Women are increasingly breaking through barriers and achieving great success in various industries. The sad reality though is that the number of women working in finance remains shockingly low. Sadly still, it may not change so soon.
According to Deloitte Insights, in 2030, only 31 percent of financial sector employees will be women. This begs the question: why are so few women in finance? There are many theories out there, but we wanted to hear from an expert on the matter. That’s why we interviewed Farnoush Farsiar, an accomplished finance professional who is passionate about women empowerment.
How Many Women are there in Finance?
In the U.S., women make up 57% of the workforce, but they hold only 24% of financial jobs. That’s is projected to expand to 28% over the next ten years, up from 24% in 2021—still far short of parity..
The lack of diversity isn’t just a problem for women. It’s also a problem for the economy, said Farnoush Farsiar. “Diverse leadership teams perform better than ones that do not have as broad a range of viewpoints,” Farsiar said. “So it’s not only crucial for females to be represented in these professions; it’s also critical for the country as a whole.”
There are a number of theories as to why women are so underrepresented in the financial industry. One theory is that the financial industry is simply too male-dominated and competitive for women to break into. Another theory is that women are not encouraged to pursue careers in finance, either by their parents or peers.
Farsiar believes that the root of the problem lies in how women are socialized from a young age. “Women are socialized from a young age to be caretakers rather than risk-takers. “We’re taught to play it safe, not to take risks. And that’s just not conducive to a career in finance.”
It’s not just that women are socialized to be caretakers; they’re also socialized to be people-pleasers. “Women are indoctrinated to be polite and minimize conflict,” Farsiar adds. “But in finance, you need to be able to stand up for yourself. You need to be able to advocate for your own ideas.”
Farsiar Asks Where are all the Women in Finance?
The lack of women in finance is especially pronounced at the top levels of the industry. Women hold just about only 10% of executive-level jobs, according to a 2016-2017 study by Pew Research. And they hold just 11.5% of board seats at financial firms.
This imbalance has real-world consequences for women working in finance. Women are less likely to be promoted than their male counterparts, and they’re also more likely to leave the industry altogether.
The good news is that the number of women in senior roles is slowly but surely increasing. Farnoush Farsiar believes that this is partly due to the ##womenshould campaign, which has led to a greater awareness of the lack of diversity. Farsiar says that she is “convinced that the #MeToo movement also had an incredible impact. Women are beginning to get their voice and demand change.”
Barriers to Women Getting into Finance
There are a number of barriers preventing women from getting into finance. One of the biggest barriers is the lack of role models. Women in finance are often the only woman in their department, which can be isolating.
“It can be really intimidating to be the only woman in the room,” Farsiar said. “You feel like you’re expected to be perfect all of the time, and that you mustn’t make any mistakes.”
Another barrier is the “old boys’ club” mentality that still exists in many finance firms. This refers to the idea that men promote other men, and women are left out.
“There’s a lot of truth to that,” Farsiar admits. “I’ve seen it happen firsthand. Men will promote other men, even if the woman is more qualified.”
This old boys’ club mentality can also lead to sexual harassment and discrimination. Women in finance are often subjected to demeaning comments and unwelcome advances from their male colleagues.
“It’s definitely an issue,” Farnoush Farsiar exclaims. “Women in finance are often treated like objects, and it’s very hard to get ahead when you’re being treated that way.”
The final barrier is the lack of flexible working arrangements. Women are more likely than men to have family responsibilities, such as caring for children or elderly parents. This means they need flexible working arrangements to balance their work and home life.
“Finance is a very demanding industry, and it’s hard to meet those demands when you have other responsibilities. Women are often forced to choose between their career and their family.”
These barriers make it very difficult for women to enter the financial industry and reach senior positions. However, there are a number of initiatives that are working to change this.
Farnoush Farsiar Believes the Future is Bright for Women in Finance
There is every reason to be optimistic about the future of women in finance. Several initiatives are working to increase the number of women in the financial industry and to help them reach senior positions.
One such initiative is Women Entrepreneurs Finance Initiative (We-Fi), a partnership between the World Bank Group and 14 governments. We-Fi provides financing and support to women-led businesses in developing countries.
“This is a great initiative because it gives women access to the resources they need to start and grow their businesses,” Farsiar said. “It also helps them build networks and connect with other successful women.”
Another initiative is the Women in Finance Charter, which the U.K. government launched in 2016. The Women in Finance Charter is a commitment by financial firms to promote gender diversity.
“The Women in Finance Charter is a great step forward,” Farsiar encourages. “It’s encouraging financial firms to take action on gender diversity, and it’s making a difference.”
With initiatives like We-Fi and the Women in Finance Charter, more women get to enter and reach senior positions. This is good news for both women and the financial sector.