Unconscious bias at the bank

Banks seem like large, well-regulated systems—well-oiled machines designed to keep our money safe and in circulation. And, well, for the most part, that’s exactly what they are. But like every human facet of this world, the banks rely on the contributions of individual human beings. And each person at the bank brings with them their entire personal history and worldview. Their hopes and dreams, insights and biases, all of it right there at the teller window.

Especially in a diverse, multiracial country like Canada, the effects of those biases can be far reaching. Our media and education system create a sense that white people are at the centre of our country’s history and day-to-day life. In such an environment, unconscious bias can easily come into play. And those unconscious biases are making it harder for Indigenous people and Black Canadians to attain financial balance.

In this article, we’re taking a look at how unconscious bias acts as a discriminatory force in Canadian banks. First, let’s start with the term itself.

What is unconscious bias?

Unconscious bias is, simply put, when a person unknowingly believes in a stereotype about a group of people. It happens when a person has limited exposure to people who are different from them in their personal lives and in media representation.

If, for example, you grew up being told that women are naturally better at math than men, and every math teacher you ever had was a woman, and you never saw a man do any math on television or in the movies, you would end up believing this narrative was true. How it translates to your daily life then, is you’d likely trust your friend Kayla to do a better job of calculating the tip at brunch than your friend Jared.

Banking staff, like tellers, advisors and lenders may not knowingly believe in racial or gendered stereotypes. But if they grew up (like Canadians do) in a culture that normalizes whiteness, then they are constantly exposed to that worldview. It’s not just the education Canadians receive, or the media we’re exposed to. Growing up as a member of a dominant group can lead to believing, without realizing it, that white people are better with money, more trustworthy, easier to talk to, and so on. And those beliefs often constitute an unconscious bias in our banking system, one that seriously affects the ability of BIPOC Canadians to build wealth and gain equity in our society.

"Unconscious bias is, simply put, when a person unknowingly believes in a stereotype about a group of people."

What does unconscious bias look like?

At one level, unconscious bias can be hard to assess given that it’s, well, unconscious. But at another it’s easy to see how unconscious biases can lead to overt acts of discrimination.

Here’s one very public example:

In December 2019, Maxwell Johnson, a Vancouver-based Indigenous man in his 50s tried to open a bank account for his 12-year-old granddaughter. He’d been with his bank for five years. In an interview with APTN news, Johnson described how the teller asked him for ID, and he presented his Federal Indian Status Card, a form of government issued identification. The teller handling his request refused to accept the document as ID and began asking more and more questions. What should have been a run of the mill interaction quickly escalated, and she ended up calling the police—an overreaction that in effect painted Johnson as a criminal element when he just wanted to help his grandkid open a chequing account.

Interactions between Canadian police services and Indigenous folks are often fraught, as part of a long standing colonial bias on the part of settler Canadians. (Here’s a good Toronto Star article about the anti-Indigenous history of Canada’s first police force, the RCMP, if you’re interested!) Both Johnson and his sixth-grader granddaughter were led away in handcuffs. The teller rightfully assumed the police would share some of the same biases as she does—she knew that her story would be believed over his, because of the way anti-Indigenous racism is built into Canadian life.

As news of the interaction spread, many folks on social media called the bank out for allowing the teller’s unconscious bias to create a dangerous situation for Johnson. An investigation into Johnson’s treatment at the bank is ongoing.

Johnson’s case is a very well documented and public example of a racialized customer facing unconscious bias at the bank. But very few instances of unconscious bias working against racialized Canadians get so much media play, even if they happen regularly.

A quieter example comes from Alain Babineau, an advisor at the Center for Research-Action on Race Relations (CRARR) and retired RCMP officer in Montreal.

Last autumn, Babineau tried to replace his debit card at the bank he’s been with for 25 years. But the process was far from simple. When I spoke to him on the phone, he described a sense of discomfort from the moment he walked up to the teller’s window. There was no smile, no welcoming or greeting. He says he provided her with everything she asked for―proof of ID and proof of address, but she pressed him with pointed questions. “Every time I gave her an answer, she would ask more questions and more questions,” says Babineau. He began to suspect that the white teller thought a Black man in his 50s didn’t fit the classically Quebecois name on his account.

Babineau supplied his apartment lease as additional proof of address, but the teller still wasn’t satisfied. She called her supervisor, who then called the manager who said they wouldn’t accept his various proofs and IDs. Deeply frustrated at that point, Babineau left without a new debit card.

“I was a cop for 30 years,” he says, “I understand the need to do security checks. I get that. But at some point, when someone keeps providing you with answers as evidence, you have to realize this person is legit.” A few days later, he called up the branch and told the customer service representative what happened. They set him up with a meeting with the branch manager. When Babineau arrived, the manager had a new debit card already made for him ready to be picked up. She checked his ID, they spoke briefly about what happened, he got the new card, and left.

When racial profiling happens in a commercial area like a store or bank, BIPOC customers are frequently treated with a lack of respect, and often seen as a security risk. The criminalization of racialized customers at the bank by leaning on racial stereotypes creates a system where Black, Indigenous and other people of colour have a harder time just, y’know, doing normal things, like replacing their debit cards.

Babineau is an advisor on racial profiling at CRARR, and to help people who have been discriminated against, knew how he wanted to take action. He decided to file a human rights complaint against his bank with the Canadian Human Rights Commission over the racial profiling incident at the bank. “I tell people to go forward for discrimination...I can’t tell people to do something that I’m not going to do myself,” he says. The complaint is still being processed.

