This article was first published on April 21, 2020.
Editor's note: Oliver Wyman is monitoring the COVID events in real-time and we have compiled resources to help our clients and the industries they serve. Please continue to monitor the Oliver Wyman Coronavirus hub for updates.
The World Economic Forum predicts that the fallout from the COVID-19 pandemic may be worse for women than for men. Although research from the Chinese Centre for Disease Control shows a higher death rate for men (2.8 percent mortality, compared to 1.7 percent among women), the social and economic knock-on effects of the health crisis are expected to be poorer for women.
Women are both more likely to be made redundant in an economic downturn and quit their jobs or reduce their hours when greater care responsibilities arise. We learned from West Africa’s Ebola outbreak that women’s earnings recover more slowly than men’s. The longer the global outbreak continues, the greater the risk to vulnerable women: According to the charity Refuge, calls to the UK’s National Domestic Abuse Helpline increased 25 percent during the first week of the country’s lockdown.
Women who work in the financial services sector and women who are customers of financial services are vulnerable to all these effects. As such, financial services companies have a role to play in reducing the impact on women who work in the sector and who are their customers. For example, by protecting their frontline staff in branches, supporting employees juggling work, family, and financial responsibilities, and acting with empathy towards customers whose circumstances have suddenly changed.
At Oliver Wyman, we believe that there is even more the financial services sector can do for women. By using this period of unprecedented change in the world, companies can emphasize, re-think, and re-start their approach to gender balance. This will require hard work and the attention of senior leadership in three key areas.
First, leaders must ensure their COVID-19 response is shaped by a diverse group of perspectives, including those of women. In parallel, broader internal inclusion and diversity initiatives must continue. Second, they should embed the remote and flexible working practices brought in during the pandemic lockdown into day-to-day operations – this will open the industry to a more diverse talent pool, including more women. Third, companies must use the pandemic as an opportunity to change how they support female customers.
FOCUS ON INCLUSION AND DIVERSITY THROUGH THE CRISIS
We saw during the 2008 financial crisis that inclusion and diversity can rapidly be deprioritized when firms are in an emergency response mode, managing costs, and fighting for survival. But what we also learned was that diversity of thought is crucial for stability and a strong crisis response. So today we encourage financial services firms to continue to focus on inclusion and diversity to maintain and build inclusive cultures, in order to emerge stronger on the other side.
Already, we see some of the most effective responses to COVID-19 coming from Iceland, Taiwan, Germany, New Zealand, Finland, and Denmark. All have women in government leadership positions. This should underline to financial services companies that diversity in their own COVID-19 response teams is not just nice-to-have, but essential. They must recognise the importance of cultivating a broader range of perspectives and ways of thinking in how they deal with crises.
EMBED NEW WAYS OF WORKING
COVID-19 has demonstrated that financial services companies can operate remotely. Even in areas such as trading, which have traditionally relied on physical presence, firms have rapidly and successfully adapted.
By recognising remote working can be effective, financial services companies can embed flexible working practices. In the future, this will help attract more diverse employees, for example those with family commitments. The flexibility remote working brings will reduce the need for ambitious employees to make sacrifices in their personal lives in order to reach leadership roles. Both these outcomes will significantly benefit women and improve the gender balance in financial services.
In this future of remote working, different and broader communication skills will be valued. For example, employees will not be able to rely on strong in-person communicator skills alone. They also need to communicate well via videocalls, which require much stronger listening skills, and email, which require clear and succinct writing abilities. We believe that recruiting for these skills will build a workforce with more diversity of thought across all genders.
SUPPORT WOMEN AS CUSTOMERS
In Women in Financial Services 2020 we reported that the industry is missing $700 billion in revenue every year by not meeting the needs of women as customers. As the pandemic evolves, women’s financial needs will shift, too. The industry has a societal responsibility as well as a commercial opportunity to support them through these changes.
To understand how the pandemic affects female customers differently to men, financial services companies need to split their customer data by gender and examine any differences in between them.
In banking, this might reveal how women are struggling more than men to access credit, or if women-led SMEs are not taking advantage of government grants. Banks could then introduce new ways to help these groups. In wealth, we already know that compared to men, women invest more in cash products and less in stocks and bonds. Asset managers should find ways to help women effectively re-allocate their investments when the market stabilises.
LOOKING TO THE FUTURE
Financial services firms are at a turning point. The COVID-19 pandemic could divert them from the bold steps needed to increase gender balance, or it could establish new norms that accelerate progress. With gender balance key to driving better business outcomes, firms which continue to make progress on diversity issues, despite the pandemic, will have more successful and resilient businesses after the current crisis.
This article was written together with Whitney Schuringa, Ryan Spatz, and Louise Bradley.