The latest edition of our Women in Financial Services report, published in 2020, has found that the industry is finally making progress on gender diversity in the workforce. Mindsets are shifting and, as a result of hard work and commitment, progress is beginning to be reflected in the numbers.
But that progress – 20% representation of women on executive committees and 23% on boards – is not enough. There is still a long way to go to create an industry in which women have equal access to opportunity and positive outcomes.
What got us to where we are today will not get us to our ultimate destination. So our report sets out to answer: what will deliver the next wave of change in gender diversity as we enter a new decade?
The report argues that recognizing that the workforce is not the only stakeholder group to which a firm is accountable is key. There is at least a $700 billion revenue opportunity from better serving women as customers. Supervisors and shareholders are increasingly applying pressure on firms to embed stability and drive better returns through diversity and inclusion. And both individual firms and the industry as a whole have a responsibility and opportunity to improve gender equality in society more broadly.
This edition of the report takes a panoramic view of gender diversity across all stakeholders. This will lead to creative solutions in defining an action plan, embedding diversity and inclusion as part of business strategy, and calling for public commitment to gender equality in financial services. And in doing so it pushes the issue into the daily path of the CEO and executive committee.
Exhibit 1: REPRESENTATION OF WOMEN ON EXECUTIVE COMMITTEES BY ROLE IN MAJOR FINANCIAL SERVICES FIRMS GLOBALLY (%)
Source: Oliver Wyman analysis of organization disclosures
Exhibit 2: REPRESENTATION OF WOMEN ON EXECUTIVE COMMITTEES BY ROLE IN MAJOR FINANCIAL SERVICES FIRMS GLOBALLY (%)
Source: Oliver Wyman analysis of organization disclosures
A Panoramic Approach
Three Ways To Improve Gender Diversity In Financial Services
1. Set A Panoramic Ambition Covering All Stakeholders
The first step is to understand the current motivations, concerns, and pressures across each stakeholder group. This will allow firms to uncover and, where appropriate, quantify the opportunities. This insight can be used to define a new action plan and measure progress against it by tracking the quality of outcomes for all stakeholders.
For customers, this means using data to provide new insight into the gaps in how the financial services industry is serving the needs of both women and men today. This will allow firms to truly start with the needs of the end user and take a gender lens to proposition design.
For society, financial services has a privileged and unique role to play, and can lead the way on driving financial inclusion and literacy for women, and on helping women achieve their career and financial aims.
By changing the nature of the dialogue with supervisors and shareholders, firms can demonstrate that gender balance is at the core of culture, risk management, and risk-adjusted returns.
For the workforce, firms need to focus on levers that keep them at the cutting edge, including creating policies that neutralize the disadvantages of maternity leave, designing solutions to the level of the individual, acting with conviction to get women into the most senior seats, embedding inclusive behaviors, and strengthening the sense of belonging. There is no single solution, but the list of impactful levers is long.
To truly take a panoramic approach, connections need to be made across all stakeholder groups to share and cross-pollinate ideas. Today, heads of I&D are often within the HR organization and there is an obvious rationale for this, but it will be important to find organizational solutions that foster better connections across HR, customer facing teams, and units that manage the supervisory interface and PR/IR.
2. Reframe The Business Strategy With I&D At Its Core
Our report has identified a $700 billion revenue opportunity from better serving women as customers. In a $4 trillion revenue industry that is currently growing below GDP growth rates, this is arguably the largest single growth opportunity out there.
The strategic imperative is even stronger. Firms will need to rapidly adapt business models and strategy as the financial services industry digitizes, ways of working are transformed, customer expectations change, and the makeup of the workforce changes. It is already critical to identify the more diverse capabilities required to deliver the future business model. A clear path for the workforce for the future needs to be agreed.
3. Integrate Gender Balance As Part Of Purpose And Brand
Purpose matters more than ever today. A sense of what a firm exists to achieve and why is increasingly central to the choices that customers and employees make about their loyalty. Financial services firms at the cutting edge have been strengthening their purpose and, as a result, shifting culture.
As the agenda widens to developing a gender-balanced workforce, serving a gender-balanced customer base, satisfying gender-balanced shareholders, and contributing meaningfully to society at large, it becomes clearer that gender and diversity in general should play a centrally connected role in a firm’s purpose.
A firm’s purpose finds its expression in its brand – the emotional relationship that stakeholders have with the firm or, as has been said, “what people say about you when you are not in the room”. Translating a commitment to diversity and inclusion certainly requires brand design and external communications. But building purpose and brand requires much more than that. All stakeholders will need to be engaged on the journey to personally connect with the purpose – including through storytelling campaigns and participative programs where stakeholders can join the dialogue to foster engagement and stewardship.
It is a well-trodden path to ask for the CEO to be the champion for diversity and inclusion, because it is the “right” thing to do and is good for business. And many CEOs have taken up the challenge. But we believe that if you reframe the challenge and take a panoramic approach, where gender balance becomes central to purpose, customer service, business strategy, your equity story, your supervisory relationships, and your brand, this will no longer be a choice for the CEO but a central part of their mandate.