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Gender diversity key for success in financial services

Despite evidence that gender diversity delivers better business results, women in this sector remain underrepresented.

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.

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I’m not against diversity, although I think diversity of thought to be probably the most important form. The arguments for gender diversity seem fairly weak went based on company performance – if more gender diverse companies performed better, wouldn’t this be related in share prices and salaries? It strikes me that none of the matters at behemoths like M’soft, Apple, Google or Oracle reflected much gender diversity at all! It’s been said that the time to sell a stock is when the company appoints a Chief Diversity Officer…

“Gender diversity key for success in financial services”

“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”.

What rubbish. A classical logical fallacy. Simply because there is a correlation does not prove causation. Cum hoc ergo propter hoc. It could very well be that more profitable companies can afford the luxury of window dressing.

“Experienced 15% more profit on average”. Really? An absolutely meaningless statement. How do you “experience” profit? On what capital base? maybe larger companies employ more women?

I would like to see the actual statistics and the variables taken into account and those left out.

Since, if this is to be true, you would see companies all over the world falling over themselves to diversify more. As profits would then rise 15% on average. Seeing as that ain’t happening, I call BS.

I don’t bring “good results” to my company because I am a woman, I bring outstanding results to my company because I am ME. Being a woman is not some kind of a disability or neurological impediment and men are not “part of the problem” when it comes to my success at work. If anything, most of male colleagues went out of their way to support me even when it didn’t benefit them to do so. If they were aggressive while competing for a position / bonus pool then it was a compliment because it meant that they viewed me as a worthy opponent. Afterwards we all “had a drink and laughed about it”, so was not personal!

Ofcourse we must all cooperate, be kind and fair towards one another at work but it remains a a highly competitive, fierce environment. It is not a crèche and you wouldn’t be there if it did not offer financial compensation because it was not profit-driven. If a man is being rude and is trying to “push me aside” at work, it’s not necessarily because I’m a woman: he probably does it to other men too. He’s just a bully and he will meet his fate the same way female bullies do.

If you want to believe that “Men don’t want to hire us women and allow us women to succeed at work”, then you will find reasons to justify that false assumption. It’s called “confirmation bias” and it is part of the process of discriminating against someone.

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