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Challenged world is alert and from challenge comes change

As we celebrate the 2021 International Women’s Day (IWD) under the theme #ChooseToChallenge, and focus on inclusion and diversity, we reflect on the representation of women in the banking industry.

Sibongile Moyo

Financial intermediation services offered by banks play a significant role in most economies with value-added contribution to gross domestic product (GDP), ranging from 5-15%, and corresponding impact on employment.

The core of the inclusion agenda is achieving gender equality and empowering all women and girls under the sustainable development goal (SDG) number 5 of the 2030 United Nations Agenda for Sustainable Development.

Globally, women make up 52% of banking sector employees, thus portraying a picture of equal representation. Unpacking this simple statistic reveals a funnel effect where women average 38% of middle management and 16% of bank executive committee members, according to Professor Michel Ferrary’s 2018 Gender Diversity in the Banking Industry report.

The study examined the female representation of 71 banks in 20 countries and found that women in the global banking sector are faced with a “double glass ceiling” effect, where, of those who reach middle management, far fewer are able to ascend further to executive roles.

The phenomenon is slightly reversed on bank boards of directors, where women are better represented due to quota-based diversity standards imposed to mitigate risk. These standards observed on boards of prominent banks are a result of numerous studies that portray women as less likely to gamble with assets. Notably, women were conspicuous by their absence from the leadership of the worst offending firms during the 2008 global financial crisis.

The 2020 edition of the Oliver Wyman Women in Financial Services report shows positive strides in inclusion, with 20% representation of women on executive committees and 23% on boards.

However, this masks the nuance that only 6% of the chief executive officers of the largest global financial service firms are women and that the largest global banks are led solely by men. In South Africa, home to the largest banks in Africa, there are currently no women among incumbent bank CEOs, with two women having been at the helm of South African banks in the last decade.

Within the Bankers Association of Zimbabwe (BAZ) stable, of 17 financial institutions with 13 commercial banks, two building societies, one savings bank and one infrastructure development bank savings banks, we currently find one woman-led institution. In the local banking industry, women constitute 42,7% of bank employees, with three quarters occupying non-managerial roles, and with three out of every 10 executive committee roles being held by women.  Over the last two decades, there have been five women CEOs of commercial banks under the BAZ.

When we conduct a deep dive into the composition of bank executive committees, we find even fewer women in the high-powered roles dominating value on the balance sheet and with potential for ascension to the chief executive role.

This picture reflects exclusion of women from real decision-making influence in financial institutions and accentuates inequality. With automation and digitalisation trends, women who dominate frontline retail and customer service roles may become casualties of optimisation initiatives, further reducing their representation if we do not choose to challenge and lead inclusive change.

What can we do to achieve a gender balanced banking industry following the recruitment process, which at the outset should be conscious about gender representation?

We have to be intentional about mentoring, sponsoring, coaching and exposing young professional women to networks that will build their career prospects progressively.

We have to be intentional about co-creating career paths that lead to inclusion of high potential women in the senior executive roles within the core business of the bank and with leadership span of control, away from the old preserve of women in enabling functions and corporate services.

With the increasing dominance of technology in banking, we must sponsor, mentor and coach women in STEM programmes to generate the pipeline of women with technology skills and leadership efficacy and confidence to lead banks.

With the new ways of work characterised by changed management styles, flexible work hours and remote working, we find retention and inclusion opportunities for women by reducing barriers to career growth as they navigate various stages in family life. We need to set internal goal commitments for gender inclusion and career mobility and measure these while being held accountable for their performance at management and at board level.

Finally, as women we must lead from the front and be role models by raising the voice and visibility of fellow women within financial institutions, thereby giving them currency and creating tangible succession.

Moyo is the managing director of Nedbank Zimbabwe, councillor of the Institute of Bankers of Zimbabwe (IOBZ) and member of the Bankers Association of Zimbabwe (BAZ).

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