Majority of Black Americans See Systemic Bias in Financial System: RPT
Lisa Osborne Ross, CEO of Edelman in the United States, joins Yahoo Finance to analyze the findings of the 2021 special report of the Edelman Trust Barometer revealing a systemic bias in the financial system and the impacts of financial inequalities caused by racism .
KRISTIN MYERS: A new report from Edelman, which has yet to be released, shows the lack of trust between financial service providers and communities of color. We have Lisa Osborne Ross, CEO of Edelman USA, here to give us an advanced look at the results. So Lisa, I hope you can do some directing here for us. How is the relationship, or how would you define the current relationship between communities of color and that of financial service providers?
LISA OSBORNE ROSS: Because I am an optimist, I will say it could be better. There are systemic issues that communities of color have historically addressed with the financial industry. Our research indicates that a lot of the things we’ve seen historically – skewed processing, unwanted environments, excessive surveillance, et cetera – continue. However, there are a few bright spots, and the ability to fix things is much better.
ALEXIS CHRISTOFOROUS: I want to dig into this report before I talk about how to fix things, just to highlight some of the findings here. You say communities of color have reported systemic bias regardless of their personal financial situation, which means that even if someone had a high income, their experience was sometimes even more negative. Can you tell us about it?
LISA OSBORNE ROSS: Yeah, you know, that was, for me, one of the most intriguing discoveries. And the main conclusions, again, were, on the one hand, the existence of a bias. Black Americans, API, Latinx as a whole said they had experienced biases in all sectors. The bias was with mortgages, with bank insurance, auto insurance, credit cards, et cetera. The second key finding is the one you just spoke about, regardless of income, that the level of prejudice and the level of discrimination persist and in some cases are even higher.
I think this one is particularly interesting because the last time I was on your show, we published our data that talked about the racism of people or institutions? And respondents said it’s really more people. And I think this research indicates that’s not actually true.
We always talk about the difference – people say, Lisa, is it class or is it race? This is the race. Because we have people in the higher income brackets, people making over $ 100,000 and people making a million dollars a year, and they face the same systemic biases as low income people. . So it doesn’t matter whether you make any money or not, you’re still considered a person of color and then a series of assumptions are made about you no matter what.
KRISTIN MYERS: So what is the impact of this racism? As you mentioned, it’s not class, it’s race. What is ultimately the ultimate result of this racism?
LISA OSBORNE ROSS: It’s disgusting, in fact, and it’s disheartening. But again I’m optimistic so I think it can be better. The impact is that, first of all, we are not using all the resources that we might have. Communities of color make money. We are entrepreneurs. There is a story of that – we are celebrating the 100th anniversary of the Tulsa race riots.
The first female millionaire was a black woman, Madame CJ Walker. And so what you do is eliminate and discourage people from putting their money into the system, because in the absence of fair treatment – people use payday loans, they use payday lenders. pledges, they put money in their own homes. And the other impact – and it was acute within the Latinx community – is the impact on mental health.
People from all walks of life in all of these categories – Latin, API, African American – said the impact is palpable. It doesn’t make them feel good. This makes them insecure. And the Latinx community, 59% said, I’m uncomfortable even talking about money. It’s never good. Another 52% said, not only am I uncomfortable talking about money, but it affects my mental health. It makes me sick.
When I think about it, I think about the way I am treated, the way I am discriminated against, and the lack of opportunities I have because of this prejudice. So it harms our systems, it harms our institutions and it harms people.
ALEXIS CHRISTOFOROUS: So, in the time that we have left, just tell us about some key things that companies in the financial services industry can start doing today to start making things happen here.
LISA OSBORNE ROSS: I won’t say they are easy, but I will definitely say they are doable. First, create representation in your workforce. Second, consider bias mitigation training. Some prejudices are real, but some prejudices I will accept that people really don’t know they are doing it. So look at how you can train people to spot bias, prevent bias, and make sure there is repercussion when there is bias.
Third, reassess risk assessments. One of the first questions you asked was, is it worse among communities of color that have higher incomes? Absoutely. So look at the types of questions you ask. How do you rate the risk and how do you rate the commitment? And look and see if there’s a bias there.
And then the last: create inclusive and welcoming environments. The volume of communities of color saying when they interact with financial institutions, they’re talking about banks in particular – things like not being greeted when you walk in the door, being treated differently. When you have a welcoming environment, people feel better about giving their money to you and working with you to make their money grow, which is good for them and good for us as a nation.
KRISTIN MYERS: All right, we’re going to have to leave it there. Lisa Osborne Ross, CEO of Edelman USA, thank you very much for joining us today.