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Sibos 2025: DEI at a Crossroads

Author:  Sybille Mueller, Director, Streets Consulting  

From Balance Sheet to Bottom Line: Why Inclusion is DEI’s Missing Link

The conversation around Diversity, Equity, and Inclusion (DEI) has hit a global crossroads, marked by political tension and corporate reinvention. During a recent Sibos 2025 panel, hosted by Laurie McAughtry, Head of Capital Markets at Euromoney, experts didn’t just rehash the backlash; they revealed a crucial shift in strategy: moving beyond diversity as a headcount and focusing on inclusion as a direct driver for growth.

The Global Divide

The panel highlighted a stark divergence in how companies are navigating DEI. Following political headwinds in the U.S. that challenged DEI initiatives, many American firms were forced to dismantle programs. Yet, this wasn’t the only response. Other U.S. firms chose to reinvent their approach, fostering a “grassroots effort” driven by Employee Resource Groups (ERGs) to build a more inclusive culture from the ground up.

However, the global response wasn’t uniform. Many European and Asian companies held their ground. One Japanese bank, for example, immediately sent a global message reinforcing its commitment to its DEI agenda. While “cosmetic changes” were made to program titles in the Americas, the funding, commitment, and core mission remained intact.

Inclusion: The 'Cash Flow' of Your Company

The most powerful argument from the panel was a simple financial analogy:

  • Diversity is your ‘balance sheet’. It shows who you have right now – a static snapshot.
  • Inclusion is your ‘cash flow.’ It’s the day-to-day experience that either increases or decreases the value of your people.

This isn’t just theory. The panel noted that companies lose 20-30% of their net profits annually from poor people management, primarily through unwanted employee turnover. The solution isn’t just hiring more diverse candidates; it’s fixing the “leaky bucket”. By improving inclusion, you boost retention, which naturally leads to greater diversity and higher profitability. It reframes the goal from a social mandate to a core business imperative.

Putting Inclusion into Practice

So, how are financial institutions building inclusive cultures?

  • Rethinking merit: Practically, this involves tactics like ensuring diverse slates of candidates and interviewers to actively control the unconscious biases that can influence hiring decisions. The panel firmly rejected the false narrative that DEI conflicts with meritocracy. Instead, true meritocracy is about removing bias to allow the best ideas and people to rise. One key concept was evaluating a candidate’s “distance travelled,” recognising the grit and resilience it took for some individuals to get to the same place as others. 
  • Measuring ‘how’ you work: One Japanese bank’s performance reviews are now split 50/50. Half is based on what an employee achieves (financials, risk), and the other half is based on how they achieve it, with a major emphasis on rewarding cross-divisional collaboration. This approach is part of a wider cultural commitment supported by a dedicated Culture Committee and a philosophy of Kaizen – or continuous small improvements to drive tangible, enterprise-wide change.
  • Building new talent pipelines: Companies are moving beyond elite universities to focus on social mobility programs and early-career academies. This means outreach at the school level to build financial literacy and create pathways into the industry for a wider range of talent.
  • Embracing generational diversity: With AI poised to eliminate many entry-level roles, leaders must actively manage generational inclusion to ensure that wisdom from experienced employees isn’t lost and younger generations are still developed.

A Call to Action to Leadership Teams

The message was clear: stop treating diversity as a ‘checkbox exercise’ and start treating your people as your most valuable financial asset.

  1. Educate leadership: Train leaders to recognise their own unconscious biases so they can build teams where people feel safe to speak up and foster a “culture of challenge” that actively welcomes diverse perspectives to improve decision-making.
  2. Redefine merit: In your next hiring or promotion cycle, look beyond the resumé. Consider the “distance travelled” and the resilience a candidate has shown.
  3. Reward collaboration: Revamp performance metrics to explicitly reward employees for how they work with others, not just what they deliver.
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