Throughout history and across cultures, women have been forbidden from opening bank accounts, owning property, and taking out loans.
Fortunately, most societies today don’t legally bar women from partaking in these tasks, but the ancient history of shutting doors on women seeking greater financial control has left an undeniable gender gap in the world of financial services and a lingering, detrimental attitude that money management is a man’s job.
As we celebrate International Women’s Day, we can recognize the financial services industry’s progress in forging more equitable attitudes and practices while still acknowledging that it still has far to go in its journey toward greater inclusivity.
Here are some ways that financial services institutions can continue to work toward bridging the gender gap:
1. Promote the advancement of women into leadership roles
According to research conducted by Mercer, about 46% of employees in the finance sector are women; however, only 15% occupy executive positions. Many factors contribute to this statistic, such as the historically male-dominated workplaces of many financial services institutions that lead to male-oriented workplace culture values. This exists in tandem with the inequality in numbers from the bottom up (i.e., 84% of finance professors are men). Another issue is the common “broken rung” women experience when trying to move up from an entry-level role to a managerial role; a woman who holds an entry-level role is far less likely than her male counterpart to be slated into a managerial position.
Successful institutions must intentionally work to mind this gap by investing in the education, training, and mentoring of women. Not only does including more women in c-suites give businesses a better public perception, but it helps deter decisions from being made under rigid “groupthink” mentalities, which in turn contributes to higher profits. According to Forrester, companies in the top quartile for gender diversity are 21% more likely to have above-average financial returns.
2. Consider women more mindfully in marketing efforts
When determining your target audience, it should no longer only be older, wealthy men. In fact, a 2021 study by BNY Mellon showed there would be an extra $3.22 trillion of assets under management from private individuals if women invested at the same rate as men. Not to mention, as of 2020, women control two-thirds of consumer spending, hold 40% of total global wealth, account for 40% of entrepreneurial activity worldwide, and are the main breadwinners in 49% of U.S. households.
Firms must more thoughtfully consider the different assets, behaviors, and financial needs of women when executing their marketing tactics. And they must do so with an intersectional approach – what may be true for one woman is not for another. One-size-fits-all marketing is no longer sufficient to remain competitive.
3. Examine how your institution’s products and services support women
Keeping in mind that women are 30% less likely to have sufficient access to funding for entrepreneurial efforts, eight times more likely than men to look after sick family members (which can prevent them from working and getting paid), and typically have 30% to 40% lower retirement account balances than men – how are your institutions’ products functioning to help women maneuver these challenges?
One example of an institution building products and services with women in mind is JPMorgan Chase. The firm developed a Curated Coaching for Entrepreneurs offering that provides free small-group coaching to female entrepreneurs as part of its Women on the Move initiative.
Goldman Sachs has a similar initiative called 10,000 Women. This program strives to provide “women entrepreneurs around the world with business and management education, mentoring and networking, and access to capital.” As part of the initiative, Goldman Sachs developed a free online business education program available to women globally. The program has 10 courses in topics including business finance, digital marketing, and innovation strategy.
Gone are the days when a company could just add some (traditionally) feminine branding and call its efforts toward gender inclusivity sufficient. Gender diversity is an essential component of delivering elevated business strategies. It helps attract and retain better talent, enhances creativity, and improves ROI.