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Black bankers on the real problems in the industry

If you're looking for black and ethnic minority bankers in senior positions at investment banks, you'll have to look carefully. They do exist and some have strong voices - as Frederick Baba's incredible letter to Goldman colleagues last week exemplified, but they're hardly populous. At Goldman, just 4% of 'executives, senior officials and managers' are black (up from 2.7% in 2015). At Citi, 2% of black men and zero black women are in this category.

And yet, the proportion of black students who join banks at entry-level is significantly higher, partly thanks to diversity recruitment programmes. In its recent sustainability report, Goldman Sachs said it aims for 11% and 9% of its entry-level analysts and associates in the Americas and Europe to be black respectively. The challenge is keeping them.

Goldman isn't the only bank with problems retaining black staff - the problem is endemic across the industry. "The issue isn't about the bottom of the funnel," says a diversity recruiter for investment banks. "The attrition happens at the move from analyst to associate, from associate to vice president, and as you go from vice president to managing director. Black people are dropping at every level."

We spoke to five black men and women who've worked for leading banks in both the U.S. and the U.K about their experiences. Speaking both candidly and off the record, this is what they said. 

Black people in banking are more welcome in back and middle office roles

When you're black, there's an expectation that you'll work in the middle or back office, said one associate in an investment banking division. "There isn’t enough being done to change the culture and mindset of negatively perceiving the people of colour in front office roles," he added, claiming that banks massage diversity figures by funneling black candidates into less prestigious roles away from the front lines.  

Performance measures in banking are subjective, and depend upon the manager's judgement

This point may not apply in sales and trading where pnl is an objective measurement, but in investment banking juniors complained that their progress is dependent on support from potentially biased line managers. "I had senior colleagues make prejudiced comments about my ability to do certain tasks even before I was staffed on them," says one black African analyst in London. "A lot of black friends are frustrated," says one ex-trader. "It takes them three years to become an associate instead of two, and then they're not promoted to VP." 

"A lot of banks do the right thing about diversity at the start, but as time goes on they stop promoting people and decisions are made behind closed doors by people who are predominantly white males, and then suddenly you find that beyond a certain level almost everyone looks like that," says one VP.

Clients are biased and banks don't push back on that 

One black African analyst says he wasn't staffed on a deal because a client requested a German colleague work on it instead. This was despite the fact that he'd succcesfully worked on the origination stages of the project. "They cited language barrier as the reason I was removed from the execution of the deal," he says.

There aren't enough black people in senior (or even mid-ranking) positions to support others coming through the ranks 

A lack of role models and support from senior black bankers with an understanding of the issues is a huge problem. "There just aren't many of us," says one analyst in IBD. "There's maybe one per team and very, very, very few at VP+. As a consequence it can be harder for us to find people to confide with / discuss issues that affect us personally or professionally, and to find people to speak for us in the rooms that matter."

Several of those we spoke to said this is a particular issue in London, which has a mix of nationalities from all over Europe and the world, and where bankers of a particular nationality tend to promote their countrymen. "I worked on a team where there were a lot of senior Italian bankers," says one. "They always spoke up for the Italian juniors during performance reviews and as a result those juniors had better rankings."

The higher you rise in an organization, the more that race matters

One black VP said the absence of people of similar ethnicity is increasingly problematic once you reach the middle ranks. "Rightly or wrongly, banking is such a brash and intense profession that the higher you go the more vulnerable you are," he says. "You could say it's therefore second nature to surround yourself with people you trust. - And that's often people from your home country." 

If you're a black male in banking you have to work hard not to appear threatening to the white males at the top 

One ex-trader suggested it's harder for black males because they have to work hard to overcome unconscious bias and the notion that they're threatening. He suggested that black women are seen as less threatening to white men in senior positions.

A black female trader said women are defined more by gender than colour. When you're on the trading floor it's the fact that you're a woman among so many men that stands out.

If you're of African-Caribbean ancestry, you may also be financially disadvantaged at the start of your career 

Several of those we spoke to highlighted the need to differentiate between black Africans and people of black Caribbean ancestry. "Most black people in banking are Africans," observed a former trader. "The're very frequently born and raised in Africa and are generally from an affluent/privileged background. Their experience may not chime with the Black Caribbean people from British state schools."

One banker who grew up in Africa and came to school in the UK aged 16 observed that he'd been hired to cover African clients and that this is his niche. "If you're part of an ethnic minority and you grew up in the U.K. outside of a middle class family, you're competing for jobs against people who are likely higher in the British class structure than you and who may look more similar to the clients being covered."

Without family support it can be harder to navigate the politics 

The ex-trader said his family were supportive of him staying in banking (he quit to do something else) but because none of them had navigated the industry themselves, it was hard for them to provide detailed advice. "The first and second years in banking are very tough workwise. If no one in your family can act as a mentor it can be very hard." The same problem exists for white students of lower socioeconomic backgrounds, he points out.

Black bankers have to work harder to get ahead

One mid-ranking banker says that as a junior he had to work harder than others just to achieve recognition, and that senior bankers in his team then blamed him rather than colleagues for issues that were not his fault. "I have a high threshold for working long hours, but I was working 100 hour weeks and I was completely exhausted," he says. "It was the hardest I've worked in my life and it was emotionally draining because I was being unfairly targeted. Usually I will work hard and my work speaks for itself. But in this case I was battling prejudice."

Ultimately, he found a new job elsewhere.

Have a confidential story, tip, or comment you’d like to share? Contact: in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

Photo by Haydn Golden on Unsplash



AUTHORSarah Butcher Global Editor
  • Ro
    Ron SW1
    16 July 2020

    Add commodity trading to the list where the only diversity is in the product range.
    On another note, you should remove one section of the article, or at least build upon it.
    ".....wanted a German, said it was language barrier"
    That is totally normal. Unless,....does this black employee speak German and was still overlooked? That's wrong. But....
    If the guy only spoke English and the clients were all German/Austrian/Swiss, well too bad. Blame English schools for crappy language courses.

  • Th
    The voice
    11 June 2020

    Needless to say, one could very easily substitute women instead of Blacks in every sentence.
    Racism is just an embodiment of the ism problem. The tendency of humans to stick to their clans, to people who talk, act, and behave just as they do,and also to lord itv over others when they can so they can get all the goodies. The sexism part is also about goodies. That s guys wanting to.subjugate women. Put them in a harem, put them behind veils, so they can procreate.
    And the hell with that!

  • Ed
    11 June 2020

    So in your view many people from just one specific colour don’t meet the standards ? One race has a monopoly on not meeting standards ?

  • No
    11 June 2020

    Many 'people' not blacks. This is not an industry that fosters longevity as you yourself may soon find out (presuming that you haven't already and even had a job in the first place.)

  • Ab
    10 June 2020

    As an analyst who has worked in the industry, I can say that this article hits the nail on the head! Especially regarding working harder for less recognition and often not having a voice to back you in important meetings. This is often a function of familiarity bias.

    People tend to recognise good performance of people who resemble them more often as they can tie a closer resemblance to their view of what successful characteristics (personified i.e. mannerisms and physical appearance) in banking looks like. Especially in junior roles where the nature of your work is somewhat homogeneous and not directly tied to PnL like it would be for a VP, making it more subjective and liable to bias.

    It’s almost no ones fault directly as this behaviour is due due to deeply ingrained biases and the ‘status quo’ in banking but it ultimately has a big impact on under-represented groups.

    Good writing!

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