It’s no secret that banking and finance industries are male-dominated.
Like we’ve said before, only 38% of staff and only 20% of executives are women.
What’s strange and contradictory is that women are enrolling in college more than men, according to Pew Research data, and now account for 47 percent of the total U.S. labor force, as reported by the United States Department of Labor.
So what gives?
There’s no shortage of talk on how to bridge the gender gap. The problem is widely acknowledged, the benefits of a balanced workforce are recognized, the origins of the issue are being debated, and solutions are even being hypothesized.
Still, it’s slow moving to progress.
To paint the picture of the state of women in banking, we’re drilling it down for you with statistics and quotes that sum up where we stand and how the industry may move forward.
Gender equality in banking isn’t just a “nice to have.” Companies are leaving money on the table.
- Numerous studies have proven that diversity is good for business — including one 2015 report that found that female CEOs in the Fortune 1000 drive 3 times the returns of S&P 500 enterprises predominantly run by men.
- $12 trillion could be added to global GDP by 2025 through advancing women’s equality, according to the McKinsey Global Institute.
- Gender parity provides the industry access to the full talent pool, and leadership is just better when it’s balanced. Businesses make better decisions, have better financial performance, lower staff turnover, and stronger long-term strategies. This balanced equation translates into higher profits.
Sergio P. Ermotti, Group CEO at UBS, gets how important this is:
Diversity is not just about doing the right thing – but about attracting and retaining the best talent. We must also reflect the diversity of our clients. A diverse clientele expects diversity in its service providers, someone they can relate to and who understands them.
If women are good for business, why don’t more organizations make better use of this powerful resource?
- Organizations continue to treat gender parity like corporate responsibility. Bloomberg’s Gender Equality Index found that 85% of companies surveyed have a chief diversity officer or an equivalent role. While this is a worthy initiative. it demonstrates a view that diversity is something to be managed instead of creating cultural change that leads to an organization-wide shift.
- Well-intentioned organizations have not found the right recipe for advancing women and the right way of combining the various ingredients, such as flexible working arrangements, sponsorship, and cultural change.
- Research reveals that one of the barriers in achieving an increase in women staff at all levels was the belief that women get married and leave and therefore women leave more often than men. Because of this belief, many managers, even if unconsciously, preferred not to hire women. This unconscious bias unfortunately occurs amongst female managers as well.
Still, too few organizations are pursuing diversity for the sake of improving business performance. Katherine Grantham, Balance Network at HSBC, points out that:
Many appear to be doing diversity as a box-ticking exercise — this will not turn the dial.
So what’s the real issue here?
For women to advance to leadership roles, they need to see what that looks like. When asked why she thinks finance is dominated by men, Moola founder, Gemma Godfrey said,
It’s a self-perpetuating scenario where the lack of women has put off more women from rising through the ranks. But a successful business needs a balance of skills. Diversity of age, gender and background is required to represent customer needs, challenge the business strategy and deliver tailored solutions.
The way to solve the problem is to initiate a virtuous circle of diverse role models and mentors showing how it can be done and shifting the balance.
But the up-and-coming currently don’t have role models and mentors to initiate this cycle. The real solution is summed up by Harvard Business Review:
Most financial firms are genuinely committed to improving gender balance among their senior executives…and have introduced a number of “women-friendly” programs, such as flexible hours, parental leave, and mentorship schemes. Helpful as they are, such measures do not fully address the problem, which also lies in the unconscious biases, expectations, and practices of organizational cultures….Getting middle and senior management to recognize their biases is the most important first step toward reforming the corporate culture that disadvantages women.
It’s not all doom and gloom.
While the numbers don’t lie, and women are missing in important roles in the financial services industry, the good news is that we’ve really tapped into the heart of the problems thanks to so much hard work done by consultancies and women’s advocacy groups.
In today’s world, you can’t have it all. Sacrifices have to be made by both men and women who are building their careers. That said, as organizations work on cultural norms, unconscious biases, transparent and equal pay, it’s an exciting time to be a woman in banking. Especially as a pioneer, an advocate, and a leader.
Ready to unleash the potential of your business? Contact us, and let’s talk about what we can do to help.