Women Employees are Developing Diversity in the Banking Industry

Studies paint a mixed picture of women in finance. Though the percentage of men and women entering the field is roughly equal, men typically rise to the top faster than women do. For example, among senior roles in venture capital (VC) firms, only 4.9% of the partners are female. The picture doesn't get much rosier when it comes to private equity (PE), in which fewer than 10% of senior roles are held by women. On the bright side, there is a greater focus on improving diversity, and the overall percentage of women joining VC, PE, and hedge fund firms is rising.

More than three-quarters of employees (76%) say that their bank is very inclusive or inclusive for women—the highest inclusion rate of any group. To put that percentage in context, only 45% of respondents think that their bank is very inclusive or inclusive for physically disabled employees and only 60% say it’s inclusive for LGBTQ+. While the bulk of survey respondents (73%) think organizations make better decisions when there is employee diversity, men and women do perceive DEI differently (see Figure 2). When asked how important it is that banks evaluate or address a lack of DEI, women were more likely to say it is essential (84% versus 65% of men). And while 92% of men say their company is inclusive to women, only 78% of women agree.

Regarding gender equality, there are a few reasons why women may not advance to the top ranks as quickly as men. One is a lack of role models. Without more women paving the way, those entering the field may find the path more challenging or may not even know there is one. Some women have voiced concern about work-life balance, while others simply cite the lack of manager support.

Many women in finance cite a lack of role models or mentors as a major deterrent to pursuing their careers. Research has shown that mentoring programs can boost minority representation in managerial positions by about 9% to 24%.  Moreover, female mentors can smoothly guide their mentees up the corporate ladder by helping them learn such skills as emotional intelligence, making connections, and effective communication.

At the beginning of 2021, the representation of women and women of color in the financial-services workforce had increased across all ranks above entry-level, compared with 2018. While women have a slight edge at the entry-level (comprising 52 percent of the industry workforce), their representation falls off at every step of the corporate pipeline. This slide is particularly steep for women of color (Black, Latina, Asian1 ): from entry-level to the C-suite, the representation of women of color falls by 80 percent. The highest levels of corporate leadership are still dominated by men, though women have made notable gains in the past three years. During that time, the share of women grew by 40 percent at the senior vice president (SVP) level and 50 percent at the C-suite level—though this increase is off a low starting point. Despite progress, 64 percent of financial-services C-suite executives are still White men, and 23 percent are White women—leaving just 9 percent of C-suite positions held by men of color and 4 percent by women of color.