New data from Pinsent Masons shows that as the high-level financial services industry grows, so does the gender gap, with fewer women being approved for senior roles.
Only 26% of female applicants were approved under the Financial Conduct Authority’s (FCA) senior managers regime (SMR) in 2018/19 despite the number of female applicants rising 57% in the same timeframe.
However, the number of male SMR applicants also increased, rising 64% from 2017/18 to 2018/19.
Elizabeth Budd, partner at Pinsent Masons, said: “The problem of a long-term lack of senior women within the financial services sector is obviously never going to be solved in a single year. However, for the industry to actually take a step backwards over the past year is disappointing.”
Controlled function roles, which covers a range of regulated mid-level financial services, have seen an uptick in female applications for FCA approval, rising 3% from 2017/18 to 2018/19.
While male applications for the same rolls fell 1% in the same period, there are now 15,961 men working in controlled function roles – a far cry from the 3,598 women currently working in those same roles.
However, while the positive trend shows a narrowing of the gender gap for those FCA-approved positions, other financial roles are continuing to be male-dominated this year.
While gender diversity campaigns are being implemented across the industry, it is telling that there are still no female chief executives operating in the FTSE 100 financial services sector—and the six FTSE 100 female chief executives that do exist only make 54% of what their male counterparts earn.
“Female leaders in financial services are not going to appear fully formed – they must be mentored, promoted and allowed to flourish from middle management levels,” Budd said.
Budd also noted that firms need to commit to introducing cultural change in the financial services industry, with programs like the Treasury’s Women in Finance Charter helping to bridge the gender pay gap.
The charter asks companies to set targets for senior-level gender diversity, tie the pay of senior executives to these targets, have a senior executive responsible for both diversity and inclusion, and to publish their progress annually.
Making promises to change
Although over 200 companies have signed onto this charter, data from New Financial shows that only 28% of signatories have met their goal for introducing women into senior management.
While companies are making progress on the initiative, the charter’s target is not set to be hit until 2022, with banks needing to reach the highest numbers.
“It’s heartening to see that this process has begun in the sector,” Budd said. “Those firms that remove the structural barriers that prevent women reaching senior levels will find that their leadership will organically achieve a better gender balance over the next five to ten years.”
2019 research from Catalyst shows that globally, women only hold 12.2% of chief financial officer roles, with women of colour facing more challenges when seeking out their first promotion.
Although multinational firms and banks have pledged to make changes to their hiring processes and promote gender diversity, only time will tell what their impact will be on bridging the gender gap.