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Building Cultural Competencies In Financial Services: When Diversity Training Isn’t Enough

Just Economy Conference – May 13, 2021

 

The country is undergoing a demographic shift that the financial services industry has yet to catch. Prospective clients for financial services products are increasingly young and people of color and yet, the institutions who serve them largely skew older, male and White. This session explores why siloed D&I initiatives fall short and how an organization can build the cultural competencies needed to serve burgeoning communities of color.

Speakers:

  • Marisa Calderon, Chief of Community Finance and Mobility and Executive director of CFI at NCRC
  • Stacie de Armas, SVP of Diverse Consumer Audience Insights, DEI Commercial Initiatives
  • Mike Valdes-Fauli, President and CEO of Pinta
  • Maria Vergara, Director Community Lending at Fannie Mae

Transcript

NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Calderon, 00:00 

Welcome everyone, thank you for joining us today for our session on building cultural competencies in financial services. I’m Marisa Caldron. I am Chief of Community Finance and Mobility at NCRC and also executive director of our CDFI. And with me today I have Stacie de Armas. She is SVP of diverse consumer insights and initiatives for the DENI practice at Nielsen. She’s been recognized also by Latina-style magazine as a top Latina executive and three years in a row recognized as one of the foundations most powerful and influential Latinos in entertainment. So welcome Stacie. And with me also is Maria Vergara. She’s currently Director of Community lending at Fannie Mae. Previously, she served as president of Narp consulting services also, which we’ll hear more about in a little bit. Maria has also been recognized as a 2020 Keystone Award finalist by M Report. Welcome Maria. And finally, Mike Valdes-Fauli. Mike is president and CEO of Pinta. It’s one of the largest growing agencies in the country, for clients include recognizable names like Comcast, Heineken, Microsoft, the NFL, Realogy, and T Mobile. And Mike is also an accomplished writer who has been featured in publications that you’ll all recognize, like the New York Times, Wall Street Journal, Forbes, CNN, and the Miami Herald, just to name a few outlets. so delighted to have you all here today and appreciate your contributions. So just to set a little bit of framework for what we’re going to be talking about. The US has been undergoing a demographic shift for quite some time now, driven largely by communities of color. Latinos, have been widely recognized as the fast native-born demographic, over 60 million Latinos in the country, more than 18% of the country’s population. The back black population is also large and growing 46 point 8,000,013% of the country’s population. So really, we’re talking about over a third of the country’s current population. And, you know, this segment is what’s driving a lot of native-born growth in the United States. So what I’d love to be able to start just to level set on what it means to be culturally competent. So Maria, you started an agency that was really directed toward financial services, and I know a lot of the work that you did there was around cultural competency. So I’d love if you can maybe start us off with just giving us a little bit of context for what it means to be culturally competent in outreach. 

Vergara, 02:46 

Sure. And again, if you have any cultural competency, the way that I would define it is really the ability to connect with someone who is not from your native culture. I don’t believe that you need to be from that particular culture, but you have to have an affinity to the experiences. And, of course, if you’re from that segment, that would come more naturally. But I wanted to say that first because I think that the thought that you have to be of that particular culture or segment makes people either afraid, or maybe as an excuse or a crutch not to broach the topic, because because of that fear or insecurity, you just have to have a curious mind, be open, and, and connect with people on a genuine level. Okay, great. 

Calderon, 03:43 

Okay, great. Thank you. So Stacie, I know that there’s that you’ve done a lot of analysis and kind of looking at data with respect to different population segments. I wonder if you could, from your perspective at Nielsen, if you have any thoughts on cultural competency, and how that plays a role in markers outreach? Next, Mike? 

Armas, 04:11 

Sure. Thank you so much, and thank you for the invitation to be here. And welcome everyone who’s watching live, you know, as Maria suggests that I think there’s some, you know, prior behaviors or, or thoughts that were pretty common, where they would think, well, let’s just ensure that we have, you know, someone in the room to, you know, to dialogue about the community or represent the community. But most certainly, when you do real academic, you know, research on different community groups, you come to realize what cultural competency really should look like, based on how the community is today. And there are so many varying factors, right? I mean, a lot of these I think, are low hanging fruit, certainly, anyone in this space, who’s in marketing, or who has been, you know, for the last 10 or so years would know, things, of course, like geography and then and the different groups within just for example, the monolith of Latino right, we saw actually a lot of evidence of how different people are, culturally, even within the same group of Latinos, we saw that during the election, right post-election, we can very clearly see how our own community had very different reactions and feelings as a result of perhaps their home countries, or the experiences that they had had in their migration to the United States or their cultural history. So if you think about developing cultural competencies as a brand, when you’re speaking out to communities and wanting to have relevant touch points for me, and of course, this is with my researcher hat, having a really distinct understanding not just the group, but really the different cuts within any group. And dynamically looking through a cultural lens of these communities, certainly, in the long run, allows you to have a better, you know, ROI with any community group. And I know that that’s not our goal here today, right? We’re not just talking about how do we move products, what we’re talking about is touch points, we’re talking about relevancy we’re talking about resonating. But you can’t do any of those unless you have a real understanding of culture. And you can’t really have a good understanding of culture, unless you have folks that are in the room that have done the right research and have the best understandings of how your brand or your products or really serve the community in the way that they are asking to be served. 

Calderon, 06:32 

And Mike based on a lot of the experience that you have at being fat. How does this play into both your own approach as well as some of the advice that you give to your clients? 

