Diversity, an organisation’s ability to access a broad spectrum of ideas and personal experiences, is a proven driver of innovation and business success. Findings, however, suggest that the gender parity is far from a reality and there has never been a more important time to #PressforProgress in corporate South Africa – the theme for International Women’s day on March 8.
A study by EY (formerly Ernst & Young) of nearly 22 000 companies across the world in 2016 revealed that business under the leadership of women (30%) experienced 15% more profit on average.
With rapid technological advancements and the continued opening of new markets, innovation is playing an increasingly important role in value creation. With the growing body of evidence supporting the benefits of gender diversity in the workplace, there is no excuse for an industry to lag transformation in this respect. A more culturally representative demographic of corporate women leaders would not only be beneficial in driving growth led by innovation, but would also likely have a positive impact on a business’s bottom line.
A research study conducted by Oliver Wyman: Women in Financial Services 2016 corroborates these findings, suggesting that transformation in the sector, globally is slow. In 2016, Oliver Wyman reports that currently only one in four top-level management positions in the financial services sector is held by a woman. At the current rate, the sector will only reach the minimum target of 30% representation on the executive committee (Exco) by 2048.
At the current rate of innovation, this is too long to wait. Companies need to recognise, celebrate and seize the ideas that are created through gender diversity in order to meet current challenges. If companies fail to diversify, boards run the risk of falling victim to “groupthink” – a phenomenon whereby engaging only with those who share a similar view of the world blocks out other perspectives. The trouble with this is that these companies are left behind and don’t see change coming.
The rise of the female economy is one such opportunity currently overlooked by the South African financial services sector. According to Forbes magazine, in 2017 women will control about $18 trillion in annual consumer spending. Yet, according to an international survey by the Boston Consulting Group of 12 000 women from 21 countries, 73% of respondents said they were unhappy with the level of service offered by their financial provider, and 71% were unhappy with the product offering.
While the 2017 Old Mutual Saving and Investment Monitor (Monitor) – a survey designed to measure the saving and investment behaviour of South Africans in Metropolitan areas – didn’t measure South African women’s current level of satisfaction with local providers, research shows that women continue to doubt their own ability to transact with their bank or financial adviser on equal terms.
This dissatisfaction with financial services and subdued confidence should be a concern for the financial services industry. Women’s role in managing finances is on the rise due to the combined impact of growing gender parity in education, work opportunities, and spending power. The financial services sector needs to reconsider their approach to addressing the needs of women.
However, this issue is much bigger than introducing a new product or a service tailored for women. Businesses will need to stop and reflect, with brutal honesty, on the good and bad points of their current service model to women. The majority of women surveyed in the Boston Consulting Group believed that their gender was a key factor in the way they were treated, citing experiencing disrespect, condescension and a “one-size-fits-all” approach, among other issues.
For a financial services company to authentically connect with their market, it needs to reflect the diversity of the country internally. All management functions of top financial services companies – not only the marketing executives communicating to customers – need to buy into and commit to transformation.
While it is a positive achievement that in 2016 just over 30% of the total number of Certified Financial Planners CFP® professionals in South Africa were women, the issue needs to be addressed holistically. To tap into the female economy, the financial services sector needs to attract and retain more female talent in senior management roles. This will help them to authentically meet the financial needs of South African women.
Elize Botha is Managing Director of Old Mutual Unit Trusts.