When former President Donald Trump issued an executive order banning transgender people from serving in the military in 2017, Eastern Bank in Boston wanted to do something about it.
The $17 billion-asset Eastern, which has a long history of supporting LGBTQ causes, initially hit on the idea of putting up billboards declaring its support for transgender service members — perhaps even finding a transgender veteran willing to be photographed for the spot. But after talking with both LGBTQ and veteran employees, the bank decided to move in another direction, said Paul Alexander, its chief marketing officer.
“That could be dangerous for that individual. All of a sudden, this person’s picture is up there, 20 feet by 15 feet for all the world to see,” he said. “You have to be careful that in your eagerness to be supportive, you’re not hurtful.”
Instead, Eastern went with white text on a blue background reading “Good salutes all who serve our country. All,” with “All” shaded in the pastel pink, blue and white — representing the transgender pride flag. The slogan was meant to fit with the bank’s long-running “join us for good” campaign.
Eastern Bank’s billboard effort is a good study for banks that want to support their LGBTQ neighbors, customers and employees.
There’s a robust business case to be made for greater inclusivity in general, but reaching underserved communities can be tricky. Banks would be well advised to bring in members of the community and give them a say in the decision-making process, though they can also draw on their own expertise and resources in helping to solve some of the financial issues many queer people wrestle with.
The financial services industry has come a long way in the past few decades in its outreach to the LGBTQ community. Many larger banks now have affiliate resource groups for LGBTQ employees and offer medical benefits for same-sex couples, and some even offer transgender-inclusive health care benefits.
Some have even thrown their efforts and dollars into lobbying for public policies aimed at making the world safer for LGBTQ people. Bank of America vocally opposed North Carolina’s so-called bathroom bill in 2016 and encouraged its own employees to talk about the issue. In 2018, Eastern Bank rallied the Massachusetts business community in support of the state’s transgender protection law when it came up for a vote.
But there are still ways that the banking industry could do more. Queer Americans still face structural inequalities in their day-to-day lives, and that very often translates into financial difficulties and higher rates of poverty. With their expertise and resources, bankers are in a unique position to help close that gap. Merely draping bank logos in rainbow colors for the month of June is not enough — in fact, without more substantial efforts behind it, such a gesture could be criticized as woke-washing.
A competitive advantage
Many executives say there is a common-sense rationale for meeting the needs of the LGBTQ community — it’s not about simply doing the right thing.
A little less than 6% of the U.S. population identifies as a member of the LGBTQ community, but their friends and families make up a much larger chunk of the populace. Word-of-mouth can be a powerful marketing tool, and historically overlooked communities can become loyal customers if companies treat them right. If traditional banks won’t do it, then newer entrants to the market will.
“I think we are starting to wake up to the fact that inclusivity is a competitive advantage,” said
It also matters for talent acquisition and retention.
Younger generations, particularly Gen Z, are more accepting of a broader spectrum of gender identity. Not only that, but they possess a wealth of tech savvy that banks will need in their workforces to stay competitive in the marketplace.
Fostering a more inclusive and diverse workforce will be important to attract that talent, said Girish Ganesan, global head of diversity and head of U.S. talent at TD Bank.
“The workforce of the future will be these Zoomers,” Ganesan said. “They are very good at researching an employer before they even start to buy a product from them or work for them.”
Internally, TD Bank provides its employees with forums where they can talk candidly about their experiences being who they are — whether that relates to gender, sexuality, nationality or disability status.
When the COVID-19 pandemic struck, the $401 billion-asset bank moved that content online, which presented both a test and an opportunity. Moving to a virtual forum allowed employees to connect with each other across geographies, but TD executives had to find a way to make that content “borderless” and accessible to a broader range of participants, Ganesan said.
Naomi Mercer, senior vice president of diversity, equity and inclusion for the American Bankers Association, said banks should think about diversity in the broadest sense possible — including people with disabilities, neurodiverse people and veterans.
In addition to other recent workplace improvements, Mercer said some banks are also updating their dress codes to be “appropriate and professional” without discriminating against any particular group. That can include, for example, gender-nonconforming people and Black women, who often experience discrimination because of their hair.
‘Just let people be people’
In some ways, Eastern Bank’s own history shows that it can pay for a bank to be ahead on these issues, but also that bona fides have to be earned over time.
Eastern Bank ramped up its focus on the LGBTQ community in 2011 when it acquired Wainwright Bank and Trust in Boston. Wainwright had begun to cultivate relationships with the local gay and lesbian communities in the early 1990s when its social justice-minded founders brought on Brenda Cole as a board member, making Cole one of the first openly lesbian directors of a public company.