"When racial profiling happens in a commercial area like a store or bank, BIPOC customers are frequently treated with a lack of respect, and often seen as a security risk."

How common is racial profiling in Canadian banks?

What happened to Johnson and to Babineau are just two instances of the many occasions where unconscious and systemic bias against Black and Indigenous people have created discriminatory practices.

While few instances end up in the news, racial profiling is an everyday occurrence that affects Black and Indigenous people’s ability to do completely normal things, like sign up for a chequing account, make banking deposits or run their businesses. (Here’s a great CBC radio doc with more examples and details.)

Fo Neimi, who co-founded CRARR (where Babineau advises) in 1983, says the centre helps a lot of people specifically with banking-related racism. When I spoke with Neimi on the phone, he explained that a base level of heightened scrutiny towards a person of colour is a very common form of unconscious bias at the bank.

These levels of scrutiny can manifest in big dramatic scenarios, as with the 2014 arrest of Haitian-Canadian Frantz St. Fleur after he tried to make a $9,000 deposit, and the teller assumed, without any real evidence, that such a large sum must be fraudulent. (The cheque was a return on a deposit he placed after a condo sale fell through.)

In that situation, as with Babineau and Johnson, the individual bank employee exercised their own judgement in how to assess the situation. That leeway is where the unconscious bias of an individual teller or loan advisor might lead to discrimination against BIPOC customers at the bank. “Usually, there’s a pattern,” Neimi says, of BIPOC customers facing a lack of “equal access to commercial services, or even respectful treatment after they request for a product or service.”

The big picture effects of unconscious bias at banks

In her 2016 study of racial and gender discrimination in loan lenders, sociologist Sarah K. Harkness found that the lenders who evaluate borrowers show evidence of unconscious biases informed by cultural stereotypes. Lenders are steered toward granting loans to members of certain cultural groups over others, even when the individuals involved have near identical credit scores and financial histories. The results of her study showed clearly that lender’s personal beliefs and biases ultimately affect their funding decisions. The effects of such systemic biases inform a person’s whole life. In the short term, BIPOC customers are unduly stressed out every time they go to the bank, waiting to experience micro and macro aggressions. In the long term, being denied a mortgage or loan, and access to credit, leads to a serious wealth gap over generations.

Andria Barrett, who is the president of the Chamber of Black Commerce in Canada, says she’s heard of countless stories where Black business owners have trouble accessing their own money from their bank accounts, or are denied loans despite meeting the qualification criteria.

I spoke with Charline Grant, who has one such story of the effects of bias in the banking sector on her life. In 2018, Grant had a brilliant idea to create a basketball training facility in her Toronto neighborhood. She went to her bank to apply for the Canada Small Business Financing Loan, a federally backed lending product where 90% of the risk is essentially guaranteed by the government. Despite seeming to fulfil all of the criteria, Grant was denied the loan.

Grant, who has since opened the facility, thinks there was a stark cultural misunderstanding between her and the bank. Because of Canadian white normativity, the specific agents at the bank were unable to see her vision and join her in taking on the risk. “If I'm from Italy, and I open up a piazza, and I have an Italian person looking at my loan, they'll understand my vision. If nobody in your underwriting understands the Black community or whatever it is that we're trying to do, they won't see the vision. It’s a risk,” Grant told me.

There may have been any number of reasons Grant’s loan was denied, but part of the insidiousness of unconscious bias is precisely this sense of ambiguity. In a recent interview with the CBC, Grant said she’s decided to create a podcast called Banking While Black to give Black Canadians a forum to document and discuss the effects of racial profiling.

What her story, and many like it, makes clear, is that lending decisions are made by individual gatekeepers, and discussing race is generally taboo. While a teller or a lender might not think of themselves as acting on racial stereotypes, there is no clear way to assess if they are making decisions rooted in sound risk-management or unconscious bias.

There is a problem where many BIPOC bank customers are not receiving the same treatment and opportunities as white Canadians. As Barret says, “there are too many anecdotal stories that lead us to believe that we as a community are treated differently and don't have the same access to capital.”

"Lenders are steered toward granting loans to members of certain cultural groups over others, even when the individuals involved have near identical credit scores and financial histories."

What is being done about unconscious bias in the banking sector?

In the aftermath of the mass movements Black Lives Matter orchestrated in 2020, many banks have articulated plans for diversifying their companies. It’s a good start, but doesn’t fix the in-branch bigotry many Black and Indigenous folks face in their everyday banking experiences.

A huge part in rooting out unconscious bias at banks requires putting strong safeguards in place to hold bank employees accountable. Without this, we leave marginalized groups in Canada at an inevitable disadvantage.

Niemi suggests that the solution will involve an integrated approach to customer service — one that puts an equal emphasis on diversifying staff and having clear standards for service and product delivery. Diversifying the hiring pool is just one step, but there needs to be an overhaul in the way customer service works too. Tellers, lenders, and advisors should be well trained in avoiding unconscious bias in their work, and the criteria for service need to be completely transparent.

Beyond that, there has to be senior executives who oversee that these issues at their banks are being taken seriously. They need to take responsibility for the unfair treatment of BIPOC bank customers and be empowered to be accountable for making changes. Because without being able to provide consistent, bias-checked service, the values of diversity and fair treatment won’t be translated into a tangible reality.

Neha Chollangi is a freelance writer. Previously she was the visual editor at the Ryerson Review of Journalism. Follow her on twitter @nehachll.