Valdes-Fauli, 06:43 

Yeah, thank you. So first of all, I completely concur with my co-panelists on some of their commentary. For us, it’s important to have nuance and respect. So rather than sort of lead with the stereotype, we try to look for an insight that is organic, authentic to the marketplace. One of the places that starts and Stacey alluded to this is that it’s not one homogenous Hispanic market. It’s a series of sub-segments, you know, from country of origin to length, language dominance to acculturation levels, whether you’re first second or third generation. And so any product or service that has tried to kind of reach that audience needs to start from a place of saying, Wow, I really need to do my homework. And the more homework you do, the more ROI you will get, as well as kind of raising the service that we’re giving to the community that so desperately needs it. I just want to touch on one other thing from Stacy’s remarks. I agree with you. It’s not all about Moving product. But I’m always thrilled when there’s shared value, right. So when it’s not just a box to check for diversity, or a check that you’re blowing up in a photo op, and then you go back to making money, if you can somehow combine the two, that’s a win win win. That’s where one plus one can equal three, because it becomes more sustainable for a company to continue giving back to the Latino community if they’re also getting something tangible, in return. And I think long ago, there was some embarrassment, it was like a dirty word to try to segment and also benefit from that. But I think as long as it’s good, as I said, with respect, with insights and not stereotypes, it can be a win win. 

Armas, 8:16 

And if I can just add to what you said, Mike, you exactly nailed it on the head. Because when I think about, you know what you just said, like one plus one is three, if you’re doing this right, and you’re having the right investment in the community, your yield is going to be greater. I mean, there’s there’s a lot of research already out there that talks about $1, well invested in the Latino community and what your yield is, right? If that index is higher, because you’re reaching the community with relevancy, culturally competent, and you’re, you’re you know, you’re reaching the community in the right way with the right message, your yield will be better than you can see, traditionally speaking, in general market communities. So one plus one really does equal three, which that’s the incentive, that’s the mutual component, you’re talking about the incentive to do is do it right is it is going to yield better results. And again, not that it’s all about that, but you’re super-serving the community, the right topics in the right way with the right product, they’re receiving and responding to that in a way that gives you one to two times index over what you can do with a traditional dollar spent in a nonethic. 

Valdes-Fauli, 9:18 

And the research actually bears that out for two big reasons. It’s, it’s cheaper, frankly, if you’re going to spend money through the chief marketing officer, and you’re looking at how you divide your, your limited budget, it’s often the lower cost of entry to market to the Hispanic. And statistically, we are more brand loyal if we feel like you’ve done a good job of engaging us with respect. So if it’s lower cost and a higher stickiness with the consumer in terms of brand loyalty, that’s a recipe for success. 

Vergara, 9:44 

And more socially networked, I would add as well, right? So we tend to have stronger social networks, and even living situations are generally, you know, more multi-generational or multifamily. So when we have a great experience, or the exponential voice that we have, is there. 

Armas, 10:06

Yeah. And the research proves that out to, you know, and that and I think it’s interesting, if you really look, we did some socio-economic research on that a few years ago, where I shouldn’t call us economics and social science research a few years ago to try and understand like, why this sort of word of mouth because we all know it, right? We know Latinos are more social online, we know, there’s a lot more dialoguing and sharing of best practices and behaviors and but we want to understand well, why is that? Why would this one community and we see it another epic communities as well, but why would it be like, why is there so much more, you know, social yelping, if you will. And then Then there is another, we really wanted to sort of crack that open. And rather than taking you through the whole white paper, the high points are that it’s really a function of how the Latino community grew up in the United States, our experience in the US, and I think, you know, my family, think of any of us who are, if you’re first-generation or second, you think back to how your family sort of came up the structures that were in place to some support, minorities, or even, you know, English second language communities, or like nonexistent in the 60s and the 50s. They were just sort of on your own right. And so as a result of that, the community banded together and began to share and network, how do we get you know, what does the education services look like? What a financial services look like, which is why, you know, I’m so glad we’re having this conversation. How do you buy a home? How does this work, and the community recognized early on that the best resource was there not because we didn’t dress outside resources, they’re just really weren’t any. So as a result, there’s this really we see it also with the African American community for different reasons. But this close knit this is a function of how the community has grown and, you know, was planted and grown in the United States sort of on its own and resourcing within each other, that has now become a massive networking resource and opportunity for brands if you can get in there in the right way, you know, the Latino community will socialize your message. But I think what’s interesting is to understand sort of why that came to be 

Vergara, 12:07 

Objective to the word of caution though, because we saw this in the recession. So after the recession in the mid-2000s, we got out of the housing crash, and we saw that communities of color, especially Latino and the African American segment by segment saw a tremendous loss of wealth. And what came out of that from many had the mistaken thought Look, you know, these folks were risky. They’re riskier than the general market, when in fact, it was because segments like the Hispanic segment went next segment, believed so much in believes so much in homeownership, that that’s where all of their investment went versus like a 401k, or some other diversified plans. And so it’s actually the belief in homeownership that led to those, you know, unfortunately, that that downward spiral of, of net wealth, and I and I worry also next year, too, when people are looking at their spend if they see a downward turn, but that’s because a COVID. And what happened because a COVID was was exasperated in minority silence, because of what we’re talking about, kind of that close-knit those networks and the extended families together. So I just a word of caution, because you have to understand those numbers and the dynamics, and how that might impact. And what you see at the surface may not necessarily tell the whole story. 