“All we did was make people feel comfortable,” said Jan Miller, who was Wainwright’s CEO. “They could come in as a gay couple and apply for a mortgage as a gay couple. ... There were so many things that today seem so archaic.”
Among its efforts: Wainwright offered benefits to same-sex couples as early as 1994. It advertised in local gay and lesbian papers. When it had around $300 million of assets, Miller said, it launched a credit card that allowed customers to donate 1% of their spending to any of a dozen nonprofits, most of which had a gay or lesbian focus. Over time, it financed more than 80% of housing for people living with HIV and AIDS in the city of Boston through its community development lending business.
“It had to make sense financially in order for us to do it,” Miller said. “We couldn’t afford to do this just because it was the right thing to do, but it was good business. We generated a lot of customers out of that business.”
Wainwright had a little over $1 billion of assets when it was acquired by Eastern, which paid twice Wainwright’s book value in the deal. Analysts also noted Wainwright’s pristine credit quality. Now chief commercial banking officer at Eastern, Miller admitted that at the time, he wondered if Wainwright’s strong social justice brand would be diluted in the merger. But he was pleased to see Eastern pick up the baton and run with it, he said.
“It does seem like a no-brainer today, but just let people be people,” he said. “Let them be their individual selves.”
I think we are starting to wake up to the fact that inclusivity is a competitive advantage.
Banks seeking to make inroads with the LGBTQ community have to be circumspect. Appealing to LGBTQ customers or potential customers requires a different strategy than appealing to, say, football fans — you can’t just wave a rainbow flag and call it a day. Banks need to tailor banking products to the LGBTQ community.
Some have drawn on concrete statistics to make their pitch to LGBTQ customers more appropriate. For instance, queer customers have higher levels of student debt and less financial support from their families. If they want to start a family, adopting or conceiving a child tends to be more expensive for same-sex couples than for a heterosexual couple. Transitioning means higher medical bills. All these expenses can put LGBTQ people behind on saving for retirement — and when that time comes, they may need to retire to an area with a higher cost of living or to a queer-friendly retirement home.
These are just some of the issues Simmons and her co-founder Rob Curtis took on last year when they founded Daylight, a forthcoming challenger bank aimed directly at queer customers. In addition to a checking account, Daylight will offer financial coaching for the financial situations LGBTQ people encounter, as well as a dedicated online community. It’s imperative to bring people from the LGBTQ community into the decision-making process, Simmons said.
“It does so much for brand authenticity, for product authenticity,” she said. “You’re actually empowering parts of the community to help themselves, and you’re also paying them a wage to do it.”
Do no harm
While the financial services industry has progressed in meeting the needs of LGBTQ people, tact is crucial when interacting with any historically marginalized population. This is especially true of transgender and nonbinary people, who can confront added complexities associated with changing their name or pronouns.
Consider the phenomenon of people displaying their pronouns in their email signatures, social media handles or on Zoom. It’s fine to present your own pronouns, and some even say that when cisgender people do so it helps to normalize the practice for trans and nonbinary people. But mandating that everybody do so, even in a somewhat relaxed setting, can backfire.
“If they are transitioning, putting someone on the spot may not be a good idea,” the ABA’s Mercer said. “It’s good to signal that we’re open to learning someone else’s pronouns, but we’re not going to ask.”
Another example: When Simmons, who is trans, updated her legal name, her credit score essentially “split into two.” Or in other words, her credit report sometimes pulls her previous name, often referred to as a “dead” name. That kind of bureaucratic quirk can expose transgender people to housing discrimination if they are applying for an apartment.
And when she applied for a credit card with her new legal name, some of the bank’s correspondence still used her dead name. While some transgender customers might simply find that disrespectful, others could actually be endangered by receiving physical mail showing their dead name, particularly if they aren’t out to their neighbors.
One way that Daylight — which is still in beta mode — handles that is by only requiring the customer’s legal identification during onboarding, Simmons said. It offers customers a debit card in their chosen name and also forgoes the use of names in much of email correspondence, where it isn’t necessarily needed.
“We care deeply about trans and nonbinary people, regardless of whether they’re our customers or not. We want to see this product feature stolen by other incumbents,” Simmons said. “Trans people deserve choice of products and they deserve to have their identities recognized with dignity.”
Making one’s LGBTQ customers and employees feel seen and welcome requires sensitivity and accommodation that banks, or most commercial businesses for that matter, have rarely exhibited in the past. And with customers increasingly aware of and critical of their banks’ values, banks have to give more thought to striking the right tone and sending the right message.
“Many elements of diversity, equity and inclusion are structural, so the solutions also have to be,” Ganesan of TD Bank said. “They can’ just be programmatic, and that includes showing up for Pride but then not doing anything to support the LGBTQ community.”
