Looking Forward to the Next Normal
Blend’s commitment to building an equitable ecosystem, Pt. 1
By Ulysses Smith, Head of Diversity, Inclusion, & Belonging at Blend
At the Tech Inclusion Global Summit earlier this year, we never could have imagined that the state of the country would change so dramatically in just a month. Leaders and decision makers were already trying to figure out how to adapt our strategies, policies, and practices amidst the pandemic. But the traumatic events of police brutality targeting the Black community that followed brought us to our knees. There is no returning to business as usual or what we once thought was normal. Now is the time to create a new normal.
The cry for change that is reverberating across the country is one that companies simply cannot ignore or treat as another story in the short-lived news cycle. It’s now the responsibility of leaders and organizations alike to do some introspection, focusing on driving structural change and building equitable systems to eliminate racial inequality.
To demonstrate one potential path forward, in this series we’ll outline the initiatives Blend is undertaking on the regulatory engagement front and with our product to address racial disparities in consumer banking. You’ll hear from my colleagues here at Blend about our efforts, including advocating for alternatives to the traditional underwriting practices and leveraging our technology to reach underbanked populations.
Blend sits in the middle of the financial services industry; our roots are in mortgage, but we have expanded to support a broad array of lending and banking products. Our customers are primarily banks, credit unions, and other financial institutions. Founded in the wake of the 2008 financial crisis to digitize the mortgage process and create an accessible consumer banking ecosystem, we’ve worked in partnership with financial institutions over the past eight years to make this a reality. As the country confronts years of racial injustice, we feel an obligation to shift our focus to some of the fundamental causes of inequity in our industry.
Blend’s commitment to building an equitable ecosystem
As is well documented, access to financial services and opportunities for transferable wealth continue to be limited in the United States due to a long history of racism and structurally discriminatory policies. In order to eliminate these persistent barriers and mitigate residual effects, we must take a comprehensive approach that leverages both our buying power and agency as a company and our deep connections with the communities we serve. Our Equitable Ecosystem Initiative (EEI) is our vehicle to drive change through community partnerships, technology investments, and regulatory engagement.
Community-based programs and partnerships
For too long, many companies’ corporate social responsibility efforts, while well-intentioned, have largely focused on treating the symptoms instead of the root causes of inequity, resulting in communities still being left behind. Our goal is to address long-standing structural issues while partnering with communities to ensure that people have the agency to determine what is best for them.
We are exploring ways we can invest Blend operating funds into community development financial institutions (CDFIs) and minority depository institutions (MDIs) in order to provide additional opportunity for these organizations to fund critical initiatives and lend to customers in their communities on their own balance sheets.
Additionally, we will continue working with existing community partners to bolster secondary and adult financial literacy programs as well as homeownership preparedness initiatives to eliminate the gap in homeownership in communities of color.
Technology and systemic investments
We have already seen a few ways in which fintech can mitigate some of the disparities that exist in financial services, but we also know that technology can share the biases of its developers and perpetuate some of the very inequities we seek to correct. To realize the potential of the former and mitigate the latter, we will look at how we can provide our platform to MDIs and CDFIs.
We will work closely with our partners to invest in technology to power alternative data underwriting. Blend’s verified data ecosystem, including the ability for consumers to give lenders permission to access their data, can help lenders gain a fuller understanding of consumers’ creditworthiness and open up access to underrepresented home buyers.
We support reimagining traditional underwriting practices, and we will continue to work with our customers, partners, policymakers, and other industry stakeholders to encourage broader adoption of these improved practices.
Policy changes and regulatory engagement
Many discriminatory practices are deeply embedded, sometimes unintentionally, in some of our most sacred institutions in the United States. For this reason, we are increasing our regulatory engagement efforts and shifting focus to legislation that eliminates some of these policies. Specifically, we support congressional actions that provide funding to MDIs and CDFIs for technology upgrades, build a verified data ecosystem in support of alternative data underwriting, fight predatory lending practices, and undo a long history of redlining and housing discrimination. We are also joining the Global Innovators Community, a consortium of global financial institutions and fintechs led by the World Economic Forum, to address this issue.
Toward collective action
Moving forward, we are internally deepening our understanding of the various ways the financial system has caused disparate impact or excluded Black people and underrepresented minorities. The knowledge and insights that we gain will inform our product decisions and continue to drive us toward creating an accessible and equitable consumer banking ecosystem.
Our efforts alone are not enough and certainly cannot be constrained to financial services. We implore other companies to review their business practices and respective industries through a new lens of equity and focus on driving change. Structural and institutional changes require sustained engagement in both product creation and the legislative process. The challenge before us is great, but far from insurmountable.
We’re excited to partner with Blend again at Tech Inclusion 2020: The Next Wave of Leadership! Join us October 13–15 for a virtual experience and a global discussion about the changes happening in the tech industry and what actions are needed today.
This year we’ll strategize how we can create equity in the tech industry, how Venture Capital and entrepreneurship ecosystems are evolving to become more inclusive, and the impact of the stories we consume and share in the media. We’ll explore ways to build more ethical and accessible products and services, improve mental health and wellness, and use tech to drive civic engagement and combat voter suppression. We’ll look at the present and the future of work, how COVID-19 has impacted the industry, and what the industry can contribute to the fight to save lives. We’ll have sessions on what empathetic leaders must do to promote inclusion, allyship, and anti-racism across global teams. And if you’re looking for a job, or you’re a company looking to hire: we’ve got you. Our Tech Inclusion Career Fair is going virtual too!
This has been a year. Let’s talk about it, let’s work to heal from it, and let’s focus on the solutions needed to move forward.
About Change Catalyst
Change Catalyst empowers diverse, inclusive, and sustainable tech innovation — through events, consulting, research, and training. Our Tech Inclusion programs explore and develop innovative solutions to tech diversity and inclusion.
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