Diversity of thought and inclusiveness will drive innovation at all levels of financial services, including in wealth management, this article argues.

A few weeks ago, there was a flurry of commentary around issues affecting women in the world of work, including wealth management and financial services. (See this example here.) As readers know, technology is changing the face of financial services, hopefully for the better in some ways. What is being done to ensure that the so-called digital revolution takes account of women's interests? In this article, Tamara Van Den Ban, who is head of product management, ASP, at HSBC, considers this question.

The editors of this news service are pleased to share these views with readers and invite responses. Please email tom.burroughes@wealthbriefing.com.

The need to go digital is one of the biggest challenges facing companies today, including the financial services industry. Growing competition from new financial technology companies is increasing the pressure for established banks to innovate.

To make the move to digital effectively, banks need to transform from traditional ways of doing business. Part of this change will involve finding people with the necessary technological know-how, agile experience and a collaborative mindset to develop new products and solutions and fix broken processes.

But in addition to hiring the right people and acquiring the right skills, companies also need to evolve their culture to build diverse teams where original thinking can flourish. A company that fosters diversity draws from a greater pool of ideas which presents new opportunities that benefit both the company as well as its customers. Without it, unconscious associations can make thinking less diverse, which could affect a company’s bottom line.

The most obvious proxy for diversity of thought is gender. Research has shown that companies in the top quartile for gender diversity are more likely to have financial returns above their national industry medians. More specifically, gender-diverse companies are 15 per cent more likely to outperform those in the bottom quartile (1).

If women are not part of the innovation process, then half the world’s population is ignored. This is especially relevant for consumer-oriented companies, as women have a disproportionately large influence on household spending.

The challenge is that the level of female representation in technology jobs is low. In the US, which is home to many of the world’s largest and most successful online brands, women occupied only 25 per cent of all computing jobs in 2015, according to the National Center for Women and Technology (2), despite holding 57 per cent of all professional occupations. Move higher up the corporate ladder, and the picture gets even worse, with just 5 per cent of leadership roles in technology held by women.

Whilst not all candidates for digital roles come from STEM subjects, a look into this area can offer insights into the pipeline of gender-balanced candidates that are entering into the digital environment. According to the 2015 Hong Kong Diploma of Secondary Education Examination figures (3), male students who studied information communications technology at exam level surpassed the number of women by almost three times. A new study by The Women's Foundation (4) revealed that many girls in Hong Kong associated science, technology, engineering and math (STEM) subjects with dry concepts and mechanical exercises, and as a result found them boring.

Once within the industry, there are problems retaining women, with data suggesting that technical sectors are less hospitable to female employees. A survey conducted by researchers at the University of Wisconsin-Milwaukee (5) found that close to 40 per cent of women that acquire engineering degrees either leave the profession or never enter the field in the first place. Participants cited poor treatment by managers and colleagues, as well as a bad workplace environment as reasons for quitting the industry.
 

The disproportionate number of women graduating from STEM courses, as well as the huge retention issues once in the industry, makes it a real challenge for those that want to build diverse teams in this space.

This suggests the need to focus efforts on building more inclusive teams and environments to enable women to thrive in typically male-dominated industries. Failure to properly address these issues could impede a company’s progress in the digital arena.

In the past two years, we have built out our digital team in Asia from a handful of people two years ago to over 200 today. Half are women. But it has not been easy to get to where we are, and maintaining this balance will require continued hard work.

We focused our efforts on both the hiring process as well as the importance of inclusivity.

In our retail bank, for instance, we aim to achieve gender balance at the very beginning of the employee lifecycle when sourcing candidates for new job vacancies. To retain women we have programmes in place to train managers about unconscious bias, we embed mentoring programmes, we reinforce merit-based hiring and promotions, and we reward our people for inclusive and collaborative behaviour.

As banks transform for the digital age, diversity and inclusion goes far beyond a human resources issue. It must become part of the company’s culture and weave through everyday working life, from the way that a person is considered for a job to the way that a manager runs a meeting.

This diversity of thought and inclusiveness will drive innovation at all levels. And, in the digitally-driven future of the financial services industry, the future leaders of banking will be those who win the race for innovation.

Notes and references:

1, http://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters
2, www.ncwit.org/sites/default/files/resources/womenintech_facts_fullreport_05132016.pdf
3, 2015 Hong Kong Diploma of Secondary Education Examination
4, https://twfhk.org/sites/default/files/u21/Girls%20and%20STEM%20Education%20in%20Hong%20Kong_One%20Pager.pdf
5, http://www.apa.org/news/press/releases/2014/08/women-engineering.aspx