Home Banking Unpacking the Data: Why Diversity Should Not Be an Afterthought in Banks

Unpacking the Data: Why Diversity Should Not Be an Afterthought in Banks

by internationalbanker

By Sheila Flavell CBE, Chief Operating Officer, FDM Group

 

It is vital that banks recognise the power of diversity as a driving force for progress and resilience. Today, embracing diversity in all its forms is imperative for financial-services firms that are striving to excel.

It is an increasingly important issue to the workforce, and banks must catch up. In a recent survey, 76 percent of employees and job seekers said that diversity was important to them when considering job offers, while 80 percent said they wanted to work for a company that values DEI (diversity, equity and inclusion) issues.

The value of diversity extends beyond the promotion of equality and inclusivity; it brings tangible benefits to the organisation and wider society.

Research from BCG (Boston Consulting Group) has shown that when employees believe that DEI programming is a priority in their workplaces, the number of happy employees increases by 31 percentage points.

As we stand at the intersection of technological advancements, changing demographics and evolving customer expectations, banks that fail to embrace diversity risk falling behind their competitors. The financial-services industry is undergoing major digital transformations to improve operations and keep up with customer expectations, and as a skills shortage prevails, tapping into underrepresented groups who offer diverse skills and opinions will only promote the innovation needed.

In our economic landscape, in which innovation and adaptability are crucial, diverse teams offer the agility and insight necessary to navigate an increasingly complex financial landscape. Solving the diversity gap faced by businesses in the financial-services sector is not an overnight task, but it is important to deliver constant progress toward the goal of creating a diverse workforce.

Unpacking the data

FDM Group, a strategic talent-solutions partner, recently conducted research polling 250 decision-makers at financial institutions and banks in the United Kingdom via the independent polling agency Censuswide to measure the current state of diversity and digital-skill levels in the sector.

The research revealed the inadequacy of businesses’ support for and engagement with diversity, equity and inclusion. The findings showed that 70 percent of staff believed that diversity, equity and inclusion were an afterthought in the financial-services industry. And despite the firms claiming DEI as a priority, 69 percent of their staff said they did not reflect it in practice. Two-thirds also claimed that financial-services institutions don’t do enough with diversity policies.

More than four in five financial institutions had female representation at the C-Suite level. However, it was also revealed that two-thirds of those surveyed didn’t believe the sector supported people returning to work after having children, with limited flexibility and parenting schemes available. Financial services claim to prioritise DEI; however, the research highlights that these claims often amount to nothing more than empty promises.

Despite the current lack of DEI in businesses, the research also revealed that 84 percent of those surveyed believed that investing in diversity, inclusion and equity would boost the overall productivity of their organisations. Equally, 84 percent suggested that their organisations would benefit from greater diversity in staff recruitment.

What could better DEI mean for financial services?

A diverse workforce contributes to a more inclusive and supportive work environment, which, in turn, positively impacts staff satisfaction. Feeling represented and valued within an organisation can lead to higher engagement, productivity and innovation. Moreover, improved staff satisfaction has a domino effect on the organisation’s overall success. Satisfied employees stay longer within the company, thereby reducing turnover rates and diminishing recruitment and training costs.

Equally, when a business demonstrates its commitment to diversity, it sends an explicit message that it values the unique contributions of individuals from all backgrounds. This, in turn, draws in diverse talent seeking an inclusive and diverse work environment. In this way, diversity within businesses has a magnetic effect, attracting diverse talent and driving positive change. Diversity breeds diversity, meaning organisations should prioritise it now to enjoy a diverse array of employees in the future.

Within financial services, diversity acts as a catalyst for innovation, propelling the industry forward. Upon embracing diversity, banks and financial institutions unlock a wealth of unique perspectives, experiences and skills that power creative thinking.

By fostering an inclusive environment, institutions can create fertile ground for innovative solutions to flourish. Focusing on DEI will ultimately give businesses competitive advantages, promoting innovation while opening up more opportunities to fill vacancies.

Solving the skills gap

Promoting DEI promises many benefits, including solving the skills gap. Recent social and economic pressures have meant that the digital-skills gap in the UK has worsened significantly. And with the rapid increase in technological advancements, the demand for digital skills is higher than ever. Organisations are searching for candidates holding the necessary digital skills but have too often overlooked untapped talent pools with an aptitude for tech skills.

Given the significance of the skills gap, consider how the promotion of DEI can aid in bridging the gap—for example, through investment in women. Research from Tech Nation revealed that women make up just 26 percent of the tech workforce in the UK, in comparison to 50 percent across the rest of the labour market, highlighting the current issue of gender diversity in the technology sector but also the opportunity for organisations to address the digital-skills gap.

Women, ethnic minorities, neurodivergent people and many other groups face barriers when breaking into the technology industry regarding opportunities, tech skills and workplace support. Additionally, women are among the many who take time out of work for reasons such as caring for a child, looking after elderly parents or pursuing an individual passion. The research highlights that individuals are not always supported back into the workplace, meaning a focus on welcoming returners, who often hold transferable skills from past jobs and can be retrained, should be prioritised.

Organisations must re-evaluate their approaches to hiring and upskilling and their support schemes to tap into the wide pool of candidates who show proficiency in digital skills. Doing so will help bridge the skills gap and boost productivity across the tech sector, enabling growth.

What can organisations do to improve their approaches?

As the polling suggests, businesses and financial services must improve their approaches to DEI. To realise the benefits, financial-services firms must actively cultivate a culture of inclusion and provide support systems for employees from underrepresented groups. This must start at the educational level, offering greater guidance on technology subjects and the many opportunities and career paths this sector offers while breaking down existing stereotypes.

When individuals look to join or re-join the technology industry, organisations should be prepared to make this transition unbiased and supportive by breaking down existing stereotypes. This includes implementing fair hiring practices, providing diversity and inclusion training, creating affinity groups or employee-resource networks, and establishing open and transparent communication channels.

Additionally, leadership must demonstrate a genuine commitment to DEI, setting the tone from the top and fostering an environment in which diverse voices are not only heard but also empowered to influence decision-making processes.

The road ahead

The data is clear: Diversity should no longer be an afterthought in banks and financial institutions. The research conducted by FDM Group has showcased the harsh reality that diversity, equity and inclusion remain inadequately supported, with a lack of implementation within the financial-services industry.

However, the benefits of embracing diversity cannot be overlooked, and action must be taken to reap the social and economic benefits inherent in DEI.

Financial services and banks must embrace diversity as a strategic imperative, recognising and engaging with its potential to drive innovation, enhance staff satisfaction and shape a more inclusive and prosperous financial future.

 

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