Placing gender on the financial services agenda

Think gender diversity has nothing to do with the disruptive trends currently challenging financial services? Think again.

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As technology, customer, shareholder and regulatory expectations evolve and challenge the relevance of traditional banks and insurers in people’s lives, financial services organizations need to recognize the benefits of diverse leadership more than ever.

It has been proven time and time again that diversity, and women in leadership roles, have a positive impact on a company’s ability to innovate, navigate disruption and improve its bottom line.

But research shows we simply aren’t doing enough to bring about meaningful change at the most influential levels.

We surveyed 350 business leaders across various industries to understand how organizations are addressing the impacts of diversity and the advancement of women. In financial services, we found that both male and female leaders recognize that our industry is in transition and that 77% of men and 66% of women acknowledged the value of diversity in navigating this industry change. However, four disconnects are holding back gender parity:

  1. The reality disconnect: Business leaders assume the problem is nearly solved, despite little progress within their own companies
  2. The data disconnect: Companies do not effectively measure their progress to gender parity
  3. The pipeline disconnect: Organizations are not creating pipelines for future female leaders
  4. The perception and perspective disconnect: Men and women do not view the problem the same way

Diversity is a business imperative.

Overwhelming evidence links gender parity to innovation and better financial performance, especially during times of transformation and disruption:

  • An analysis of the S&P Composite 1500 found that firms with women in top management roles experienced an increase in “innovation intensity” – and were worth, on average, about US$40m more than companies with only male leaders.
  • Teams with more women have been shown to be better at logical analysis, coordination, planning and problem solving.
  • A report from the Peterson Institute found that 30% female representation on boards can increase company net profits by 6%.

The reality disconnect – gender diversity in financial services is a long way off.

“We need to create a culture of diversity, inclusion and support.”

Male senior executive, Banking, Italy

Both banking and insurance leaders acknowledge the value of diverse leadership on non-financial performance (86%) and financial performance (70%). At the same time, women and men recognize that their own boards are not sufficiently diverse.

But the outlook for progress is dim: only 27% of banking respondents and 6% of insurance respondents expect a significant uptick in female leaders over the next five years. Without short-term gains in gender parity, how can we expect to achieve long-term goals?

While banking is performing better than other industries when it comes to addressing the gender gaps, insurance has more to do but can leverage banking’s progress as a springboard for accelerating change.

Outlook for progress: Only 17% of banking and insurance leaders expect to see a significant increase in the number of women in leadership roles in the next five years.

EY - Outlook for progress

The data disconnect – manage what you measure.

“We measure the progression of gender diversity. We get up to 50% in middle management but then when we get to senior management it disappears down a black hole.”

Senior executive, Insurance, UK

Banking and insurance are sectors built on an ability to know the numbers. But when it comes to measuring progress toward gender diversity, we are not doing enough to understand the data around female leadership.

Only 39% of insurance companies surveyed are formally measuring their progress towards gender diversity. While banking’s figure of 59% is the highest of the industries surveyed, it still leaves room for improvement.

When metrics are in place, most are focused on counting the number of women in leadership now, rather than analyzing the pipeline of future leaders. If businesses don’t measure the journey of women from entry level to CEO, they lack the information needed to understand when, why and how outstanding women drop off the leadership ladder.

Visibility and transparency into pay and compensation has also been raised as a driver of workplace equality. Although such disclosure would potentially expose any disparity across gender earnings, any ensuing talent war and/or wage inflation are commonly cited as reasons for maintaining wage privacy.

Men and women see things differently: Only 33% of female financial services leaders believe their organization is effective at promoting women into leadership positions versus 58% of men.

EY - Men and women see things differently

The pipeline disconnect – focus on the future.

“We focused on informally discussing the female development program and then creating it. When it was first raised with senior management, they said, ‘What about male programs?’ I said, ‘Well, you're looking at it.’ So they tentatively supported it but now that they have seen the benefits it has brought, they're fully on board. It makes a huge difference to women and helps with gender metrics reporting.”

Senior executive, Insurance, US

Banking, in particular, has come a long way in increasing its appeal as a workplace for women. Within financial services, most male and female leaders believe their organization is effective at recruiting and retaining female employees.

A number of banks are already working to improve diversity at senior levels, introducing policies ranging from targets for the number of senior management roles to be held by women to banning all male shortlists for such roles. Although these may be positive moves, they are tactical solutions.

