The world may have made a lot of progress, but the financial matters of most households are still managed only by men. Women have always been considered weak in matters concerning the numbers, but if reports are to be believed, women as compared to men perform better in the financial sector.
Women have always been versatile in making and following household budgets. Many researchers have concluded that there is no physiological or psychological evidence supporting the myth that women’s brains are structured in a particular manner making them weaker in dealing with numbers. But the myth is widely believed and has created the metaphorical glass ceiling, the greatest barrier to advancement for women in any profession. This is evident from the fact that globally not many women have managed the reigns of large organizations in the financial sector. However, women are gradually breaking the stereotypes and contributing significantly in the financial sector, especially the banking sector.
Money definitely plays a vital role in human life. It has limited human life in the vicious circle of earning, spending, saving and investing. If money is so important, it is surprising that very few women are actively earning and even fewer are involved in the money matters, both at a professional level and familial level. Women contribute to more than half of the world population, but only 37% women across the globe were earning in 2017 according to the International Monetary Fund (IMF). Further appalling is the fact that only 27% Indian women are involved in the workforce. These figures make it obvious that the number of women availing financial services and holding bank accounts too would be significantly low. Global Findex Survey once highlighted that only 43% Indian women held bank accounts in 2014. However, the number sharply soared to 77% in 2017 post demonetization and Jan Dhan Yojana, government’s steps to boost financial inclusion in India. However, this has not changed the scenario much.
Why change is needed?
A recent report by the IMF highlighted that women are better at risk management. From the observed samples, the report claims that banks with women leaders were more stable, had higher capital buffers, a lower proportion of nonperforming assets and greater resistance to stress. On the other hand, small and medium-sized enterprises run by women were 54% less likely to default on payments as compared to enterprises run by men, an interesting observation made by United Nations Development Programme. It also observed that generally men invest double the usual investments made by women, but women make 20% more profit. These observations prove that women have great potential. Regardless, women are still given the back seat in fiscal matters.
What reports highlight?
Research conducted by International Monetary Fund (IMF) highlights that the inclusion of women in the financial services as users, providers or regulators will facilitate in narrowing the gender gap, fostering greater stability in the system and boosting economic growth. It also highlighted that on an average in 2015, less than 2% of financial institutions across the globe had women chief executive officers and less than 20% of the executive board panelists were women, whereas, nearly 75% of global businesses have at least one woman in senior management, a considerable rise from 66% recorded in 2017. Concurrently, the senior roles held by women are proportionally low, claimed another report, bringing to light that businesses tick off the gender diversity box by just including women in management, instead of creating an inclusive culture.
The changing trends:
Despite this, we have several examples of strong women who have fought all odds. Some women in the industry have made a noteworthy impact and come as a whiff of fresh air, challenging the myths.
Christine Lagarde broke all stereotypes and became the first woman Finance Minister of France and is the first woman to head International Monetary Fund (IMF). She was appointed as the Managing Director and Chairperson of IMF in July 2011 and was re-elected for the second consecutive term in July 2016.
Gita Gopinath was recently appointed as the Economic Counselor and Director of the IMF’s Research Department. She is the first female Chief Economist of IMF. She is also a noted Harvard Professor of Economics and was the Economic Advisor to Kerala Chief Minister Pinarayi Vijayan. Born in a middle-class family in India, Gita worked her way to the top and registered her name in history. Her journey is a perfect example showing how determined women hailing from a humble background can shine in any sector. She is also a source of inspiration for aspiring women in India.
A change for the better!
Like Gita, there are quite a few remarkable women who have achieved greatly and put Indian women on the map, which well reflects the changing situation in India. For over five decades post-independence, none of the leading banks in India were managed by women. However, we now have dozens of banks which are headed by women. Arundhati Bhattacharya was appointed as the first woman chairman of India’s largest public sector bank, State Bank of India (SBI) in 2013. Arundhati has expanded the organization’s horizon and explored new avenues of success. However, this was not the first case. Vijayalakshmi Iyer was appointed as the Chairperson & Managing Director (CMD) of Bank of India (BOI) in 2012. In 2012, Shubhalakshmi Panse too was appointed as the Chairperson & Managing Director (CMD) of Allahabad Bank and contributed a lot in improving the fiscal position of the bank. Other prominent names in this category are Anjali Bansal, Chief Managing Director (CMD) of Dena Bank and Padmaja Chunduru, Managing Director and CEO of Indian Bank. The count of such achievements and remarkable personalities would remain incomplete without mentioning Shikha Sharma considering her contribution in setting up ICICI Securities and the ICICI and JP Morgan joint venture and her other achievements at Axis Bank.
Indian women now are also leading international banks. Naina Lal Kidwai joined the HSBC group as Vice-Chairman and Managing Director at HSBC Securities and Capital Markets in 2002 and continued to grow with the bank and retired as the Executive Director on the Board of HSBC Asia-Pacific and Chairman of HSBC India in 2018. Kaku Nakhate is also a vital contributor in this sector. She is the President and Country of Head India at Bank of America-Merrill Lynch India, one of the leading wealth management, capital markets and advisory companies in India. Her efforts made India one of the most profitable markets in the Asia-Pacific region for Bank of America Merrill Lynch in 2017.
Where globally women face the glass ceiling as a growth obstacle, these women have broken the double glass ceiling of the organization and society to scale greater heights. The involvement of these women in the banking sector has brought a stir in society and has boosted women’s morale in several organizations. However, we need to realize that these are just a few streaks of change, which can be further catapulted by supporting women education, employment and empowerment. If explored deeply, the superficial challenges boil down to the actual challenges such as lack of awareness and societal discrimination.
(Author, Mr Rajiv Singh is CEO-Stock Broking at Karvy)