Banking industry's failure to increase diversity in management will be costly

According to banking and finance industry officials’ testimony before a congressional oversight panel, banks and other financial institutions have made very little progress in increasing workforce diversity over the last ten years. This disturbing news comes despite the fact that these institutions have had dedicated workplace diversity programs in place for more than a decade.
Industry officials also speculate that the percentage of women and minorities in high level positions in banking and finance has probably been exaggerated. Based on reporting data from financial institutions between 1993 and 2004, a CEO of a bank in the Fortune 500 would be lumped in the same category with an assistant manager of a small bank branch in Raton, New Mexico, badly skewing the data, albeit in favor of increased workplace diversity.
When the industry makes their 2007 reports to the Equal Employment Opportunity Commission, however, they are required to report senior-level officials and managers separately from mid-level officials and managers. This change should present a more accurate (and more bleak) picture of the actual status of workplace diversity in the banking and finance industry.
The General Accounting Office, the investigative arm of Congress, studied workplace diversity in financial institutions between 1993 and 2004, (it updated its report in 2006). The overall number of minorities in management-level positions grew a paltry 4.4 percent over that period.
This figure is particularly surprising to me, given the fact that all banks are required to provide credit, including home ownership opportunities to underserved populations (other financial institutions are not) and commercial loans to small businesses—comprised mostly of minorities— under the Community Reinvestment Act. And though banks did fare mildly better than other financial institutions in their diversity efforts, they still fell short of where they should be.
If I had to guess, I would say that most of the workplace diversity programs within the banking and finance industry (much like those of many industries) are flawed. We already know that the number of diverse individuals in high-level positions has likely been exaggerated, so it wouldn’t exactly be surprising if their workplace diversity programs were flawed as well.
The reason I say this is because I truly believe that talent not only exists naturally, but it can also be developed. While there are those banking whiz kids who skyrocket to the top naturally, I am convinced that any banking and finance industry company can develop equally effective talent that can be the shining stars of this hypercompetitive industry. Anybody remember Trading Places?
Now I don’t purport to use an Eddie Murphy classic to back up my theory, but I know that businesses as a whole are not doing enough to increase workforce diversity. Why should this industry be any different?
The long and short of things is that if any company invests time and energy into developing a diversity candidate, it will pay off tenfold in the long run. A bank that is willing to get involved and invest in developing its diversity employees will likely find that they have not only developed a highly effective minority manager, but they have also developed a loyal manager who is much more likely to stick around.
The bank that fails to develop workforce diversity in management will suffer the consequences in the long run. Most companies, and particularly those in the banking and finance industry, should already know that diversity in management is a source of global competitive advantage. The bank that decides not to develop their diversity employees so as to prepare them for management level positions will discover their mistake as they begin to pay the financial price of their poor decision in terms of lost opportunities and painfully slow growth in culturally diverse markets.