Calderon, 13:51 

Yeah. And Stacy, you mentioned, you know, some of that sort of social networking and how that came to be for the Latino community. And you alluded to that there are some similarities, but for different reasons for the black community, we could just talk a little bit about that, because these are, these are two important segments, but for different reasons within the US in terms of future growth potential, and within financial services, and the sort of positive effect that it can have on household wealth, which Maria just mentioned. 

Armas, 14:22 

So for the black community, it’s actually the root reason is similar, which is trust, right? But the circumstances surrounding the need to pull in around trust are different. So for the Latino community, it was lack of resources, it was lack of access, there were language barriers, there were other reasons that brought the community in and develop these really interesting networks. And if you, we’ve looked at these sort of networking maps, and how information is transferred, like all of this really cool, narrow data. And it’s really interesting how that, you know, almost the best information. It’s not like a game of telephone, it’s like the best possible game where the best information is what’s transferring and being used. And we’re actually subsequently growing more businesses that serve Latinos in that space, because they are super-serving in the black community. For as I said, the root reason similar was trust to the community had, understandingly, a and still the understandingly a, you know, some trust barriers outside of the black community. And so those same networks pulled together and you know, resourced around, you know, based on trust, who do we trust, that can share information that can we can leverage we can learn, we can grow, we can figure out how do we start a business? How do we educate our kids? How do we understand the financial system? How can we use it to our advantage under with our, you know, particular circumstances, so it was really trust that brought it all in still really digitally savvy among the top with the Latino community and the Asian community, we see it a lot with minority communities. And I would say, we’re not talking specifically around it today, but for the Asian community very similarly, around language and trust and really wanting to resource from the community’s best experiences. So that’s what we’ve seen in our like, neuro social networking research, which is was really cool, I love at the end of it, what you get out of it, oh, is it’s you know, it’s community. And it’s, and we’re coming together for community, which sounds like a, you know, one bullet point out of a big piece of research. But understanding all of those pathways really helps us understand why today, we say off the cuff, you know, Latinos use social network networking more and, and word of mouth is very, you know, prolific. But we want to understand why it’s, it’s because of the, you know, the way the communities have arisen in the States and the lack of structure and support earlier on. 

Calderon, 16:48 

That’s great. Thanks. And I mean, so I’m curious, you know, some might say, if we’re talking, you know, if we’re talking exclusively about the black and Latino communities, and the need for, you know, more culturally competent outreach, like, what’s all the fuss about? Because this is really only 31% of the population. Why is this such a big deal? So, like, how would you respond to that, Mike? Sure. Sure. 

Valdes-Fauli, 17:12 

Sure. Sure, I’d have a strong response in my guess. But yeah, look, how can let’s just take the Latino alone, which I agree, if you added up to 31%, my points are even greater, but we are almost, you know, we’re just over 80% of the population. So how can you ignore 1/5 of the most powerful economy in the world, just us Hispanic is bigger than all of Colombia, all of Argentina, all of Spain. It’s the second-largest Spanish-speaking country in the world. Similarly, the economy, the GDP of us Hispanic would be the eighth-largest country in the world, it would be like saying, we’re gonna ignore Brazil, which is number nine, by the way. So you know, it’s quite remarkable if a company thinks that they can, you know, sort of avoid this. And that goes, for every company, it used to be that Procter and Gamble and McDonald’s, and Coca Cola got it, but maybe not financial services. Again, one in five of America will need any product or service. And I think companies are thankfully starting to get it. You know, hiring hopefully, some experts like some of those on this call, hiring internal sort of Centers of Excellence to help guide their approach with that nuance I was talking about, and giving back to the community, again, in ways of shared value you saw, you know, just this week, sort of coalition of banks announcing that for black and brown audiences, for communities of color, they’re going to be rolling out a lot of options, even for those that are unbanked you can open a credit card without checking your credit. They’re getting creative in ways to not only help themselves, but hopefully rise the community up along with them. 

Vergara, 18:44 

I’d add to aside from what Mike just pointed out in the numbers that the demographics the meaning behind it, in our industry, in mortgages and housing. This is where the growth is coming from. There’s a recent, I believe it was the Harvard center for joint housing studies. And the minority segments are the only segments that are growing in particular Latino segment is propelling and driving the household formation while the white market actually is going down. So this is where the consumers are. So you know, yeah, I would, it’s just mind-boggling. Any company that wouldn’t put resources towards it. But we have to be very intentional there. Because there’s like, less than believe it was 13% of the housing industry is diverse. And so that’s a huge gap between the future of that household formations and who’s actually serving those potential customers. 

