Gender inequality and lack of women in finance has been a debate that's been on for years but more action need to take place to empower female professionals and founders. It's the only way ahead
In the world of finance, the gender gap is showing little sign of narrowing despite several new initiatives from the nation’s banks. According to a recent IMF study, women are still largely underrepresented at all levels in the global financial system – from depositors and borrowers to board members and regulators. The industry is plagued with negative headlines around pay disparity, lack of women in executive roles and the rampant male domination in every sector and clearly it’s not the best career advert for women considering a career in financial services.
Across the globe, women make up less than a fifth of bank board members and 2% of bank CEOs. Yet, there is a degree of irony in the statistics, as the IMF study also found that the “greater inclusion of women as users, providers, and regulators of financial services would have benefits beyond addressing gender inequality.” And that “women on banking supervision boards is associated with greater financial stability.” Indeed, the imbalance has economic consequences on the businesses who are lagging behind.
If we look at salaries alone, data released by pwc shows that the average pay gap ranges between 31% and 61% – a massive disproportion, more of a gulf than a gap. There are several key reasons for the disparity. And one of them being structural issues across the workforce as fewer women are in leadership positions. While women make up 46% of all financial services employees, at the executive level the figure plummets to 15%.
An announcement by the Association of Accounting Technicians sent a strong message to the industry that more needs to be done to tackle gender inequality. It said that the government’s Women in Finance Charter, extended to cover all businesses in the UK and requests financial firms to implement actions against sexism. They must start by setting internal targets for gender diversity in senior management positions, linking the pay of executive team members to the delivery of those targets and publishing progress annually to bring better transparency.
Despite the undesirable statistics, there is little to be gained from focusing on the negative aspects. Many of the UK’s national banks are working tirelessly behind the scenes to fight for gender equality. The battle for women in finance is underway and it’s time to shatter the glass ceiling once and for all.
Females and the world of finance is a pivotal topic and the challenges and opportunities presented by the sector have become critical. Not only in terms of the impact on women embarking on a career in the industry but also the important role finance plays for women succeeding in start-ups.
One of the biggest frustrations for women starting their own business is funding. In a study by the Federation of Small Businesses, a quarter of female founders said the ability to access traditional funding channels was a tedious task and many rely on alternative sources like crowdfunding, personal cash and credit. Women entrepreneurs on average also have lower loan approval rates than men and can sometimes be charged higher interest rates.
It’s an urgent call to action for banks and many have already taken action. For example, HSBC, Natwest and Santander have all launched different schemes to help women in business offering tangible support to potential female entrepreneurs, from specialist financial advice to startup funding.
In fact, despite these challenges more women want to launch their business. According to research by FreeAgent and OnePoll, one in eight women in the UK have a desire for entrepreneurship. Indeed there is no shortage of appetite or passion – it’s the practical and financial support that is needed to transform these ideas into successful businesses.
What’s clear is the finance industry is resolute in fixing matters for women, from employing more women in senior positions to solving issues around funding. So, while we can’t argue with the stark reality of recent statistics, there is a strong commitment to make the gender gap narrow once and for all.