“Who inspires you?” is a question often asked of key executives – particularly those whose remit is to reshape corporate norms and recommit corporate resources to support them. For Brian Lamb, J.P. Morgan’s global head of diversity, equity and inclusion, it is his father.
“If I reflect back on my family, my father was a schoolteacher his whole life. And I watched him basically become a public servant. I’ve been inspired by him to make a difference,” Lamb told Karen Webster.
That difference is exemplified by the $30 billion commitment known as “Path Forward” that J.P. Morgan made last year to help advance economic opportunities for underserved communities. Lamb told Webster that the initiatives at present – centered on homeownership, credit, financial inclusion and workforce diversity – are focused on the Black and Latinx communities, and will span the next five years.
Some of the metrics include keeping 100,000 housing units affordable in underserved communities, originating 40,000 additional home purchase loans for Black and Latinx households, and helping those same communities spark lower mortgage payments through refinancing.
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“These are clear priorities that really ladder into our purpose, which is to help employees, customers, clients and communities to grow and thrive without leaving anyone behind,” Lamb said, adding that “there’s no quick fix.”
Though the headlines trumpet the economic rebound, the dip in unemployment, and the stores and venues that are reopening, the rising tide has not lifted everyone – not by a long shot. According to Lamb, the pandemic has ravaged vulnerable populations and has helped shine a light on some of the more glaring inequalities that are firmly entrenched in American life – including in the U.S. economy.
Lamb said that dedicated efforts – including measurable metrics (with advanced technologies in the mix) – can guide financial institutions (FIs) in bringing everything from checking accounts to homeownership to underserved communities, improving financial inclusion and societies at large.
In part, that means J.P. Morgan must re-examine its own internal operations and find new ways to gauge inclusion – where employees are not just representative of different demographics. As Lamb noted, there are ways to measure inclusion itself, even ways to use predictive analytics within the firm to understand employee sentiment and determine whether they are happy in their roles.
Other programs involve getting policymakers at the state and federal levels to consider legislation that could help accelerate the investments J.P. Morgan is targeting (especially surrounding reinvestment in the communities and homeownership). The company is also challenging its Fortune 500-level suppliers to make changes to their own racial equity practices. J.P. Morgan itself has committed to spending $750 million with Black and Latinx suppliers over the next few years.
Against that backdrop, Lamb said of J.P. Morgan, “we are focused on being purposeful.”
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Advancing Racial Equity – And The Multiplier Effect
Lamb said that it’s imperative to improve homeownership in the U.S., where the gap between white families and families of color is wider than it’s been since the 1960s. J.P. Morgan has been hiring loan advisors to serve those communities.
The result of an increased presence in those areas – both in terms of dollars spent by J.P. Morgan and a physical presence – is a multiplier effect, said Lamb, where public-private partnerships can restore the local financial pillars of minority communities, particularly for banks.
Of Black and Latinx banks, in particular, he said, “we’ve seen a lot of deterioration here and over the years, where we’ve lost a lot of those institutions that are serving these very communities that have been left behind.”
Designing investments into those minority-owned and -focused banks, he said, could create a multiplier of as much as 10x for every $10 million invested. Those banks can use the capital to tailor their own services and products, partnering with local companies to help them grow and to hire more workers.
With a nod to the unbanked and underbanked population, Lamb said, “there is clearly pent-up demand around providing low-cost and convenient solutions to banking, either through digital means or in local markets.”
Within those markets, J.P. Morgan has committed to helping one million people open low-cost savings and checking accounts. Lamb pointed to secured banking products that might act as springboards to greater financial inclusion and could help users build credit.
“Many of the families, individuals, small businesses and consumers also need help making sound financial decisions,” he said, which has led the company to set a goal to hire 150 community managers. Making sweeping changes, complete with multiplier effects requires an intentional focus on where a firm can make a difference, said Lamb.
According to Lamb, a financial institution should make a difference by doing what it does best: increasing access to capital and homeownership, and creating more entrepreneurs who can build businesses and create jobs.
As he told Webster: “There are things we are built to do, with a long-term view that the next generation should be better off and have opportunities that those who came before them did not have.”
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