Women are hugely under-represented within all aspects of the financial services industry, including fintech.
According to the International Monetary Fund (IMF), less than 2% of financial institutions’ CEOs are women, and for board members the figure is less than 20% executive.
Why does this matter? Apart from the obvious lack of opportunities for talented women, there are broader implications for business resilience as well as economic policy at national and international level.
A higher proportion of women in senior roles is associated with greater financial resilience, according to the IMF. Furthermore, increasing the number of women in economics can lead to different economic policy decisions, particularly in the male-dominated field of macroeconomics.
Women are typically more supportive of environmental protection and sensitive to social impacts – critical issues the world needs to navigate as businesses and governments attempt to address the economic and social implications of environmental change and drive towards sustainable investment.
From a social perspective, there are also personal benefits to women associated with working in finance that should factor within governments’ education strategies. Greater financial inclusion of women, both in terms of financial education and jobs related to finance, increases potential, confidence and awareness – all of which contribute to protecting individuals and families against hardship.
Why is the financial sector still failing to attract talented women in 2022? Education and perception are two key factors. Over the past 50 years, initiative after initiative has focused on increasing the number of women in the fields of science, technology, engineering and mathematics (STEM). Success has not been linear – and while 15% of UK engineering, 19% of computer studies and 38% of maths graduates are female, just 13% of the overall UK STEM workforce are women, according to jobs website STEM Graduates. Similarly, in Australia, while the percentages are slightly higher, overall female representation in STEM-qualified industries remains less than 30%, according to the government’s STEM Equity Monitor 2021 report. Even those women with the ‘right’ education are not attracted into the force long term.
The issue is not limited to STEM. Women are still the minority in many areas, including business studies and economics, where women make up just 35% of graduates. In the last 20 years, the proportion of women who graduate from economics degrees has remained flat or gone down. Why?
It is hugely disappointing to discover that many women are deterred by a misperception of their own talent. Female students feel less likely to do well in economics and finance and are therefore less likely to select those subjects as university major choices, despite women performing better than well in introductory maths courses. Allied with the recent trend amongst younger people to prefer careers with a social purpose and better work life balance, this misperception is contributing to the talent shortage affecting the industry. Women are essentially self-selecting out of a globally valuable and financially rewarding career opportunity at a young age.
The industry needs to address financial understanding and perception. It is important to work with schools and universities to provide better insight into the financial sector, and to explain banking and money management to young people. Better financial literacy would benefit all genders by providing much needed financial confidence and enabling them to understand how savings, borrowing and investments work.
It is also vital to change the perception of banks and bankers; to encourage all talented individuals into an industry that will play a vital role in encouraging innovative sustainable investments and safeguarding impoverished communities in the future.
According to the Deloitte Global 2021 Millennial and Gen Z survey, younger individuals are channeling their energies toward meaningful action – increasing political involvement, aligning spending and career choices with their values and driving change on social issues that matter most to them. They expect institutions, including businesses and governments, to do more to help bring about their vision of a better future – and that is a message the financial industry cannot afford to ignore.
Embrace diverse talent
The lack of gender diversity is not a problem that can be solved simply by increasing the number of women in the developing talent pool. Given the current skills shortage and the pressing global economic needs, the finance sector cannot afford to wait for school and university aged women to make a difference to the gender split. It is vital to attract talented women from other industries into the sector now.
This will mean challenging traditional stereotypes. Not all roles within finance require excellent math skills. Within a bank’s legal team, for example, it is far more important to have an excellent grasp of language. From sales to operations, there are many jobs within finance that are not limited to quantitative expertise.
Of course, attracting talent is just the start – keeping women in the industry is also a concern. While many institutions have successfully instigated family-friendly policies and workplaces, there is still a bravado associated with financial services which makes it harder for women to rise to the top.
There is competitiveness, a tendency to push hard in meetings to express opinions and stake a claim. Male/female conditioning is different – women are more conditioned than men to be more agreeable, focusing on achieving mutually beneficial solutions. Women are great at building relationships. And while these are vital skills in achieving the economic goals of both business and governments, women’s voices need to be better heard around the financial services table in order for them to consider it worthwhile to stay in the game.
This is not about women changing their behaviour: there are many strong, outspoken women in the workforce. Rather, it’s about encouraging women – and the industry at large – to recognise and reward the vital skills they bring; to develop from a young age the additional skills they may need and to gain an appreciation for the many rich opportunities a career in finance can offer.
A more diverse workforce is proven to be good not just for the bottom line but for the wider national and international economy. It is also good for women themselves. Not only does the finance industry offer diverse national and international opportunities, but the environmental, social and corporate governance (ESG) side of finance, as well as a commitment to philanthropic activity, continues to grow.
The onus is on the financial sector to become more appealing to a broader workforce, to highlight the importance of good banking in successful and reinforce the commitment to a more sustainable investment model. Critically, the industry needs to actively engage with women of all ages to overturn the long held ‘male only’ perception. The industry needs women; and women need the opportunities provided by the financial sector. It is essential that we all work together to encourage women to join and remain in the industry.