How The Financial Services Industry Can Accelerate Diversity Initiatives

Sharon is Finastra‘s Chief People Officer, an author and a champion of equality and inclusion.

On March 8, 2022, countries all over the world observed International Women’s Day, “a global day celebrating the social, economic, cultural, and political achievements of women.” We also recognize the entire month of March as Women’s History Month. In addition to highlighting women’s achievements, these observances serve as a call to action for advancing women’s equality.

In the financial services and fintech industries (where my organization operates), progress on gender diversity and other D&I (diversity and inclusion) initiatives has been slow, but more organizations are recognizing the value of a diverse workforce and taking steps to improve.

Diversity hurdles still persist in the financial services industry.

Research from McKinsey and finds that while just over half of entry-level financial services professionals are women, that percentage shrinks as roles become more senior—especially for women of color. Representation of Black, Latina and Asian women falls by a staggering 80% between the entry-level and the C-suite. In addition, for every 100 men promoted to manager roles in the financial services field, only 86 women achieve the same milestone. Even back in 2015, a PwC study found that among female Millennials working in the financial services profession, over 70% believed that while their organizations talked about diversity, inequality of opportunities persisted; half believed that promotions were indeed biased in favor of men.

The above statistics are just a few of the many indicators that even though the financial industry has acknowledged the importance of diversity, it has a long way to go in terms of extending equal opportunities to women. The same is true when it comes to employees of color. For instance, an analysis of racial demographics at 13 major U.S. banks conducted by the Committee for Better Banks reports that “workers of color are more likely to hold entry-level positions than white colleagues and face decreasing odds of holding professional, mid-level, and senior managerial roles.”

It’s also important to note that given the intersectionality between gender, race and other characteristics, efforts to improve inclusivity for women in the workplace can be beneficial for improving diversity and equality more broadly.

Recognizing where there is room for improvement with regards to D&I and taking actionable steps to do better are two different things. Financial institutions need to commit to building a more diverse and inclusive workplace by adopting foundational strategies for accelerating progress. Based on my experience as an HR professional in the financial services industry, here are a few strategies.

Secure buy-in from leadership.

First, organizations need to set clear goals and secure buy-in from leadership. To set achievable goals and secure buy-in from leadership in reaching them, HR leaders should create a game plan with tangible milestones and specific initiatives that give different teams and individuals a role to play. From there, HR leaders can present their plan to their organization’s leadership team alongside a clear summary of the business case for accelerating diversity goals

When I joined Finastra in 2019, women held only 11% of leadership roles in the company—today, we’re at 30%. We still have a long way to go, but part of the reason we’ve achieved this progress is that we secured a top-down commitment from management to make it happen.

Build a flexible and supportive culture.

Creating a more diverse and inclusive workplace requires building a flexible and supportive culture across the organization. Especially when competition for talent is at a peak, an empathy-driven culture is key to attracting and retaining a diverse workforce. This means listening actively to employees’ wants and needs and updating policies accordingly. For example, it’s no secret that in the current environment, people want more flexibility to choose when, how and where they work. This is especially important to women who are working mothers and need to balance childcare and professional responsibilities.

How can you cultivate a more supportive work environment? Consider implementing a hybrid working model that offers flexible working, less travel and a solid investment in spaces, tools and policies more reflective of today’s culture. Find ways to facilitate safe collaboration and enhance your technology tools to enable digital-first working—but also offer your teams the chance to collaborate face-to-face when it makes sense. At my company, we also introduced unlimited vacation time, which employees agree upon with their line manager. This policy enables our team to take time off for the things that really matter.

Amplify women’s voices.

In a field like financial services where women are massively underrepresented, companies that prioritize D&I must make an active effort to highlight the achievements of female talent—not only within their own organizations but across the industry. Company-sponsored events or competitions that focus on women’s contributions to financial services can help create an environment that attracts and celebrates diverse candidates pushing boundaries of innovation.

For example, last year we launched a global hackathon competition aimed at reducing AI bias in financial solutions like lending. We encouraged women-led and diverse teams to join the hackathon, and among 600 participants from more than 50 countries, nearly 80% of the projects were led by women. The talent is there—but we as an industry need to create an environment that enables women to thrive.

Observances like International Women’s Day and Women’s History Month periodically shine a spotlight on the importance of D&I, but advancing equality and inclusivity demands a year-round commitment. Securing buy-in from leadership, building a more flexible and empathetic culture, and amplifying diverse voices are three fundamental strategies companies can implement to accelerate diversity initiatives in their organizations. These are steps leaders can take to contribute to much-needed progress across the financial services industry.

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