By Rupal Kantaria.
This article first appeared in Financial News on January 15, 2021.
The pandemic has sped up numerous trends playing out in financial services. Mobile banking and payments, for example, made a decade’s worth of progress in 2020; last year the small-business payments firm Square reported that the percentage of its customers describing themselves as “cashless” nearly quadrupled to 31% in just two months’ time. But one area of financial services could be reversing course: gender balance.
The financial-services sector was making headway, albeit slowly, on this issue before Covid-19 hit. But female financial-services professionals recently contacted by Oliver Wyman said they felt they have been negatively impacted by the pandemic vis-à-vis their male counterparts, mainly due to additional responsibilities at home. Some 69% said they observed women returning to the office at a lower rate than men and thought this would negatively impact their career progression.
In a poll of more than 250 attendees of a December Oliver Wyman/30% Club panel on gender in financial services, 72% of respondents said Covid-19 has been more negative for women than for men in the short term.
Over the longer term, setbacks for women in financial services could become more entrenched. Firms that are mapping out their post-Covid work structures run the risk of overlooking the pandemic’s effects on women and assuming their plans are gender neutral.
Most senior decision-makers in financial services are still men who, with all good intention, might simply be unaware.
A diminished role for women could have negative consequences not only for firms’ workplace cultures but also for growth. Oliver Wyman recently found that there is a $700bn revenue opportunity for financial services firms in catering products and services more towards women. As just one example, business registrations in the UK jumped by more than 120,000 in the third quarter of 2020. Firms that gear products and services to the needs of female entrepreneurs as well as males will serve them better.
So what, specifically, can financial-services companies do to improve gender balance after Covid-19?
As the pandemic experience shows, this is much harder than we thought. It’s clear now that firms can’t reach their potential without applying the lens of gender balance to every aspect of their enterprise, from their talent pool and customer base to their investment choices and overall impact on society. Considering all women, from current and prospective customers to employees and managers, requires a panoramic approach across all stakeholder groups, with gender balance as the pole star.
First, firms should recognise the opportunity the pandemic has provided to re-examine the past several years’ worth of gender diversity efforts. It is time to reset core values and transmit those values in everything a firm does. Most tangibly, now is the time, at long last, to elevate the theme of inclusion and diversity to the C-suite, so that it becomes part of the firm’s core strategy across its operations, as many companies have done with environmental, social and governance, or ESG, initiatives.
Firms should track their progress and report it regularly to all stakeholders. They also shouldn’t be daunted by their lack of progress so far. There’s an Indian saying, ‘Banat, banat, ban jai!’ which loosely translated means ‘striving, striving, one day, behold!’ Firms that don’t make gender part of their DNA now won’t experience breakthroughs later.
Second, firms should use technology to maximum advantage in the post-pandemic world. The rapid shift to digitisation in recent months gives firms a tremendous opportunity to redesign products and services that speak more directly to women and are targeted more closely to their evolving financial needs, from investing and wealth to insurance, home ownership, small business borrowing and so on. Firms also should be ramping up their financial education and delivering it digitally.
Third, firms should recognise that the moves they make now will set the tone for the post-pandemic future. They must focus more energy on putting talented women in top roles.
This will also serve to broaden and sharpen their understanding of gender differences throughout the ranks. In particular, firms should focus laser-like on the mid-career gap, which is when men tend to continue ascending to senior management roles while women often fall behind as they have children and then return from maternity leave.
Firms that reflect outwardly their inner goals on gender diversity can create a virtuous circle that improves their performance, enriches shareholders and, over the long term, benefits society.
This is the perfect time for firms to expand flex-time opportunities and ramp up job-sharing arrangements, for starters. The pandemic has shown that creative solutions that might have seemed out of reach a few months ago are possible — at breakneck speed.
Finally, after establishing gender and broader diversity as a core function and addressing women as customers and employees, firms should mirror those changes back to society.
Purpose-driven capitalism is an important theme of this new decade, and gender is a central tenet. Investment banks should impose diversity requirements on companies they take public, retail banks should consider gender in small-business lending, asset managers should focus on diversity in investment targets, and so on.
Firms that reflect outwardly their inner goals on gender diversity can create a virtuous circle that improves their performance, enriches shareholders and, over the long term, benefits society.
