There was a flurry of activity around the world leading up to International Women’s Day on March 8, but how can the financial services industry take diversity to the next level and drive real change?

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The buzz around International Women’s Day (IWD) gains momentum year on year across the financial services industry, with a multitude of (virtual) events, panels and podcasts. In many ways, this activity is indicative of how far diversity has risen up the agenda.

However, the industry’s stats are not showing much improvement, especially when it comes to women breaking through the glass ceiling to reach the top. According to Oliver Wyman’s Women in Financial Services 2020 report, the representation of women on executive committees is only 20% and 23% on boards in major financial services firms globally.

Last week, The Banker published a virtual roundtable with women across the industry, from fintechs to the big banks, talking about their experiences and what more that can be done. The list remains long: stop sexual harassment, close the gender pay gap, change recruitment methods, offer reskilling to those returning to work or pursuing a new career, funding diverse entrepreneurs, mentoring, and a C-suite focus on diversity. But many feel that these solutions have been talked about for years and yet a fundamental change remains elusive.

So how can the financial industry take the momentum generated around IWD and move to the next level in terms of diversity? The Oliver Wyman report zeroes in on the other stakeholder group that banks serve: their customers. It estimates that there is a $700bn revenue opportunity from better serving women as customers.

This makes sense in many ways. The report points out today’s reality: two-thirds of global households spending is controlled by women; 40% of total global wealth is now held by women and 40% of entrepreneurs around the world are women.

Evidence shows that approaches that may appear to be gender neutral in fact default toward men’s needs and preferences.

Oliver Wyman Women in Financial Services 2020 report

Yet women are still less likely to be approved for mortgages and other retail credit, they are less likely to receive funding to start and grow their business and they have lower pensions due to the gender pay gap and career breaks for caregiving. It is clear that they face different structural challenges than men throughout their lives.

While some argue that treating women differently than men is unwarranted, what they don’t realise is that there is a gender bias built into traditional financial services that needs addressing. As the report says, “Evidence shows that approaches that may appear to be gender neutral in fact default toward men’s needs and preferences.” With the advent of artificial intelligence, there is concern that this bias will become more engrained.

Yet inertia persists around addressing this issue. This reluctance makes less sense when considering that women make up 49.6% of the global population, millennials make up just 27%. Yet the financial services industry has been able to pivot, developing new products and services specifically for millennials over the past five years. And, as a side effect, other customer segments not specifically targeted have benefited as a result, as seen in the great shift to digital during the pandemic.

“The product you are selling to men is probably a good product for them. But the product you design for women is going to work better for everybody. Unfortunately, it does not work the other way around,” said Mary Ellen Iskenderian, president and CEO, Women’s World Banking, in the report.

Yes Bank is one institution that has stepped up to the challenge. On IWD, the Indian bank launched YES Essence, a suite of offers, solutions and products designed for women across all segments, including complimentary healthcare benefits, preferential pricing on loans, wealth management, and offers on upskilling through partnerships.

In this era of hyper-personalisation and customer-centricity, financial services players should focus on designing products and services to better suit women. If they do, not only will they attract more customers, but they will also attract more women employees as the image of the industry will be one of supporter, not thwarter, of their life ambitions.  

Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight

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