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Women in banking and finance: How has it transformed in twenty years?

by Henrietta King February 22, 2024

The landscape of women in the workforce has undergone substantial transformations over the past two decades, and the banking sector has experienced its own evolution in this regard. 

Currently, major banks proudly report a gender distribution of 45-60%, reflecting a seemingly equitable representation of both men and women in their workforce. However, a mere surface-level analysis fails to capture the nuanced reality of gender dynamics within the industry. 

At Freshminds, we have over 20 years of experience in placing exceptional talent, from graduate to executive level, within the finance industry. Through this journey, we’ve seen the shifts and priorities of the industry change - recognising how diversity is an important factor in ensuring businesses get the best talent available. 

We break down some of the nuances affecting women in banking below - exploring the history behind equality, the link between gender balance and business success, and how banks could attract greater numbers of women to their ranks. 

How quickly has change happened?

Historically, the gender dynamics within banks reveal clear challenges that go beyond simply employing more women. If we look back to the 1980s, banks were already claiming a 50% workforce split between men and women

Yet, a closer analysis, as evidenced by David L Collinson's research, exposes a stark discrepancy in the nature of roles women occupied within banks during that era. A staggering 60% of women were working in clerical and administrative positions, with a mere 1.8% breaking through to managerial roles.

In one bank (identified as Bank 2), Collinson’s research found that for every 3,268 men in a managerial position, there were 28 women - a data breakdown on this role seniority can be found below.  

Equality in numbers did not translate to parity in responsibilities; senior positions were disproportionately dominated by men, with women relegated to clerical positions. 

Moreover, as the digital era ushered in, the number of clerical and administrative roles declined, which affected women greatly, causing the number of women in this type of employment to dwindle.

Where are we in 2024?

Fast forward to the present day, and there is a discernible improvement in the representation of women in higher echelons of the banking hierarchy. 

At the junior analyst level, many banks ensure a balanced gender intake. Moreover, the number of women in managerial positions in banks has improved.

For example, in the Bank of England, the number has risen from 6% in 2000 to 30% today. Moreover, the number of female CEOs has increased from 1.7% in 2000 to 9.7% in 2020

This drive towards change hasn’t only been powered by the ethical angle of women being able to choose the career they want but also the commercial argument too. There is a lot of data and research that shows a more diverse workforce is beneficial to innovation and organisational growth.

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It is clear that the industry is heading in the right direction. However, progress is slow, especially at leadership levels where roles are still dominated by men. 

The fact that many banks do prioritise hiring a 50/50 gender split at the junior level, and yet the number of females at C-Suite levels remains low, emphasises that the climb to leadership positions for women in banking remains an arduous and complicated issue. 

The FCA reports that it will take a further 88 years for the banking sector to see true gender equality.

In essence, the last two decades have witnessed the opening of doors for women entering the banking sector. However, once inside, the climb for women is marked by obstacles that far outweigh those faced by their male counterparts. The ladder they ascend is marred by damaged or sometimes invisible steps - showing the grit and persistence of those who have climbed to roles of seniority today. 

So, whilst there have been very positive changes in twenty years, the industry still has some distance to go. 

Strategies for the future 

For businesses to truly understand which organisational blind spots and hiring decisions are impacting women, they need women in roles with power, providing the female perspective. However, it’s these very obstacles that continue to hinder women’s advancement to senior positions. This has become a vicious cycle. 

An example of how change is often driven by women in senior positions is Sheryl Sandburg. She was the COO at Facebook. During her time there, she endured a difficult pregnancy in which her feet swelled and made it hard to walk. 

Because of this, she realised how unsuitable the offices were for pregnant women or people with accessibility issues due to the car park being far from the office building and there being lots of stairs. She created changes to make the office more accessible but recognised that before her pregnancy, there would have been numerous pregnant women in the office who endured what she did. It took a female in a senior position to see this problem and, importantly, to make a change. 

You can listen to her full Ted Talk on women in senior positions here.

