Gender equality status in the financial services industry

In spite of South Africa’s progressive Constitutional and legislative framework, gender equality in South Africa remains elusive. The most extreme manifestation of this inequality is evidenced in the high levels of gender-based violence within South Africa. In the financial services industry, there are two aspects to gender equality. The first aspect entails addressing representation within the industry. The second aspect entails improving the availability of gender responsive financial advice and products.

With regard to representation, in South Africa there is only one female CEO currently at the top 40 JSE listed companies, Ms Phuti Mahanyele-Dabengwa, who was recently appointed to lead Naspers South Africa. Research has also shown that women make up only 22% of the board of directors in listed companies and under 10% of executive directors. The incentive to address diversity within organisations has been illustrated through research. For example, according to PwC, corporate companies effectively using female talent are 45% more likely to report improved market share. PwC goes on to state that closing the gender pay gap by 10% could deliver an additional 3.2% in GDP growth and a 6.5% reduction in unemployment. Given South Africa’s high levels of poverty and unemployment, improving gender equality is an investment opportunity that cannot be ignored. Representation cannot be addressed though, without simultaneously tackling the gender pay gap. This is demonstrated by a 2019 survey released by the SA Venture Capital Association (Savca) which shows that representation by female professionals within the industry has increased to 29.6%, from 21.8% in 2017. However, the gender pay gap within the industry still prevents effective economic female empowerment.

With regard to gender-sensitive financial advice and services, female investors can no longer be seen as a “niche” group, but instead should be seen as a powerful force. A 2018 State Street Global Advisors (SSGA) report shows that women are becoming increasingly responsible for family investments. Research has also shown that women use a different language and approach when investing. While there are intersecting factors that shape women’s needs and experiences, women are more risk-averse and tend to think about investing in a relational, long-term and holistic manner. The Financial Sector Regulatory Act 9 of 2017 specifically defines financial inclusion as the ability for all persons to have timely and fair access to appropriate, fair and affordable financial products and services. There is therefore a need for financial advice and products that are more responsive to women’s particular goals and life stories.

While South Africa has far to go in terms of fostering gender equality, it is clear that financial services providers can choose to be leaders in this regard. They can do this through addressing and removing gendered barriers within the workplace, such as sexual harassment, promoting female leadership and crafting more responsive financial advice and products.

Click here to read the SAVCA report.

Click here to access the PwC article.

Click here to download the PwC report.

Click here to download the SSGA report.

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