In the corporate sector, language around diversity has shifted in recent months. Gravity Research found that companies have begun reducing references to DEI in their public-facing communications and corporate filings. Meanwhile in financial services, “big banks are shying away from more public mentions of their diversity and inclusion initiatives,” according to Banking Dive. Whether you call it diversity, inclusion, belonging, representation, or just community, the corporate framing may be shifting, but the important work to make sure financial institutions reflect their communities continues. The renaissance of branch banking and the demand for personalization make this representation even more imperative today.
The data reveals the story – and the need. An FDIC National Survey of Unbanked and Underbanked Households found that over 18% of households either have no bank or primarily use money orders, cash-checking, and other non-bank financial services. Moreover, Black, Hispanic, Native American, and other minority groups are twice as likely to be unbanked as white Americans. The ranks of the underbanked reflect a similar disparity. The FDIC survey found that winning these customers will require not only offering targeted banking solutions but garnering community trust at the same time. That’s where community banks and credit unions are leveraging their deep roots and trusted relationships for an outsized impact.
Community financial institutions have an opportunity in today’s landscape to reach consumers who have been traditionally underserved – by making banking more accessible and having bankers who represent their communities. Trust comes, in part, from community, and people want to do business with people who can understand their lives. Community banks built around serving local families and local businesses have more flexibility to make lending decisions that reflect the on-the-ground realities of their communities. Credit unions can often offer better rates, both on checking and savings and on mortgages and auto loans. Even more, having bankers who know and are from their communities adds up to the type of genuine representation that builds trust and generates business value.
Community financial institutions traditionally offer customers a banking home and not just a business proposition. Whether it’s a community bank with a local focus or a credit union serving its members, both financial models are based on a foundation of building meaningful community connections with people who know their neighborhoods best. Representation matters. The question isn’t whether an organization is using diversity-coded language, it’s whether they’re walking the walk in their overall approach and business practices. Everything from branding elements like signage and merchandising to interactions with branch staff can signal that everyone is welcome here and valued for who they are.
The numbers bear out this winning approach. Minority depository institutions (MDIs) and community development financial institutions (CDFIs) are growing in size and strength. One reason: mission-focused investment funds, which are putting money into supporting diversity in the banking sector, help support the expansion of banking in communities that have long faced barriers to financial services. In late 2025, the Mission Driven Bank Fund announced that it had raised nearly $200 million to support FDIC-insured financial institutions serving low- and moderate-income African American, Native American, Asian, Hispanic, and Pacific Islander populations. Over one-third of that capital has already been distributed.
JD Power’s US Credit Union Satisfaction Survey, meanwhile, found that “credit unions outperform their retail bank counterparts across all dimensions measured in the study, including trust, people, and problem resolution.” Programs like Juntos Avanzamos, which recognizes credit unions that serve Hispanic and immigrant communities with bilingual support, culturally relevant services, and financial education, help to explain why diverse communities find homes in these institutions. The benefits to this approach extend beyond goodwill and community impact. The National Credit Union Administration reported that total assets in federally insured credit unions rose 5.4% to a total of $2.43 trillion while adding 2.4 million new members in 2025.
Community banks, meanwhile, are gaining strength by focusing on people – including employees. If a bank’s promise is that it knows the neighborhood, the team serving the local population needs to also know and be a part of the community. One example of a bank putting those principles into practice: Olympia Federal Savings, which was awarded one of the Best Community Banks to Work For 2025 by Independent Banker. “With nine locations and just over $1 billion in assets, the 119-year-old institution has earned a reputation for putting people first – whether it’s the customers it serves, the colleagues who power its operations, or the neighbors it supports across the South Puget Sound region,” according to the publication.
While credit unions and community banks are doing a good job of creating frontline representation, the entire banking industry still has work to do in building a more diverse pipeline to the C-Suite. According to ABA Banking Journal, only 7.5% of CEO roles in financial institutions are held by women. And a survey by Pearl Meyer found that only 4% of executive and senior-level positions are held by minorities. “If we don’t have leadership teams that reflect our communities, we’re not able to access markets effectively,” says Jenn Docherty, CEO of Bank On Women. “You’ve got to have different voices in the room in order to think differently.”
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