Armas, 19:59 

Yeah, and I, I’m sorry, please go ahead. Yeah, no, no, go ahead. Go ahead. Oh, you know, I don’t think too, that it’s, or I think it’s important to understand I don’t think that they’re necessarily ignoring or not wanting to invest in this segment. I think they just don’t know how, you know, because when we talk about the Latino community, we’re talking about a large community. But the truth is, as you know, Mike, and both you real brought up, there are segments within this community that need our attention in different ways, via different platforms, right. I mean, when you’re thinking of older Latinos, 55 Plus, I think there, there’s such a need to really understand the community in a way that the brands that are currently working to do this in financial services, or otherwise, can’t quite get their heads around how to do this, you know, as an example, when we think of Latinos 55 Plus, one of the examples I used to make, and it still rings true, is that Latinos, 55 plus are nothing like non-Hispanic white 55 Plus, complete polar opposites, right? If you’re a Latino 55 Plus, your kids are gone, and they’re in college, like they’re out of the home. But generally speaking, when you look at the data, if you’re white, non-Hispanic, and you’re 55, plus, your kids probably may even be in high school, still at your home, you know, your experience is totally different. But what that means for Financial Services is you have this availability of, of income that is not available in the same way in white non-Hispanic households, right, you have these lifestyle curves that come at different points, that also means that home purchases come at different points, because family home formation, as you talked about, come at different points. And sometimes it’s reverse of traditional. So sometimes you’ll first see, you’ll see, you know, children, then maybe marriage, then education, then home purchase the orders could be all different, but really needing to understand those segments. And so that’s why I feel like a lot of the investment isn’t being made, I feel like the story is there that there is value, and, and, and a great return on investment. But it’s a lack of understanding of the nuances of the community that are what are holding brands back which product at which life stage, you know, how are we going to organize that and then which medium is it, you know, is are we going to think about you know, to all digital placement and think about who our ad servers are serving to for 55 Plus, versus that, you know, a different type of placement for our younger adults that have different financial needs. Everyone’s talking about wealth building. I feel like the marketplace is confused which is why you really need an organized agency who is thoughtful and very well versed in bringing forward all of these strategies 

Calderon, 22:43 

Yeah that now I mean, I hear you both talk me about data and just building off of what Maria said. Urban Institute released a study that just noted that between 2020 and 2040 70% of all homeownership growth is going to come from the Latino community. So we’re talking about, to Mike’s point, a segment of the population is just 18% of the population driving the lion’s share of homeownership growth in the country for the foreseeable future. And, you know, certainly most efforts that we’ve seen in the financial services segment are, I would say, superficial at best in terms of how to reach out to this population. And they tend to involve translating a website into Spanish, or, you know, doing something for Cinco de Mayo. And, no, you know, why I think that’s your point, Stacy, that probably comes from a place of lack of information or know-how, I wonder what advice we can give to companies that really want to line up, you know, meeting their corporate values, which are, you know, well-intended values with the market opportunity in that way. So, Mike, I wonder if you can share a little bit about like, how can companies do that correctly?  

Valdes-Fauli, 24:04 

Sure. And thankfully, we’ve had a lot of experience in this space, as you know, we’re working with Realogy. But also with envoy mortgage, so kind of on both sides of that equation, we’re helping them target Latino audiences. And you know, I think a lot of the same kind of trends and rules apply that you want to do your homework and communicate with good intent and respect. But some unique ones due to a lot of companies are fearful that if they get the message in the marketing, right, but their infrastructure isn’t ready, is that going to be an unfair dynamic, so you get the inbound interest. But if you don’t have a call center, a Spanish language website, or trained, you know, real estate professionals that are able to communicate in Spanish, are you doing a disservice to the market? My opinion is, you know, in the United States, in particular, almost any acculturation level has learned to navigate on some way in English. So you can’t open a bank account in Spanish, you cannot go into a Bank of America, even in East Los Angeles, or Chicago or in you, at some point, you got to fill out paperwork in English in this country. And maybe it’s your son or the neighbor or someone that helps you. But I still believe that engaging them in an emotionally resonant way that respects their unique values and culture, and communicating. And here’s a big important part, communicating candidly that they may need some English language support along the way I have, you know, all the faith in the world that that’s an ethical approach, that it in fact, is complimentary of the Hispanic community. And it’s a way to at least dip your toe before you start to revamp your entire infrastructure. 

Vergara, 25:25 

I couldn’t agree more with what Mike just said, and I think that a lot of the folks that are on this call listening to us, especially those in lending, mortgage lending, will say, well, there’s something called the DEP, the uniform, deceptive, something practices, basically, what I’ve heard a lot of lenders say, their worry is that if they do something or start something in language, then per that regulation, everything they’re they’re in has to fall in that language, and they’re not prepared to do so. And what Mike just said, he don’t have to do that. Don’t let that prevent you from dipping your toe in the water, you can do things that are in English, that are culturally very attuned, and are speaking without using a word of Spanish to the Latino market. An example of how that’s possible is kind of just the lens that you look at things through. So in the American culture, we often say what’s good for me is therefore good for my family. And that’s, that’s wonderful. Nothing is wrong with that. That difference in the different lens with the Latino segment, is what’s good for my family is then good for me. And so a very subtle change. It’s still the same, right? It’s still kind of means the same, but how you’re communicating that sentiment is different with that different point of view.

Armas, 27:08 

 Absolutely, and that’s ,you know, collectivist culture nature of it, which is interesting, right? People often think about, well over time, collectivist cultures are you know, the longer that you’re here in the US that’s sort of going to dissipate. But the reason it doesn’t is the reason I shared earlier, which was the really tightness of the community as a result of the community’s growth in the United States. So that really keeps this collectivist Culture Center whereas you said, what’s good for you know, my family is good for me. It’s really more about the community and those sorts of nuances in in things like just creative treatments, you know, and I know Mike can probably speak to this a lot better than I could, but there’s nuances and I’m not talking about, you know, we’ve all seen the work that’s been done by some amazing brands, during for example, like Halloween and there’s the, you know, a friend that kind of like in the corner, you’re like, Oh, look, there’s a Latino touch over there. Like I’m feeling good. It’s not that kind of nuance. I’m not talking about sort of that. And that is, by the way, a grayed out if English when I’m talking about loved seeing it. But then again, that’s also not across all cultures. I’m Cuban. And so that’s, you know, it’s a little different. But there are other nuances that are shared across all of the countries of origin, such as, you know, this sense of family. And I think we say that kind of off the cuff, and everyone thinks they know it. But that kind of nuance coming through and creative really does take an experts and an expert understanding of the community to… 

Calderon, 28:39 

Yeah, Mike, I really want to jump in there a little bit. 

