Once a bastion of old-fashioned – if not downright distasteful – standards of behavior and employment practices, the financial services sector has quietly become one of the industries that is becoming more diverse and inclusive.
Traditionally considered the ultimate of boys’ clubs, old and young, the financial sector has struggled to shake off its image of being very male, even paler – and as a result of that, very stale in the 21st century.
Look beneath the surface, however, and a different and better story about diversity within the sector is emerging. Thanks to both external pressure and government initiatives, such as the Women in Finance Charter in the UK, it is clear that the financial industry has been making changes that are starting to create a more inclusive environment for its employees.
As you might expect, many of the businesses leading the charge are innovative fintechs. But big industry players are also taking significant steps towards making their organizations more diverse and inclusive. Whether it’s established brands like MasterCard and RBS, or newer ones like Stripe and GoCardless, the sector is challenging its reputation to create a better working environment for all its employees.
The case for diversity
Why is it important for financial services companies to become more diverse and inclusive? Simply put, companies that are diverse – that are more representative of their customer base – are better at solving problems , leading to improved customer service and innovation. A diverse workforce is also a benefit when it comes to recruitment, enabling companies to find and retain top talent. 54% of women and 45% of men research a company’s diversity and inclusivity policies when deciding whether to accept a job role.
Diversity leads to better perspective, decision making, productivity... richer experiences for everyone
As Robert Crowley, Head of HR at peer-to-peer lender RateSetter says, “Diversity leads to better perspective, decision making, productivity, acceptance and richer experiences for everyone.” He also points out that it is a crucial aspect that underpins how brands should think about customer experience. “It should flow through product design, customer service – what you’re delivering as a company is almost the other side of the coin to how you are running your company. How is that perceived by the customer? It’s what they are experiencing too.”
The UK Government has encouraged financial service companies to broaden their hiring scope, with initiatives such as its Women in Finance Charter. This asks firms to commit to supporting the progression of women into senior roles, set targets for diversity and publicly report on whether or not they are delivering against these targets. Earlier this year the government also announced the Race at Work Charter, signed by companies across all industries, to encourage real action in reducing ethnicity barriers within hiring.
Not everyone in the industry has caught on as to the need for – and the competitive advantage of – diversity and inclusion. Take for example the wage gap between men and women in financial services: it currently stands at 22%, with the gap growing to 46% for bonuses. Meanwhile the number of BAME employees who are in senior or significant management positions in the sector is just 6%.
While this suggests progress might not be as fast as some people would like, others believe that positive change is inevitable and inexorable. As Jane Ayaduray, Head of Diversity and Inclusion at BNP Paribas UK says, “Organizations are recognizing the inherent risks of a lack of diversity, and there are a lot of people who seek out a diverse and inclusive workplace. The world has changed and businesses which don’t, or don’t want to reflect that, are at real risk of being left behind.”
Leading the change
We’ve surveyed some of the key brands in financial services that are driving diversity within the sector forward. What’s clear is that progress depends not just on the commitment and buy-in of senior management, but the imagination and thought given to conceiving, then implementing policies that both act as a beacon to the outside world, but also to change culture within organizations.
BNP Paribas has been at the forefront of diversity and inclusion within financial services for years. By establishing a dedicated team of 35 diversity officers 15 years ago, it was able to achieve a target of having 25% of senior management positions held by women early in 2014.
Since then it has won numerous awards including the Top Employers Europe label, awarded for outstanding employee conditions, and its nurturing and development of talent, for five years running.
Explaining how BNP Paribas approaches diversity and inclusion, Ayaduray explains that it begins with a simple premise. “It starts with asking how do we do our business in the right way? Making sure that we’re managing our risk, treating people with respect, and reflecting the diverse needs of our clients and customers.”
The bank also runs diversity and inclusion weeks to increase awareness of the importance of corporate diversity. There were over 70 events held in the UK alone during October 2018, while thousands of employees participated in events worldwide.
With an impassioned philanthropist at the helm, it comes as no surprise that the financial information provider Bloomberg is one of the leaders when it comes to corporate inclusivity. In 2015, when he returned to lead the firm he founded, Michael Bloomberg launched a company-wide review of its gender diversity. Since then the business has established several initiatives to encourage diversity and acceptance, including setting up communities for disabled, black, Latino, LGBT, military veteran, Pan-Asian and female employees, as well as working families. It has also appointed a Chief Diversity and Inclusion Officer, and a global Diversity and Inclusion team.
Bloomberg isn’t just focusing its efforts internally. It has launched a Financial Services Gender-Equality Index, to aggregate data on gender stats, employee policies, gender-conscious product offerings and external community support and engagement activities for other companies and investors. It’s also started an initiative called Women’s Voices, which aims to increase the number of female experts and officials quoted in Bloomberg’s own media channels.
Lloyds Banking Group
The UK-based retail banking group has put its efforts in improving diversity and inclusion front and center of its brand image. For example, its #GetTheInsideOut campaign, promoting conversation around mental health, put together in partnership with Mental Health UK, included national television advertising and was crowned as one of the Best Campaigns of 2018 by Marketing Week.
