Women In Financial Sector And Their Challenges
“The story of women’s struggle for equality belongs to no single feminist nor to any one organization but to the collective efforts of all who care about human rights.” – Gloria Steinem
What Is the Financial Sector?
The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers. This sector comprises a broad range of industries including banks, investment companies, insurance companies, and real estate firms.
The general narrative around women and money is that women don’t understand money. But then, that might be true only in jokes and common gender roles within organizations that consider names like Chanda Kochhar and Shikha Sharma as illustrious exceptions. Globally, finance is one industry where women have traditionally broken glass ceilings and claimed their rightful share of power, position, and wage.
Women and men begin in parity at the start of their careers in finance, but the C suite is still predominantly male in the financial sector.
A 2018 report from McKinsey found that while male and females in finance begin their careers on equal footing, as the ladder rises, women only account for 19% of the positions of power.
A brief history of women in Finance
The world of finance used to be seen as an industry only for men for the longest time. However, that has changed in the last few years.
Here are famous women who made history as first women’s in the finance world;
- Maggie Lena Walker, first female bank president
- Abigail Adams, first female investor
- Rosemary McFadden, first female exchange president
- Victoria Woodhall and Tennessee Clafin, first female stock brokers
The challenges for women
There are plenty of statistics tracking the percentage of women in the workforce, their qualifications and their salaries, but that data doesn’t show us the whole picture: It doesn’t capture how women feel, how they fare in the workplace day-to-day, the challenges they face.
The findings are compelling. According to the research, the issues that concern women the most are:
- Barriers for entry-level women in financial services
- An ambition gap Inadequate access to sponsorship
- Access to senior leadership remains uneven—even at the highest levels
- Balancing family and work becomes increasingly challenging
Data insight from the Bloomberg’s Gender Equality Index shows that the proportion of women in senior management and executives was 27 and 19%, respectively; while for CEOs it was a mere 6%(Source: Bloomberg reports)The 2020 index includes 325 companies spanning 50 industries across 42 countries, and also reveals that financial services is one of the sectors showing the most considerable gender gap challenge at advancing women.
A few more to be considered in Finance sector
- Women Are Less Likely to Receive Promotions and Sponsors
- Globally, women represented 12% of CFOs in large-cap firms and 34% of CFOs in mid-cap firms in 2018.
- Not many girls and women think of financial institutions as possible employers, and if they do, the government ones are the most coveted.
- Women also feel that they do not have the skills required to make a career in finance; some fear the pressure of targets.
- Constraints on mobility and security present further restrictions as does the hesitation of seeing no female peers among existing staff.
- A male culture in the sector also serves as a barrier, with male staff often socializing over a drink, late after office hours; bonding events that tend to exclude women.
- Women make up:
- 35.5% of investment advisors
- 23% of CFPs
- 19% of Chief Investment Officers at institutional investors
- 18% of CFAs
- 11.7% of private equity executives
- 9% of mutual fund managers
- 8% of venture capital investment professionals
- 2.5% of hedge fund managers
- This is progress. But it isn’t enough. We have known for 250 years that women are not just capable, but exceptional in financial roles.
What can we do to encourage women? Investing in young women
- Build accountability through target setting and measurement.
- Give employees the flexibility to balance work and family.
- Rebrand the industry to make it more attractive to women.
- Enhance the quality of and access to sponsorship
- Eliminate bias in reviews and promotions
- Open communication between women in a business about fears and challenges often helps resolve them.
- Strong female leaders can have a positive impact on the workplace.
“Anybody who doesn’t think about how to bring in more women won’t be able to compete, because they’re just cutting out half the talent from their opportunity set” – Jenny Johnson, Franklin Templeton Investments