Women are grossly underrepresented in all aspects of the financial services industry, including fintech.
According to the International Monetary Fund (IMF), less than 2% of CEOs of financial institutions are women, and for members of executive boards, the figure is less than 20%.
Why does this matter? Apart from the obvious lack of opportunities for talented women, there are broader implications for business resilience, as well as for economic policy at the national and international levels.
According to the IMF, a higher proportion of women in senior positions is associated with greater financial resilience. Furthermore, increasing the number of women in the economy can lead to different economic policy decisions, particularly in the male-dominated field of macroeconomics.
Women are generally more supportive of environmental protection and more sensitive to social impacts, critical issues the world needs to address as companies and governments seek to address the economic and social implications of environmental change and drive innovation. sustainable investment.
From a social perspective, there are also personal benefits for women associated with working in finance that should be factored into governments’ educational strategies. Greater financial inclusion of women, both in terms of financial education and finance-related jobs, increases empowerment, confidence, and awareness, all of which help protect individuals and families from hardship.
Why is the financial sector still not attracting talented women in 2022? Education and perception are two key factors. Over the last 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 engineers, 19% of computer science graduates and 38% of maths graduates are women, only 13% of the UK STEM workforce are women, according to the STEM Graduates jobs website. Similarly, in Australia, while percentages are slightly higher, overall female representation in STEM-qualified industries is still less than 30%, according to the government’s STEM Equity Monitor 2021 report. Even those women with the ‘proper’ education are not attracted to the workforce in the long term.
The problem is not limited to STEM. Women remain a minority in many areas, including business studies and economics, where women make up just 35% of graduates. Over the last 20 years, the proportion of women graduating with economics degrees has remained the same or has fallen. Why?
It is very disappointing to discover that many women are discouraged by a misperception of their own talent. Female students feel less likely to do well in economics and finance, and therefore less likely to select those subjects as their main college options, despite the fact that women perform better than well in introductory math courses. Coupled with the recent trend among young people to prefer careers with a social purpose and better work-life balance, this misperception is contributing to the talent shortage plaguing the industry. Women essentially self-select 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 a better understanding of the financial sector and explain banking and money management to young people. Better financial education would benefit all genders by giving them much-needed financial confidence and enabling them to understand how savings, loans, and investments work.
It is also vital to change the perception of banks and bankers; encourage all talented people into an industry that will play a vital role in fostering innovative sustainable investments and protecting impoverished communities well into the future.
According to the Deloitte Global 2021 Millennial and Gen Z survey, younger people are channeling their energies into meaningful action: increasing political participation, aligning spending and career choices with their values, and driving change on the social issues that matter most to them. matter. They expect institutions, including businesses and governments, to do more to help realize their vision of a better future, and that’s a message the financial industry can’t 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 pressing global economic needs, the financial sector cannot afford to wait for women of school and college age to make a difference in the gender divide. It is vital now to attract talented women from other industries into the sector.
This will mean challenging traditional stereotypes. Not all roles within finance require excellent math skills. Within the legal team of a bank, for example, it is much more important to have an excellent understanding of the language. From sales to operations, there are plenty of jobs within finance that aren’t limited to quantitative expertise.
Of course, attracting talent is just the beginning; keeping women in the industry is also a concern. While many institutions have successfully instigated family-friendly policies and workplaces, there is still a bluster associated with financial services that makes it difficult for women to rise to the top.
There is competition, a tendency to press hard in meetings to express opinions and make 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 for achieving the economic goals of both companies and governments, women’s voices need to be better heard at the financial services table if they are to be seen as worth staying in the game.
It’s not about women changing their behavior – there are plenty of strong, outspoken women in the workforce. Rather, it is about encouraging women, and the industry at large, to recognize and reward the vital skills they bring; develop from an early age any additional skills they may need and gain an appreciation of the many rich opportunities that a career in finance can offer.
A more diverse workforce has been shown to be good not only for the bottom line, but also for the national and international economy in general. It is also good for the women themselves. The financial industry not only offers diverse national and international opportunities, but the environmental, social and corporate governance (ESG) aspect of finance, as well as the commitment to philanthropic activity, continues to grow.
The onus is on the financial sector to make itself more attractive to a broader workforce, to highlight the importance of good banking in successful economies, and to reinforce commitment to a more sustainable investment model. Critically, the industry needs to actively engage with women of all ages to reverse the ‘men only’ perception that has long been held. 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 stay in the industry.