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Why does the banking and finance industry need more diversity?

03 February, 2020Mutahara Gofur

Most banks and financial services companies have policies to encourage diversity and inclusion in the workplace. And yet the industry is still slow to make progress – despite the obvious benefits of diversity. Mutahara Gofur looks at the glass ceilings and what can be done about them.

Two young women look at a computer screen
The evidence is stacking up – diversity is good for business.

According to McKinsey (2015) companies with more gender diversity are 15% more likely to benefit fiscally above national industry medians. For Black Asian and Minority Ethnic (BAME) representation, this figure increases to 35%.

And diversity helps companies keep up with innovative trends, bring in new ideas and perspectives, and continue to evolve.

Looking at the evidence, it’s no wonder that more companies are trying to encourage diversity and inclusion.

But the Financial Conduct Authority (FCA) estimates the banking and finance sector won’t achieve gender equality for another 88 years.

Research by SKEMA Business School’s Observatory on the Feminisation of Companies in 2018 found that women make up an average of 52% of the banking sector’s workforce. But only 38% are in middle management roles – 24% at board level and 16.5% at executive level.

Representation of BAME workers in the financial sector is growing at an even slower pace. Randstad’s 2018 Diversity and Inclusion report also stated that members of the BAME community currently hold less than one in ten of UK management jobs.

When reviewing more senior and executive positions in banking and finance, it’s clear there’s still a glass ceiling to break for these groups.

So how can companies recruit more talent from a broader range of demographics unless that talent is attracted to join the industry in the first place?

How can we attract more diverse talent into financial services?

Part of the problem is the way the industry is perceived. When visualising the banking and finance sector and how it operates, often the first thing we picture is a very white, male dominated image. And given the evidence, this is a fair assumption.

So how do we attract more people from under-represented groups into the banking and finance sector?

Through our REACH programme we’re working to provide at least some of the answer.

Throughout the year, we host free events and workshops for BAME, female, and mature students who are interested in finding out more about a career in the industry.

Reaching out

Participants meet people like them who are working in the industry. They hear their stories, have the opportunity to network, ask questions and get advice.

People like Ayesha Ofori, Founding Director of Axion Property Partners. Back in July she shared insights into her career in investment banking, wealth management and property investment and how she overcame the challenges.

Tama Muyunda, an A Level student who attended the event, said she felt “empowered” after listening to Ayesha speak. “She’s not like your typical person when you think of bankers. It’s nice to see someone from a different background can still be successful in there.”

Tama went on to say, “Seeing someone like her – I could actually go into that field.”

Seeing women – particularly women of colour – is important for younger girls as it gives them role models. It allows them to envision a place for them within the industry.

Some people are also less exposed to opportunities within the banking and finance sector.

Dhinta Foster is a Product Development Executive at Amplify and has taken part at several REACH events. As a teenager, she told us, she had no idea what a career in the financial services industry entailed.

“Had it not been for one of my friends when I was a first-year undergraduate telling me about these opportunities I would not have had my career in banking.”

She emphasised the importance of reaching out to younger women – and younger underprivileged groups of students – and encouraging them to explore “what’s actually out there”.

“Going to events like this – just actually doing more things outside of their school classes, university classes. Talking to people as well who are in the industry and trying to find out what it’s actually about.”

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Find out more about REACH