not only avoids exasperation of an existing problem, it builds trust between compliance and DEI teams. No one likes surprises, especially if that surprise derails progress in an area as important as financial inclusion.

Become allies for change. Nothing cultivates camaraderie faster than tackling (and solving) a tough problem. It’s not improbable to anticipate a DEI officer with a big vision for financial inclusion coming up against an unnecessarily narrow policy or procedure that threatens to halt progress. Because they carry authority and trust with the board and other decision makers, risk and compliance leaders can be an effective advocate for their DEI colleagues’ request for change. Similarly, a DEI officer can help a compliance leader push for evolution of outdated policies by helping establish a doing-well-by-doing-good business case for change.

Learn together. The credit union movement, like many other sectors, has a lot of opportunity to improve in terms of diversity – in staffing, board representation, membership and product/service delivery. Connecting non-traditional and underserved communities to the mainstream financial system is a big undertaking and one that will require continuous evaluation and improvement. Committing to helping each other learn along the way and encouraging each person or team through missteps is a great way to ensure progress over perfection.

Financial inclusion, as well as other aspects of DEI, is a journey, not a check list. It requires ongoing attention and collaboration.

While not every credit union has a chief DEI or chief compliance officer on staff, chances are someone has been assigned (or taken ownership of) these distinctive areas for the cooperative. Finding creative ways to inspire collaboration between them will not only grease the wheels of a financial inclusion program, it will also show your community its credit union is walking the walk of DEI.

Note: Together, O’Hern and Corro are currently developing compliance-centric solutions to grow more credit union relationships within communities often overlooked by the mainstream banking system.

Erin O’Hern is Vice President of Strategic Initiatives for ViClarity in West Des Moines, Iowa.

Victor Miguel Corro is CEO of Coopera, and Chairman and Founder of the CU DEI Collective in West Des Moines, Iowa.