Áine McCleary, the first woman to become president of the Institute of Banking, talks to Elaine Burke about the gender imbalance in financial services and fintech.
The Institute of Banking stakes its claim as the largest professional membership organisation in Ireland, with 34,000 members. Áine McCleary was appointed president earlier this year, becoming the first woman to hold the position in the organisation’s 120-year history. The recently appointed chief executive, Mary O’Dea, is also the first woman in her role.
The central focus of the Institute of Banking is the professional development of its members working in banking and financial services across Ireland, and this requires being responsive to the rapidly changing financial services sector and any issues percolating therein.
“From the perspective of the Institute of Banking, the most important initiatives revolve around more women continuing to invest in their own professional development by completing advanced qualifications and also by participating in forums, events and committees,” said McCleary.
‘There is a visibility to these roles that has an impact. Women will look to us as role models and can see what is possible’
– ÁINE MCCLEARY
Shifting the balance
McCleary has been in banking since 1994 and she believes the gender balance has shifted somewhat in that time. Citing O’Dea along with Francesca McDonagh, the first female CEO of Bank of Ireland (where McCleary also serves as director of distribution channels), she said: “There is a visibility to these roles that has an impact. Women will look to us as role models and can see what is possible.”
This month, the UK required all employers of 250 or more people to publish a calculation of their gender pay gap. For Bank of Ireland UK, this amounted to a mean difference of 36pc (32pc median), and the response from the Irish leadership has been a pledge to move the needle.
McDonagh announced a formal commitment to achieving a 50:50 gender ratio in appointments to all management and leadership positions by the end of 2021, and McCleary said the company looks forward to broadening pay gap reporting to the entire group “when the appropriate legislation has been passed”.
McCleary notes companies with concerns need to be “building up the bench”, asking where are the women in the pipeline and ensuring they are receiving the support and skills they need to develop.
“Organisations also need to recognise the need for flexible working, to encourage growth within these numbers,” she added.
That said, McCleary also made the point – through the words of another prominent businesswoman – that this is not simply a numbers game. “To quote Mary Barra, General Motors CEO: ‘Cultivating diversity isn’t about taking a gender count when you walk into a room. It’s about valuing all ideas and building teams with different backgrounds and experiences.’”
The pace of change
In the UK, the first progress report of the Women in Finance Charter recorded a snail’s pace of improvement. There are currently 205 signatories to the UK Treasury’s charter, but this report centres on the first 68 that signed up to a goal of reaching about one-third women senior managers by 2022. Change is coming as a 3pc increase per year.
Banks, in particular, are lagging behind. Calculations indicate that 2,300 women need to join the ranks of senior managers across the first 68 signatories in order for them to meet their targets, and two-thirds of this number is attributed to the 17 banks on the list.
In Ireland, McCleary told me that Ed Sibley, deputy governor of prudential regulation at the Central Bank of Ireland, “described the underrepresentation of women in senior leadership positions across financial services as a ‘cause for concern’”.
Though she has not personally felt held back because of her gender, she believes unconscious bias can be a factor, and that change in the number of senior women across financial services requires “a multifaceted approach”.
‘As the fintech sector becomes more prominent within financial services, the need for fintech-literate talent is increasing. This is a huge opportunity to develop diversity and inclusion’
– ÁINE MCCLEARY
The slow pace of gender balance is frighteningly outstripped by the fast pace of technological developments entering the finance sector. One of the hottest trends in fintech right now is cryptocurrency, notably dominated by men, sparking fears that the future of finance and banking is doomed to repeat the mistakes of the past.
Seemingly an optimist, McCleary sees opportunity in emerging trends. “Ireland continues to lead in multiple areas of fintech such as payments, alternative lending and blockchain,” she said. “As the fintech sector becomes more prominent within financial services, the need for fintech-literate talent is increasing. This is a huge opportunity to develop diversity and inclusion as these companies form and grow and STEM becomes paramount to their creation. True innovation can only come from greater diversity.”
That said, McCleary is not oblivious to the similarly troubling underrepresentation of women in STEM. As the sectors merge, their issues will, too.
“There is no easy answer, no silver bullet. Industry, academia and government agencies must work together to understand the underlying causes, the real or perceived barriers, and address the imbalance,” said McCleary, namechecking Women in Technology and Science (WITS), Science Foundation Ireland and Teagasc as “leading the way” with initiatives to improve the awareness, participation and retention of women in STEM.
While there are issues at the top, the importance of including women in the product development process for banking services has not been overlooked. “It’s no secret that women account for over half of purchases and over three-quarters of purchasing decisions. At Bank of Ireland, we recognise the fact that women are key influencers in household decisions and therefore overrepresent women in our ethnographic interviews and customer focus groups when researching financial needs,” explained McCleary.
Knowing how this core demographic of customers thinks and behaves is crucial to the business of banking. “New Ireland, the assurance arm of Bank of Ireland Group, recently looked specifically at how working women were planning for retirement and what was needed to support that. Although women are competent decision-makers, they continue to put the needs of others before their own, resulting in over 500,000 working women not having a pension. We are currently planning how we can better support the financial needs of women in retirement,” said McCleary.
As a service, banking targets a broad customer base and, as McCleary puts it, “we must reflect the diversity of the customers we serve”.
She added: “This challenge is not unique to Bank of Ireland, but we have to take steps ourselves to fix it.”
‘Although women are competent decision-makers, they continue to put the needs of others before their own, resulting in over 500,000 working women not having a pension’
– ÁINE MCCLEARY
Unsurprisingly, what’s good for the customer is good for business. For McCleary, diversity and inclusion is a stepping stone to greater innovation through what she calls “collective intelligence” and “enabling a smarter workforce”.
“It is well written that where groups of individuals act collectively, it makes an organisation smarter and more successful,” she said. “Extensive research has shown that collective intelligence is most powerful when built on gender diversity and a balanced mix of skills and life experiences. Every company can benefit from diversity in their organisation.”
And so, McCleary explained: “By encouraging the full potential of all colleagues, the bank will be stronger, more innovative and more reflective of our customers – there will be no disconnect between what we are internally, and who we serve externally.”