Lloyds has also been heavily involved in Channel 4’s #PurpleLightUp campaign, raising awareness around disability, commissioning a report into how advertising reflects modern Britain, with a focus on inclusion and diversity. It has also been a sponsor of the Pink News Awards for the last three years.
Away from marketing, the bank has been holding focus groups with disabled customers to improve the inclusivity of its products and customer service, as well as running a series of events promoting diversity, such as Diversity By Default and Women of the Future Ambassadors.
RateSetter signed the Women in Finance Charter in 2017, and a number of its employees appeared on the recent Innovate Finance’s Women in Fintech Power List.
Crowley describes RateSetter’s approach to diversity as vital to the business. “RateSetter has been built on inclusion and a new way of investing and borrowing money,” he says. “We’re very keen on opening investment up to the population of the UK making it accessible as possible. That means a very diverse population can invest. So it’s important that when you think about your employees that you reflect the kind of investors that you want to reach.”
He also points to the need for the sector to become more broadly like the people they’re trying to woo, in a business sense. “That’s one of the criticisms being levelled at the financial services sector – they don’t represent the customer in any way shape or form. There’s a real opportunity for fintechs, like RateSetter and newer businesses, to be more like the customer base they’re serving.”
As well as signing the Charter, RateSetter has made significant commitments to the number of women in its senior teams, aiming to improve the on the quarter of its workforce at senior levels that are female.
Stripe sits at the intersection of two industries – finance and technology – often cited as challenging when comes to improving diversity within them. Rather than relying on setting itself initiatives and targets, it is trying to embed positive attitudes towards diversity and inclusion into its day-to-day culture.
Techniques to try and do this have included a high-profile experiment where Stripe turned its recruitment processes upside down. “Bring Your Own Team” encouraged potential employees to apply for jobs together in a bid to increase diversity in employment. The scheme saw people applying in more diverse groups, such as husband and wives – but ultimately it didn’t have the intended impact and was scrapped after a year; as it turned out, people still were more likely to apply for a job on their own.
However, this willingness to think differently about recruiting is a testament to Stripe’s desire to develop a diverse and inclusive environment. It also has a diversity recruiting program lead, who amongst other things advises on how to adjust the interview process so as to avoid the risk of stereotyping candidates.
Stripe’s efforts at creating an inclusive culture have been supported by its hiring of Susan Fowler, who blew the whistle on a non-inclusive culture at Uber, including allegations of sexual harassment. She joined Stripe in 2017 as editor-in-chief of its quarterly publication Increment. Fowler is also an advisor to AllVoices, an anonymous reporting tool that enables employees to report harassment, bias and culture issues.
Other top performers
The UK’s biggest banking group appointed Alison Rose as Deputy Chief Executive, its first female boss, in December 2018, which has been heralded as marking a significant step forward in its inclusion efforts, which are regarded as relatively advanced; 87% of staff say the organization is doing a good job at supporting diversity. It has featured on The Times’ Top Employers for Women every year since the list’s inception.
Virgin Money UK
The Women In Finance Charter is led by the bank’s CEO, Jayne-Anne Gadhia, who practices what she preaches, with women representing 29% of its senior management roles. It also has a shared parental leave policy.
The platform for taking recurring payments has 9% of its workforce identifying as LGBTQ, comfortably above the 4% that is the benchmark in the UK. It also hosts Trans*Code London, an event drawing attention to transgender issues and opportunities. In addition, 25% of its senior leaders are female.
40% of the global credit card giant’s senior management are female, and perhaps because of that it has been focused and open about the company’s gender pay gap. For every $1 earned by men in the business, $0.991 is earned by women. MasterCard is also heavily involved in promoting diversity in its technology teams. It has entered into an employer partnership with US-based educational non-profit LaunchCode to hire more women into technology roles, and founded the global initiative Girls4Tech to encourage girls to take up science, technology, engineering and mathematics (STEM) subjects.
Bank of America
Bank of America has been one of the leaders in pioneering greater diversity in its corporate governance, with 46% of its independent board of directors being female. It also has partnerships with the UK-based technology education programs Code First: Girls and STEMettes, designed to encourage greater numbers of women to take up careers in technology. It is also involved with mentorship programs with Vital Voices and the Cherie Blair Foundation.
How can financial services brands become more diverse and inclusive?
Becoming more diverse and inclusive is not a one-off, easily accomplished task, according to Dr. Gonzalo Shoobridge, Head of Action Consultancy at Great Place To Work, who specialize in surveying companies worldwide to measure and help advise on what makes a great workplace. It has to be thought of much more as a process.
He adds that many financial organizations are good at constructing a diverse workforce, however, many may have not yet figured out how to create an atmosphere in which all people feel valued and respected and have access to the same opportunities.
The key for the success of any diversity and inclusion initiative is that it needs to be driven by the most senior people in the organization. HR has a big role to play and is a huge partner in the whole corporate D&I initiative, but diversity and inclusion has to be owned and championed by the business as a whole. If it is not owned by the business, if it is not aligned with corporate strategies, mission and vision, then this initiative will not be sustainable and simply will not achieve its corporate aims and objectives.