Valdes-Fauli, 28:42 

No, I mean, I think there’s definitely a creative. You know, part of the challenge and if you’re in an ad agency is if you’re just targeting angles, you need to do two really hard things, you need to do extremely creative, kind of innovative out of the box work. And it needs to move product and actually work from a sales perspective. If you’re a Hispanic advertising agency, you have one more thing. Now you have to do it for a sub-niche that is hypersensitive, that everybody’s kind of judging whether it was a condescending stereotype, or whether it was just tapping into a true a truism and insight. So it’s a challenge. But therein lies the fun. And I think the brands that get it work really hard to make sure they’ve done their homework, but then they hopefully give a little bit of leeway to do some interesting work. Because if it’s cookie cutter to avoid all risk, it’s probably not going to have much success either. So you know, some of our clients, whether tiny kin, or T Mobile allows us to kind of flex our muscles because I think they trust, we are Hispanic, I’m a quarter Mexican and half Cuban. So if it’s gonna offend, we’ll probably have someone in our ranks that’s gotten offended. So we’re not, it’s not guesswork. And I think that that’s part of the approach that they should take. 

Armas, 29:51 

And then perhaps one of – we should address too is, you know, we’re to I think even I’ve said several times, well, you know, talk to your agency, or, but perhaps you don’t necessarily have those resources, depending on you know, who I know, we have a lot of financial services online, and those resources certainly exist. But for others, there are a lot of places where there are, there’s resources available to better understand the community, not the least of which is doing your own research and census, which I know using that pomes data is a nightmare. But there’s lots of wonderful YouTube videos to help you out with, but also Nielsen has available, we do have a lot of data available on just understanding basic information about the community, in fact, we just released and I’m going to look for it in just a second. So I can I can share it. But we just released a report on the financial services industry and sentiments around. So there are you know, there’s certainly a lot of work being done by religion by folks right here on this call and folks within your network. But there’s also a lot of data out there as well that you can, you know, if you don’t have resources, or if you really just need some great Sunday reading, you know, this is the place where you can grab some, some context, get comfortable with some of the language and the nuances we’re talking about understand the marketplace, and then perhaps have that next level dialogue with either your agency or you know, take the information that you have an extent but there there are a lot of resources out there perhaps the best thing, one of the things we can do is is figure out how to toolkit this data, right? How do we toolkit or resource in an easier way for people to access and do some of their own learning? You know, not because we don’t need the services of experts in the space because we absolutely do. But we all want to make sure that we have you know, at least a baseline level understanding of diverse communities and their needs. 

Vergara, 31:34 

There’s a lot of information out there the other very underutilized source of information or er, G’s or employee resource groups. Most companies have them. And you know, they’re usually underfunded or don’t have a budget. They’re looking for content, they’re looking to be more business resource groups, and not just swapping recipes, monthly. So they would be a great resource as well to take in a product development idea. Maybe using them as a focus group, just you know, a sounding board for strategy. There’s lots of great Intel in the companies, you know themselves. 

Calderon, 32:22 

But Marie, I want to go back to something that you mentioned earlier, that has to do with both the growth in the market specific to, you know, certainly housing and financial services, but the low no single and low double-digit representation of Individuals who actually reflect the consumer within, you know, financial services, certainly that’s the case within real estate. And I wonder if you can offer some advice on what companies can do to find the people that they know, that are reflective of the community that they want to serve. Because, you know, we’ve certainly all heard from our various points of familiarity, that it’s difficult for companies to find the communities find people, the communities that they’re trying to serve, but like we are out there, and so like, what can they do to be able to actually, you know, recruit and source talent that’s reflective of this growing, you know, these different growing segments. 

Vergara, 32:24 

Yeah, so they’re the talent is out there, but it’s not as easily to find, because we are the diverse segments is only now getting into, you know, financial services. So, so, generationally, we’re going to have, this won’t be a problem for long because of the demographics and how it’s changing. But it wasn’t an industry that we grew up in a lot of folks who come into the industry before us, did so because their relatives, their family members, their mom, dad, DS, uncles, whoever were in that, and that’s how they broke in. So we did have that, that background. So we have to be very deliberate. And sometimes we don’t even know, the things that we’re doing that are preventing us from sourcing that. So we might have, there might be a favorite college that that institution goes to year over year for sourcing, and you know, they’re not gonna, they may not have likelihood, they don’t have a high representation of diverse segments. So you’d have to be very purposeful, where you’re looking how you’re looking. Maybe the, maybe the recruiting strategy has to be more inclusive of more people making that decision in, you know, in the, in the household for that person. So it’s, um, it’s a very deliberate plan, just, I often think of professional sports, where they have scouts that go out and scour the, you know, schools and get get in early in front of the of the students. And that’s what’s needed here. There’s no shortcut to it. I do want to say Fannie Mae has a program called future housing leaders that was created a couple of years ago to do just this and diversify the market. And we do this free of charge. It’s because we understand that this is an important need. And we connect companies with diverse with diverse candidates for internships and hires, but you have to be very, very deliberate in finding that talent. 

