As a female-led business, The Wisdom Council has experienced first-hand the lack of diversity in financial firms and the challenges that can bring. To be truly effective companies need diversity of thought and approach at every level in the organisation.
The lack of diversity is at the top of the news agenda with the Bank of England, PRA and FCA joining forces to tackle the issue head on with senior management through DP 21/2: Diversity and inclusion in the financial sector – working together to drive change. We firmly believe that to be truly effective companies need diversity of thought and approach at every level in the organisation – and we have shared our thoughts with the regulator:
- An open, inclusive culture is one that nurtures mutual respect
- ESG is shining a light on those in the industry that have been slow to react
- Employees should feel that their voice will be heard
- Sustainable finance initiatives link directly to diversity
- Diverse and inclusive teams are essential if firms want to stay relevant
An open, inclusive culture is one that nurtures mutual respect
Such a culture demonstrates a willingness to accept constructive challenge and encourages people to forge ideas through debate and collaboration. Put simply, diverse boards have richer conversations, can see challenges from more perspectives and respond in more creative, more constructive ways. This is why regulators link conversations around diversity to stronger and more effective governance, and ultimately better consumer outcomes. There is plenty of evidence out there to demonstrate that diversity works – for organisations, customers, employees and ultimately shareholders.
ESG considerations are shining a light on parts of the industry that have been hitherto slow to react
Firms need to have a clear idea of their own stance on ESG and how that feeds through into their D&I responsibilities, both in their role as corporate entity and employer, and in their wider role across the industry value chain.
Employees should feel their voices will be heard and that they will get the same opportunities as everyone
We work with Women in Banking and Finance and the London School of Economics on their four-year Accelerating Change Together (ACT) programme. We found that one of the greatest barriers to career progression and, therefore, retaining women in the industry is a perceived lack of equality of opportunity. Women do not feel they are given the same opportunities to progress that men are given.
Nor is this just a gender issue – just this week the Guardian carried a headline reporting that ‘Most ethnic minority finance workers suffer discrimination’. There are similar challenges across a whole spectrum of diversity and difference. There has to be room for talented individuals of whatever background to thrive if the industry is to modernise and embrace future generations of customers.
It matters – the financial services industry is central to the financial future of the UK population
The role of financial services providers has never been more important to the financial wellbeing of the nation. Understanding the target market for products, what makes people tick and being able to engage effectively is critical to increasing savings rates in the UK. Customers want to see themselves represented – and not just in advertising, but in the people they come across in the financial services firms they deal with.
Our work on the Yes She Can sustainable finance initiative links directly to diversity
One of the key things that fell out of the early stages of the Yes She Can project is that women simply do not see finance as a female domain. Women see the investment industry, in particular, as designed ‘by men for men’. This gives rise to a deep-seated belief among many women that ‘people like me’ don’t invest.
Diverse and inclusive teams are essential if firms want to stay relevant in a rapidly-evolving world
In the long-term savings industry, customers span an interwoven and complex mix of gender, sexuality, ethnicity, disability, age, neurodiversity and social background.
Without an understanding of the diversity and nuanced behaviours of customers, how can the industry communicate with customers in their language and in their world? A broader perspective helps meet customer needs – through adaptation and innovation. As the calls for change grow louder in the society it serves, the finance industry needs to confront the realities of where it is today and work together to drive meaningful progress.