International Women’s Day takes place on 8 March every year, with the aim of celebrating the accomplishments of women around the world. We take a look at diversity in the banking and finance industry and how the sector can be more inclusive for women.
Why is gender diversity important?
From a business perspective, it makes sense to prioritise diversity and inclusion in the workplace. According to a 2020 McKinsey report, organisations with more than 30% women executives were more likely to outperform organisations with a fewer percentage of women executives or none at all. Likewise, they also found in 2019 that companies in the fourth quartile for gender diversity were 19% more likely to underperform in terms of profit, than companies in the top three quartiles.
Having more women in senior positions allows banks and financial services firms to come up with fresh ideas, explore new perspectives, and keep up with innovative trends. When assessing the evidence, it’s no surprise that more organisations are making diversity and inclusion a priority.
How diverse and inclusive are banks and financial services firms?
But what does gender diversity look like in the banking and finance sector? A 2022 Deloitte report stated that women in financial services firms held 21% of board seats, 19% of C-suite roles, and 5% of CEO positions in 2021. In the banking sector in the UK, the number of women CEOs has risen from 1.7% in 2001 to 9.7% in 2020.
However, in 2019 the Financial Conduct Authority (FCA) estimated that the banking and finance sector won’t achieve gender equality for another 88 years. Although it’s clear that the industry has made progress, there are still steps to take when reviewing more senior and executive positions.
So what can the banking and finance industry do to recruit more female talent and encourage the career progression of women already in the sector?
Attracting diverse talent
One of the key issues with banking and finance is the perception of the industry. Often when trying to picture banks and financial firms, we think of a white, male dominated environment. Although this is a fair conclusion, there are steps that can be taken to make it more inclusive.
The FCA launched new diversity targets, with two targets being centred around gender diversity:
- at least 40% of the board must be women
- at least one of the senior board positions must be a woman.
They have also introduced a ‘comply or explain’ requirement in which organisations have to disclose whether or not they’ve reached their diversity targets, and if not, then why.
Women should be involved in the recruitment process, with minority groups being encouraged to apply when posting on job boards. Establishing a mentoring initiative can also help women throughout their career in banking and finance. It gives them networking opportunities and allows them to build contacts and have someone to go to for professional guidance and support. Women who have been mentored often also go on to become mentors themselves.
Through our REACH programme we’re working to inspire more women to join the banking and finance sector.
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.
Find out more about our REACH programme
Find out more about our professional qualifications
Find out more about our undergraduate degrees