Calderon, 35:38 

I love the sports analogy, I don’t think I’ve heard anyone actually reference, like scouting the right talent in our new industries can get great. 

Varmas, 35:48 

But that investment will yield you, you know, a better return, right? I mean, that’s kind of like what Mike and I were talking about this a little bit different. But that investment gives you a better return, I think back to when I first started my career, before I was in advertising I worked at a bank. And I was far too young to be doing. I mean, I was I was very, I was maybe 19, or something. And as a result of my speaking Spanish, I was tasked with things that were way outside of my, what I should have been doing, I was doing new loan docs and all sorts of things. That only because I could speak to the community. And so but that’s, you know, this is again, this is many, many, many years ago, but this to your point is like, we have amazing people now, you know, our we always have but I mean, our community has is advancing on education, like no other group, we are building wealth within our community, we are, you know, just really on that trajectory. So finding this talent shouldn’t be very difficult. The opportunity, I think, is really going to be in attracting this talent. Because our our Latino young people today who are well educated, understand their value if they are bicultural, you know, and bilingual. And so it really is going to be an investment on the part of financial institutions to realize recognize what that be as even talking about right to x, and then really investing in those young people, not only to carry them through which I think the Fannie Mae program is amazing, but ensuring that we, you know, resource them properly, that we pay them properly and recognize the value that they bring. I once I saw something on Instagram a few days ago about bravery and it says you know what real bravery is. It’s being willing to, it’s not just knowing to language, but it’s being willing to do your job and not your primary one. And I thought that’s, that’s a really Have a really great, you know, a really strong quote. So I think we are looking at people however, were their primary languages are both English and Spanish, they deserve to be compensated for that, for that skill and talent. 

Valdes-Fauli, 37:51 

I would just add one word, a lot of the discussion here has been how big companies can either help or benefit from Latinos. But I think we’re missing that there’s a booming small business sector of Latino-owned enterprises that, frankly, don’t need the help, and they’re there. They’re crushing it, and growing incredibly quickly, without sort of the larges of a JP Morgan when they make an announcement. And I think those people are entirely Hispanic in many cases. And it’s, it’s, you know, I think, pre COVID, and hopefully, post was growing at a much faster rate than the Anglo general market. And so I think it’s not just about sort of top-down, but it’s also bottom-up. 

Calderon, 38:33 

Yeah, well, and for those businesses in particular, I mean, while they don’t want to, you know, maybe want to migrate themselves as workers into somebody else’s firm, you know, the outreach that they do need is to be able to help capitalize their business. And so, you know, certainly there’s, there’s, you know, some work to be done, in terms of being the right resource for businesses that want capital to be able to grow their enterprise. So, great, great comments, you know, from I wonder if we can go kind of back to data segmentation, because I think in financial services in particular, here, there’s, there’s certainly, there’s a strong history of, of analyzing data that is, other than the demographic component, purely for like the ROI purposes, but not necessarily looking at consumer type and sort of hyper segmentation based on geography, and how to change your outreach based on that kind of data. So CCA know that you guys have done a lot in the way of looking at data differently, to be able to understand how to better target consumers and and to reach them with with right messaging, I wonder if you could talk a little bit about just about looking at data differently, and maybe some lessons for, for industry on what they might do. 

Armas, 40:04 

So the two things that I can think of if we’re really talking about like looking at data truly differently, and this is a little more advanced, but I’m looking at psychosocial components, and like doing some real neuroscience research, because I feel like there are other components that aren’t as simple as just demographic cuts, even when you go down to country of origin, you really need to understand, you know, behaviors, and the, like, the psychosocial components of those behaviors. Like when you think about investment, there’s a really, there’s an absolutely different perspective from Cubans, then there would be, you know, from Puerto Ricans like there. And there really is, and I’m not just saying it’s as simple as country of origin, because it isn’t, but what it really there is there are a lot of components behind straight demographics that can help influence you know, how people might engage with different products. So when I think about how we’re looking at data, we’re we Nielsen are really trying to go beyond standard demographic and geographic cuts, because it just doesn’t tell us enough of what we need to know about any distinct community group. So I think that that’s probably the, you know, the most important piece that I would offer is and you and sometimes it’s not even necessarily around the the the individuals country of origin but geographically So as an example, we know in and around Minneapolis, St. Paul, there’s a really large, black community, Somali, black, generally speaking, right, that’s a very different experience. While there are there are shared experiences among the, you know, the black American experience that is shared across the country that a lot of you know, the community have shared that they have a very specific American experience being black in America. But there are other influences because that community is largely Somali that how would have a different influence or impact on their relationship with financial services in the US I also think our financial services industry has a lot of work to do with the Latino community in particular as a result of the dialogue you know, and, and all of the very public dialogue in the past several years span several years, but the very public dialogue about you know, issues around the community and financial services and how the community was served. I feel like there’s a lot of catching up there that needs to be done. And that in and of its I almost feel like that so Have a precursor right before we start going in and immediately trying to figure out how to be super service community that is going to be growing, they’re going to be the fastest, you know, growing. And when it comes to home purchasing, there’s sort of is this other component that we’re not talking a lot about, but I feel like is, is very present. 

