The banking, financial services, and insurance (BFSI) sector is a cornerstone of economic development and stability. Yet, it remains a domain where gender disparity is prevalent, with women underrepresented in various roles, especially at senior levels. Hiring more women in BFSI is not only a matter of equity but also a strategic move that can have far-reaching positive effects on the economy and society.
BFSI sector and women employment: The current landscape
Despite progress in recent years, women still face significant barriers in the BFSI sector. According to a study by Oliver Wyman, women hold only 20% of executive committee positions in major financial services firms globally (Oliver Wyman, 2020). This underrepresentation is a missed opportunity, as diverse teams drive better decision-making and innovation.
BFSI sector should hire more women: The economic ripple effect
1. Increased earning power
When women enter the workforce, particularly in well-paying sectors like BFSI, their earning power increases. It leads to greater financial independence and improved living standards for themselves and their families. A report by McKinsey & Company indicates that closing the gender gap in labour force participation could add $12 trillion to the global GDP by 2025 (McKinsey & Company, 2020).
2. Enhanced investment in education and health
Women tend to reinvest a significant portion of their income back into their families, particularly in education and healthcare. According to a World Bank report, women reinvest 90% of their income into their families compared to 30-40% for men (World Bank, 2018). This investment helps to break the cycle of poverty and improves the prospects of the next generation.
3. Increased financial inclusion
Women in financial services can drive initiatives that increase financial literacy and inclusion among underserved populations, particularly other women. The Global Findex Database highlights that women are more likely than men to be financially excluded (World Bank, 2021). By hiring more women, BFSI companies can develop products and services that cater specifically to women’s needs, thereby expanding their customer base.
Why the BFSI sector should hire more women
1. Diverse perspectives drive innovation
Diverse teams bring a variety of perspectives, which can lead to more innovative solutions and improved financial products. A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues due to innovation (Boston Consulting Group, 2018).
2. Improved risk management
Research has shown that gender-diverse teams are better at managing risk. A study by the International Monetary Fund found that banks with higher gender diversity on their boards had greater financial stability (IMF, 2018). It is particularly crucial in the BFSI sector, where effective risk management is essential.
3. Enhanced reputation and brand loyalty
Companies that prioritise gender diversity often enjoy a better reputation and stronger brand loyalty. Consumers are increasingly making purchasing decisions based on a company’s commitment to social issues, including gender equality. Hiring more women can enhance a company’s image and appeal to a broader customer base (Deloitte, 2020).
4. Better talent retention and employee satisfaction
Gender-diverse companies tend to have better employee retention rates and higher job satisfaction. According to McKinsey & Company, companies in the top quartile for gender diversity are 21% more likely to outperform on profitability (McKinsey & Company, 2020). By fostering an inclusive workplace, BFSI companies can attract and retain top talent.
The final thoughts on why the BFSI sector should hire more women
The BFSI sector stands at a crucial juncture. By hiring more women and fostering an inclusive culture, financial institutions can drive economic growth, improve their bottom line, and create positive societal change. The ripple effects of increased female participation in BFSI are profound, extending beyond the workplace to impact families, communities, and the global economy.
As we move forward, the BFSI sector must recognise the immense value that women bring and take proactive steps to bridge the gender gap. By doing so, we can create a more equitable and prosperous future for all.
Research sources
- Oliver Wyman (2020): Women in Financial Services 2020
- McKinsey & Company (2020): How COVID-19 Has Affected Gender Equality
- World Bank (2018): Women, Business and the Law 2018
- World Bank (2021): Global Findex Database 2021
- Boston Consulting Group (2018): How Diverse Leadership Teams Boost Innovation
- International Monetary Fund (IMF) (2018): Economic Gains From Gender Inclusion: New Mechanisms, New Evidence
- Deloitte (2020): The Gender Dividend: Making the Case for Investing in Women
These sources provide a robust foundation for understanding the benefits and implications of increasing female participation in the BFSI sector.
Disclaimer: The views expressed in this article are based on the writer’s insights, supported by data and resources available both online and offline, as applicable. Changeincontent.com is committed to promoting inclusivity across all forms of content, which we define broadly to include media, policies, law, and history—encompassing all elements that influence the lives of women and gender-queer individuals. Our goal is to promote understanding and advocate for comprehensive inclusivity.
