Research on diversity and inclusion shows it’s good for banking and finance. So what’s blocking more women and people from ethnic minorities from progressing in financial services? And what can finance firms do to recruit and support under-represented groups?
Covid-19 has bought many challenges to banking and finance. Financial firms have had to adapt to new ways of working, and deal with revenue losses, redundancies and restructuring. Every business's first priority has been how to stay afloat.
But does that mean that diversity and inclusion are becoming less of a priority?
While a shift in focus may be understandable, diversity and inclusion are still important during the pandemic – not as a tick-box exercise but to help a business succeed.
Diversity and inclusion: the facts and figures
The 2020 McKinsey report, Diversity wins: how inclusion matters, assessed over 1,000 companies in 15 countries. It found that the relationship between diversity at board level and increased financial performance has strengthened over time.
Diversity brings clear benefits! And it looks like companies have got that.
Recent research by Refinitiv found that globally, cultural diversity on boards has gone up by 30% in the last five years. However, there’s still a lack in Black Asian and Minority Ethnic (BAME) diversity in financial services.
Refinitiv’s research shows that there has been an increase in women and ethnic minorities working in the sector over the last year. But the boardroom still lacks diversity.
This may be in part because female and ethnic minority candidates are put off applying for more senior roles as they don’t feel they stand a fair chance.
Why aren’t minorities progressing in banking and finance?
October is Black History Month in the UK – a time to celebrate the successes of African-Caribbean individuals and their contributions.
But it’s also a good time to reflect on disadvantages African-Caribbean people often face at work and the measures companies should have in place to support them.
In 2018 Trust For London examined the experience of young black men in London’s financial sector. More than a third – 38% – of their survey respondents said “interviewers’ demeanours would change when they saw that they were black”.
Some said that when applying for roles in a whole-white team, they were made to feel that someone like them wouldn’t “fit in with the work culture”.
This highlights deeper issues of unconscious – and perhaps sometimes conscious – bias in hiring processes. These biases would occur less frequently if minority groups were better represented within the sector.
How can financial services improve diversity and inclusion?
It is an organisation’s responsibility to ensure that they do everything they can to make the workplace as inclusive as possible. This begins with the interview and hiring process.
Companies could advertise job roles in minority publications that target female, BAME, LGBTQ and disabled people to pique the interest of a more diverse talent pool.
They should ensure that those involved in the hiring process have received relevant training before running interviews to reduce the risk of unconscious bias.
Mentoring schemes are also great for developing an inclusive workforce, boosting morale and promoting career progression.
Mentoring gives individuals the opportunity to express concerns without feeling judged as well as to seek advice from someone who may have been in their shoes.
How LIBF supports under-represented groups in financial services
Successful guest speakers from under-represented groups share their insights into the banking and finance world at our REACH events.
REACH events are an opportunity for BAME, female and more mature people – who are interested in the sector – to find out about the industry and what skills they need to succeed.
Research is interesting. But we shouldn’t need statistics to prove that we need more women and BAME individuals in banking and finance. We should embrace diversity and inclusion just because it’s the right thing to do.
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