Calderon, 42:55 

But kind of goes back to that trust factor that you talked about earlier about building trust, or in this case, building back trust. And Maria, I know that you’ve had a lot of conversations with, you know, certainly in your prior role with institutions about how to do that. And I wonder if you can talk a little bit about the kind of activities that would need to take place in general within the financial services industry to be able to build that trust? 

43:27 

Sorry, I hit the wrong button there. Um, yeah. So. So there’s, we mentioned a few of them before, family, being family and friends being a source of information. So how you collect the information or how it’s disseminated. So social media, versus maybe an old school of, you know, the workshops where you’re going someplace to listen to someone speak, which is very difficult if you have, you know, a family to take care of, or if you’re working multiple jobs, and you can’t get to that, you know, at the time that they’re, they’re offering it. And then influencers and those influencers or centers of influence can be community organizations, it can be churches, or, or even trade organizations like what we have in in financial services that we have, you know, minority trade organizations like North Korea now read all those build trust. So again, it goes back to that communal and collective and gathering information from people closest to you. 

Calderon, 44:40 

Mike, I know you guys have done a lot of work with influencers as well, though different than? 

Valdes-Fauli, 44:47 

Yeah, I mean, I think it’s become, for better or worse, the most prevalent tool in the marketing toolbox these days. And I think for us, it’s not if but how, you know, you can, you can either just lose money by partnering in the wrong way and not generate ROI. And worse, you could put your reputation at risk, if you partner with someone that you know, is kind of a loose cannon on their social media, and might say something the day before the day after your partnership activates. So getting it right is important, but if you get it right, I think it’s it’s huge. It’s sort of the borrowed credibility of someone that has a beloved and engaged large audience. And they’re sort of lending you that for a day or two or a tweet or two. And, but it’s important, I think our playbook is usually it’s got to be someone that is aligned with the brand that feels organic and authentic. The toughest part is reconciling, you know, you want the brand’s message to come across, but you don’t want it to feel like an ad for the influencer. So that you know, you get a lot of eyeballs from their audience. So that kind of bridge is where the fun part and the challenge comes in. But if you can get that right, I think it can establish your brand as sort of a part of the conversation not talking to, but having a dialogue with the whole community. 

Calderon, 46:01 

It’s great. So we do have a question from one of the audience members from Fran Barnum. And Fran is asking about putting out materials in diverse languages. And so France question is when we talk to our local banks, about their CRA obligations, does that excuse them from marketing to diverse communities in their own language? Because of that you comment that you mentioned earlier, Maria? 

Vergara, 46:32 

So I’m not quite sure I understand the question. Can you rephrase that for me, Marissa?  

Calderon, 46:37 

Yes, so if banks are wanting to avoid translating materials, at is, yeah.  How does it come to their care obligations? 

Vergara, 46:48 

The UDF doesn’t prevent doing things in language, you can do things, you can start something in language that’s not product-specific. That’s educational in nature. You can have a footnote on the material that says, you know that other connection points will be in English, there are ways you can address it that way. However, I do want to say I think we all mentioned it, but may be worth stressing. With regard to the Latino, the Latin x community, the largest set growth segment is native-born, Hispanics, meaning that we were born here and still identify as Latin next, but can go, you know, in English or Spanish. And so it’s not the language, it’s, it’s not the language ability, it’s how you’re speaking to us and where you’re speaking to us. And so that’s where, you know, if you’re finding that if you can’t get that message through to whomever it is in your organization, then maybe having a third party come in, like a space or like a mic to help make those connection points a little bit more clear. But, um, so that’s my, my answer is one of you, that doesn’t prevent you from doing something, there are ways of working around that. And then to, it’s not always done in language. 

Armas, 48:21 

It sounds like an educational opportunity, right? I mean, if they’re not knowing, and they’re, you know, just thinking of, of all of the liability or risk and so that therefore not doing it, that would carry forward beyond just materials that would carry forward to ads dialogues, social media dialogue, in language, like, it just sort of feels like perhaps there’s a, an educational opportunity there for the industry on what you can do, I often find that in my work, and really, certainly even I’m sure we all lately, you know, faces in our work, where there’s a whole lot of what we can’t do, is a lot. And I almost want to start meetings and say, Okay, so we’re all clear on what we cannot do. So now let’s figure out what we can do. That’s what we’re here to talk about. And I feel like, you know, perhaps that’s an opportunity for the industry is to do more advocating on around how we get over those hurdles, so that you can have this authentic, authentic, authentic dialogue, in language and even fluid in multiple languages and in English and Spanish in different spaces. without the fear is a really good question that fan brought forward because for me, it’s outside of my area of expertise. But as an outsider absorbing this, I can feel even from what you said Maria, like, the genuine, you know, sort of concern around the risk here, and it feels like an opportunity to, to have some clarity. 

Valdes-Fauli, 49:44 

I totally agree for what it’s worth. And I think specific to the Do you need to translate everything, I’m honestly positive, you don’t, you just have to jump through a ton of hoops to get it right, ethically, as well as legally, those hoops include, you know, just the disclaimer and the sort of transparent you will need an English speaker to help. And maybe taking it a little bit further than all or nothing, you don’t have to translate every single page and legal ease of your website, but having some kind of landing page that explains in a pretty simple way what they’re going to get. So there’s a confluence of factors you need to get right. But I think the intent of starting is where it’s all caught where it’s at, I think it’s important to you, at least at the top.  

