Why Ignoring Women Is Costing Financial Services Money

By David Gillespie and Jessica Clempner.
This article first appeared on 
World Economic Forum Agenda on November 15, 2019.


Over the last 10 years, achieving gender balance in financial services has remained a challenge across Europe and worldwide, with the industry still male-dominated, particularly at senior level. While there are now more women in senior leadership roles globally than ever before, progress has been incremental, and there is still a long way to go – something made clear by the new Women in Financial Services Report 2020 from management consultancy Oliver Wyman. Increasingly, this lack of gender balance is to the industry’s commercial detriment.

1.                          Halfway to success

Within Europe, we are used to seeing high-profile female leaders in the sector, perhaps best exemplified by Christine Lagarde. In certain places, the situation on the surface appears positive. In the UK, for example, milestones such as Alison Rose’s recent appointment as chief executive of RBS, and the 30% Club’s role in achieving increased representation of women on FTSE 100 and FTSE 250 boards, have been profiled as heralding much-needed change.

However, the numbers tell a different story. Across Europe, representation on executive committees has increased, now standing at 20% and for boards at 29%, according to Oliver Wyman. But the range is broad: from 33% female representation in Sweden, to just 6% in Greece.

Representation of women on executive committees by country (%)

Image: Women in Financial Services Report 2020, A Panoramic Approach

2.                          A panoramic approach

It’s clear that the work that got us this far is not going to take us to the next level. In the report we also find that, to deliver the next wave of change, the industry needs to recognize that the impact of gender balance goes beyond the workforce. There is at least a $700 billion global revenue opportunity in better serving women as customers.

In the context of a rapidly changing and highly uncertain political and economic landscape, it is not overstating things to describe the situation as critical. Gender balance is recognized as vital to success, but at this point for many organizations it is essential to a firm’s survival.

To close the gap, capture revenue and promote sustainable business, more needs to be done. This means taking a broader approach than has traditionally been the case and ensuring that the journey towards balance internally also extends externally to truly catering for women as customers.


3.                          The revenue opportunity

Women are arguably the single largest underserved group of customers in financial services. Despite playing increasingly influential roles as buyers of products and services, their needs are not consistently being met. As a result, firms are leaving money on the table by not listening to and understanding their women customers.

The scarce funding going to female-led companies in the small- to medium-enterprise (SME) space, and the historic bias towards a male career trajectory in wealth and asset management, have been well documented. But our research also shows gaps in the way insurers, retail banks and corporate and institutional banks are serving women as customers.

Lack of flexibility, combined with products and services that appear gender-neutral, but that in fact default towards men, can result in a gap in the way retail banks are serving women. .

At the global level, our analysis indicates that $65 billion could be generated for banks through mortgage and other credit approvals to existing retail customers, if women were approved at the same rate as men.

This is along with $30 billion in net interest income through loans for female-led SMEs. Similarly, today, women invest more of their wealth in cash than stocks and bonds, compared to men. Wealth and asset managers could see $25 billion in new fees by helping women manage their investments in the same way as they do for men.

Furthermore, if insurers sold life insurance to women at the same proportion of their income as men, an extra $500 billion in new written premiums could be generated. In corporate and institutional banking, $80 billion of existing revenue could be at play if banks better managed their relationships with women clients and won share from competitors.

Redressing the gender balance is not just good for society or a particular firm, it is good for business, full stop.

4.                          Closing the gender gap isn't an added plus

Operating in such volatile and fast-changing times as they face today, financial services firms cannot afford to overlook women, in the workforce or as customers. In Europe, headwinds will only likely increase in the near term, with the possibility of recession all too real. Historically, when the economy takes a downturn, gender balance gets put on the backburner, seen as a “nice to do” rather than the “must do”, as our analysis highlights.

At the very least, organizations would do well to recognize that increasing the proportion of women on leadership teams is likely to be a major contributor to crisis resolution in terms of increased cognitive diversity and enhanced creativity.

Cultural changes brought about by greater gender balance can aid not just internal decision-making, but also customer product development as firms work to understand and reflect the needs of all stakeholder groups, including customers. This involves actively generating and looking at the data from a different perspective, then pulling this through into a reorientated proposition. This could be anything from life insurance that takes into account unpaid domestic work, flexible goal-based wealth advice or mortgages with payment holidays for parental leave. Ultimately, these propositions will be better for all customers, not just women.

Similarly, in acting more on gender balance and bias, firms are likely to see a positive impact on everything from staff morale and talent influx, to brand and reputation. Internally, a gender-balanced workforce makes for a more effective business. Externally, firms will help to promote equality in society overall.

Ultimately, in taking a more panoramic approach, gender balance will become central to each firm’s purpose, customer service, business strategy and brand. As result, it will no longer be a choice for the CEO, but a key part of their mandate.