Getting more women to the top, as key decision makers and influencers, requires first identifying, developing and then promoting potential leaders. Just 33% of female and 58% of male financial services leaders believe their organization is effective at promoting women into leadership positions.

While we have more to do, banking is the industry leader in building pipelines for female talent. One-third of banking organizations surveyed have formal structured programs in place to develop women – a percentage far higher than the cross-industry average (18%) and the insurance figure of 8%. Insurance has a long way to go to catch up, but banking’s positive example can help lead real change.

The perspective disconnect – can we agree on the problem and solution?

“The lack of networking opportunities for women can stop them reaching their potential.”

Senior executive, Banking, Chile

Men and women within financial services see the gender parity problem differently and have different ideas on how to solve it.

While 72% of women feel their gender is the single biggest under-utilized pool of talent, only 54% of men agree.

Both sexes agree that an inclusive corporate culture is one of biggest enablers of women’s careers. An inclusive culture encourages diversity of thought and experience and builds women’s confidence, which many respondents told us was an issue – women don’t put themselves forward enough. It’s hard to be confident when you don't feel included.

Barriers to women reaching leadership: what do women and men think is getting in the way?

EY - Barriers to women reaching leadership

Banks and insurers can take important steps to increase diversity today.

“There is a greater recognition that to be truly customer-centric, we need greater gender balance.”

Female senior executive, Banking, Australia

Accelerating gender diversity – so that our industry can reap its proven business benefits – will require decisive action at an organizational level and at a personal one. This will require strong commitment and ongoing sponsorship and support by executive leadership. 

The reality disconnect

  • Be transparent with customers and stakeholders about the diversity of your leadership team and your plans to improve it.
  • Support an inclusive corporate culture by clearly defining expectations and requirements for both men and women.

The data disconnect

  • Set a target for gender diversity and identify what you must do to achieve it.
  • Measure progress regularly using formal, targeted metrics and detailed reporting that reveals pitfalls along your talent pipeline.

The pipeline disconnect

  • Make formal and structured female leadership training programs a priority.
  • Develop and encourage mentoring and sponsorship opportunities for both genders.
  • Build diversity considerations into succession planning.
  • Develop retention strategies for talented female leaders.

The perception and perspective disconnect

  • Create working groups and action plans to open dialogue between genders and include different viewpoints.
  • Enable an inclusive corporate culture that allows women to feel included and confident enough to speak up and share.

Women can own their future.

  • Take charge of the next phase of your career. Don’t wait to be noticed -- put your hand up for opportunities.
  • IF board service is on the horizon even later in life, START today.
  • Understand what it takes to serve on a board and what skills and experience you need.
  • Seek mentors, coaches and sponsors, both men and women, and sponsor and mentor other women yourself.
  • Consider more-focused networking or targeted board-readiness education that helps you achieve the next step in your career.
  • Spread the word about what you want, seek guidance and have a plan.

Men can take a stand.

  • If you champion gender diversity, encourage others to do the same.
  • Become a sponsor and mentor; share your experience and knowledge with female colleagues and endorse them within your networks.
  • Consider whether your team has sufficient diversity of thought and experience to avoid “groupthink” and develop innovative solutions.
  • Make certain that networking and social opportunities involve activities and environments that make everyone feel welcome and comfortable.
  • Create a culture of diversity and inclusiveness that encourages both men and women to excel.
  • Consider critically where unconscious bias impacts your decisions about who to hire, who to collaborate with and who to promote.
EY - Navigating disruption without gender diversity? Think again.

Download the full report

How five disconnects are holding back gender diversity and stifling innovation in business.

About the survey

As part of our commitment to building a better working world, we asked senior banking and insurance executives from 23 countries about gender diversity. The participants included global board executives and board members, C-level officers, executive directors and heads of business units.

Respondents from financial services were 63% female and 37% male and averaged 48 years of age. Nearly half have worked in financial services for their entire career, with more than 84% having 10+ years of industry experience. Their functional backgrounds span finance, legal and risk management to technology, operations and sales marketing.


Related links


Financial services executives expect only slight increases in female leadership levels in next five years

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  Tara Alex

Partner | Financial Services

  Marie-Laure Delarue

Global Banking & Capital Markets EMEIA Leader

  Zaina Ahmed-Karim

Partner | Financial Services