Calderon, 50:28 

That’s great. So we’ve got a few minutes left to wrap up. And I’d love to just get some kind of like parting words of wisdom from each of you. And I wonder, Maria, if we can start with you. So if you had to kind of issue a takeaway or two for folks, what would that be? And then and then we’ll go next to Mike and then Stacie. 

Vergara, 50:51 

Okay, um, I would say, you know, it’s not different, the diverse segments, the approach and the strategy isn’t different than the general market. And it’s funny, because it’s maybe that sounds too simple. But I think when we start talking about that a lot of people either are like deer in headlights, Frozen, like, I don’t know what to do. Well just do how you would normally do it, but with a different lens. But you know, it starts with, with research, you’re the market that you’re trying to connect with. Do you have the right people? Do you have the right products? Do you have the right promotion? Do you have the right pricing? It’s, it doesn’t have to be that difficult. The difficult part is getting the right team in place. So that whatever you don’t know, can be covered by someone who is on that team that’s culturally competent. 

Valdes-Fauli, 51:48 

I guess my final word is a bit of a pivot. But you know, one of my biggest frustrations is when a brand says, Well, why do I need to do this? This is the markets gonna assimilate, everyone’s gonna be speaking English. Every other immigrant group that came before is no longer a sub-segment we need to target. And there’s just some fundamental reasons why that will never happen, in my humble opinion. The first is geography. If you were at the turn of the previous century, crossing the Atlantic from Ireland, or Poland, or Russia or Italy, that’s a pretty different dynamic than you abutting Central America and Mexico and being right next to your country of origin. Secondly, there’s, you know, technology, so you’re talking to your family in that language on WhatsApp all day long. That was also not the case for any other immigrant population. And third would be the media landscape. You’ve got ODBC on Telemundo. Through these, these are feeding you in Spanish in culture, what you want your sports all day in the United States. And so that’s going to create a stickiness where even second, third, fourth generation, eventually, Latinos I think are going to be more inextricably tied to their culture than previous immigrant groups that came before. 

Armas, 53:00 

And, and others may have covered it sufficiently. So the only thing I guess I would add is, you know, let’s not let fear drive what we can and cannot do, but rather let opportunity drive it right. And that sounds like I read it out of a like one of those calendars, and I didn’t. But you know, I, that’s so easy to say it’s easier said than done. But if you’re in this industry, your goal and your goal is, and I’m sure it is for all of us, we want to of course, we want to serve the clients well. But we also want to continue to see this industry grow. Going back to the very first comments of this session, if you take a look at the community, and just how the US is the demography of the US is this is shifting is it’s you know, revolutionising what America looks like, it just makes perfect sense. You know, yes, we’re gonna, we’re talking about segment marketing. And we’re talking about diverse communities and outreach. But even if you back up from that, and say, Where is my next, you know, great success, where is my next big client base coming from? It’s no surprise that it would be the black or Hispanic community as the largest, you know, Hispanic community, specifically, as the largest growing, the Asian American is the fastest growing, and the black community, certainly, you know, a significant community with 14% population as well, it only makes sense to shift some of those dollars, especially when you look at life cycle curves, and you take a look at where, you know, the total market or where non Hispanic whites are today, a lot of those big investments and those purchases, and those, those financial engagements have taken place. And so if you’re looking at your next great consumer, and your next, you know, your next big leap, it’s going to be this community group. So looking for that opportunity, and, you know, understanding exactly what that opportunity is and getting your feet wet or trying to advance in the space. 

Calderon, 54:52 

Thank you. I want to thank you all, for all of your comments, really great dialogue. I know that our conversation today has mostly centered around the Latino community, in some sense, some of the nuances with the black community. We, before we call it a day, and we wrap up, we did just get one last question that came in. And I’d love to be able to address it. And Maria, since you’re in the financial services industry, I wouldn’t I wonder if you wouldn’t mind taking this question for us. That there’s the Biden ministration recently issued a rule to prohibit banks from discriminating against LGBTQ plus people. So I wonder if you can just talk a little bit about financial services and what the industry is doing to improve engagement with an outreach to like this specific segment of the US population? 

 Vergara, 55:49 

Wow, that’s, I? That’s a great question. I don’t know about this specific Biden ruling that you’re you’re talking about, but I did mention the minority trades that have been around for a while. And also, there are trade groups for the for gay community as well. And, you know, within the banking industry and housing industry, it is regulated, heavily regulated against discriminatory practices. But I fear though, that it’s more, you know, those over practices, and we have to be very cognizant, and, and observant of our colleagues that things aren’t happening in a disparate way as well. So though, I’m glad to hear of that ruling. And that any type of discrimination is illegal. But I would also just be cautious that in financial services in any industry that we need to not be complacent by just the letter of the law but spirit of it too. 

Calderon, 57:04 

Great. Yeah, if I want to thank you all again, love the dialog, love the focus on, on really doing things, you know, in language based on preference versus proficiency, like what Mike talked about, and really highlighting the market segment opportunity both to benefit the community but also from an economic perspective for the country. So thank you all so much, and appreciate your comments and I look forward to just being involved with you and other different ways as things move on throughout the year. 

Valdes-Fauli, 57:37 

It was a pleasure. All right. 

Calderon, 57:40 

Thank you everyone for joining

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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