02/03/2014 12:53 pm ET Updated Apr 05, 2014

How the Banking Industry Can Help Combat Economic Inequality

A few days ago President Obama presented his annual State of the Union address where he reiterated that access to opportunity should be determined by work, ambition, and goals -- not by the circumstances of your birth. Growing income inequality continues to weaken the American middle class and stagnant wages, low wage jobs replacing those with livable wages and fewer government investments compromise the ideals that make this country strong.

President Obama charged us all to do our part to ensure more Americans find the economic security they deserve. And according to our recently released Opportunity and Diversity Report Card: Consumer Banking Industry, the financial sector is positioned to do precisely that.

But what remains to be seen is if these opportunities will be accessible in a way that's both equitable and fair not only strengthening the economy; but particularly communities of color -- a group that continues to be left behind in this economic recovery.

By 2020, over a million jobs will be added to the financial sector with many of these skilled positions being in financial planning, analysis, and management. And with minority college and MBA graduates on the steady rise, right now the banking has an opportunity to leverage talent that has historically been underrepresented.

Studies spanning over two decades suggest the financial sector has been extraordinarily slow to integrate. While semi-skilled positions (e.g., teller or clerk) have become diverse, these positions are also disappearing as they become more automated.

The future of the banking workforce will demand more complex functions and these positions remain firmly dominated by white men.

The lack of diversity in the upper echelons of the financial sector is not due to the lack of qualified people of color, but hiring practices. In 1993, 13 percent of black workers attained a college degree; but occupied only 1 percent of the financial sector's management positions. By 2011, over 22 percent of black workers held college degrees but the number of people of color in management positions only increased to 2 percent.

Similar challenges exist in the integration of the banks' supplier pools. Supplier diversity is a critical measure of an industry's commitment to equitable inclusion and opportunity. And though minority businesses are on the rise, the fact that only 1.6 percent of the supplier budget was the most any bank spent on African American suppliers and 5.3 percent was the most any bank spent on firms owned by people of color is disappointing.

Minority business owners may lack the resources to solicit business from global firms because they are less able to offer the economy of scale that larger competitors can; but these barriers are surmountable. Banks can ensure the billions spent on suppliers are also targeting minority-owned businesses by breaking down contracts to smaller scale projects.

These along with other strategies to improve banks' diversity and inclusion efforts are highlighted in the report. But, most importantly, the industry must develop achievable and explicit goal based timelines for achieving diversity outcomes. And the release of our report is actually a precursor to a part of the Dodd-Frank law that will require banks to move in this direction by requiring federally mandated assessments of their diversity in the workforce and supplier pools in the future.

The banking industry is at a crossroads. It can allow diversity in banking to languish as it has for the past several decades or it can do its part and make steps to affecting measurable changes. It is my hope that it choses the later. So that when President Obama calls on all of us, including the private sector, to step up and ensure equal opportunity is available to all; the banking industry is prepared to answer.

Dedrick Asante-Muhammad is the Sr. Director of the NAACP Economic Department and the Executive Director of the Financial Freedom Center

Jason Richardson is the Fair Lending Specialist for the NAACP Economic Department