So, how can businesses attract more women? 

Do quotas work?

One common method businesses use to build greater equality is gender quotas. 

Although sometimes controversial, data shows that quotas have been effective for businesses in building a more equal gender balance at the entry level.  

A 2022 study by Lautura and Weeks explored the impact of quotas on the attention given to gender equality issues in the workplace. They compared the impact through two countries: Italy, which adopted quotas in 2011 and Greece, which hasn’t adopted any. 

Their research found that the implementation of quotas increased overall attention to gender equality issues by 50% and summarised by saying,

...this increase is not exclusively driven by the share of women on boards, suggesting that quotas influence the importance that both women and men within firms give to gender equality.

So, there is evidence to suggest quotas play an interesting role in attracting more women to entry-level positions as well as increasing general attention to gender issues. 

However, the problem with hiring quotas is that often, they do not account for the root of the problem, whether that be cultural, policy, or exposure.

Simply enforcing quotas to have more women in an organisation does not address why women are not in the business in the first place and why they do not stay; it does not address the barriers that make it a less attractive industry for women.

Quotas should not be abandoned, but alongside them, other changes can be implemented. 

Flexible working 

One approach which has been shown to attract more women is flexible working policies. 

To this day, more often than not, women take on the brunt of household and family responsibilities. Data from the 2022 EU Equality Index report shows that 78% of women do household chores and cooking daily, whereas only 32% of men do. 

Consequently, jobs with rigid working policies pose greater challenges for women. The surge in flexible working arrangements following the Covid-19 pandemic has exacerbated this issue, prompting more women to seek opportunities that accommodate their needs.

It's important to note that not all women have familial obligations, yet those without families can still benefit from enhanced work-life balance (a factor that impacts both men and women) and increased autonomy, particularly during events like menstrual cycles.

Additionally, flexible arrangements such as remote work break geographical barriers, providing employment opportunities for women in remote or rural areas. However, its effectiveness relies on individual circumstances and employer support, necessitating a holistic approach to address gender inequality.

Of course, parts of the finance industry are infamous for their long hours, competitive culture, and pro-office spirit - but this doesn't mean that banks aren't able to become more flexible in the future.

Prioritise leadership training

Another way to support women in the workplace is to provide specific leadership and training developments within the company - not only does this support functional learning for women interested in progressing their careers but demonstrates clear support from the business itself. 

While all-gender leadership initiatives are undoubtedly valuable,research consistently highlights the effectiveness of programs tailored specifically for women in boosting their chances of promotion. These programmes are so effective as they address the challenges faced by women who feel marginalised, encounter microaggressions, and also bear the burden of domestic responsibilities as they create a space wherein women can find empowerment through a network of like-minded and supportive individuals who genuinely understand and empathise with their experiences. 

By acknowledging and actively addressing the hurdles that women may encounter, these courses not only equip women with essential leadership skills but also cultivate a sense of solidarity, resilience, and confidence. 

This approach significantly contributes to breaking down barriers and propelling women towards leadership positions, thereby fostering a more inclusive and gender-equal business environment.

What can businesses do today?

Of course, there is no one-size-fits-all solution. Ultimately, it’s up to individual businesses within the finance industry to decide what strategy is appropriate for achieving greater numbers of women in senior roles. 

However, a fair and diverse recruitment process is an important catalyst for equality in a business. Beyond just implementing quotas, a fair recruitment process is one which values different perspectives and experiences throughout and will signal to future employees that diversity is a valued part of the business.

All banks are different, and no single change will instantly impact diversity numbers. What is crucial is that banks are making considered and intentional changes in their organisation to address gender inequalities alongside quotas. Rather than solely using quotas as a means to get more women into the organisation, banks need to demonstrate a genuine appetite for diversity through conscious changes that create an environment in which women can thrive. 

If banks continue to do this, the numbers will continue to change positively, just as they have in the last twenty years.

Find out how we tackle diverse hiring through our banking graduate schemes and our executive recruitment process
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