Promoting Diversity in Finance Is Crucial for Equality & Success

By: Rajul Sood, Managing Director & Global Head of Lending Services, Acuity Knowledge Partners

Rajul Sood, the global head of lending services at Acuity Knowledge Partners, has been with the firm for 20 years and is currently the Managing Director. Her responsibilities include overall strategy and growth of the business, managing technology innovation and overall governance and delivery management. Lending services is a rapidly growing business, with a focus on digitization and innovation, Rajul has been with the firm for 20 years, recognizing its unique approach to the finance industry and its potential. She started her career early after graduation, earning a master's in finance and control from Punjab University, Chandigarh. She focuses on knowledge services and Workforce inclusion.

 In a conversation with Women Entrepreneurs Review magazine, Rajul talks about women’s representation in the field of finance. She also sheds light on how women in leadership roles have increased, the strategies that brought about this change and much more.

Here are the key excerpts from the conversation.

Can you provide an overview of the historical challenges faced by women in finance, particularly on the Wall Street? How have pioneering women reshaped the historically male-dominated landscape of finance, breaking barriers and driving substantial advancements in the field?

Global banks face challenges in addressing gender stereotypes, particularly in leadership positions. While there have been some positive developments with prominent female CEOs at JPMorgan Chase and Citigroup, Catalyst reports that in 2023, only about 10.4% of Fortune 500 CEOs were women This lack of representation affects the leadership chain and hinders the growth of women in the global workforce. Despite these challenges, the global audience still includes many successful female leaders, highlighting the importance of addressing gender stereotypes and promoting diversity in leadership roles.

Female leaders should share their experiences and journeys to inspire the women workforce. However, there is a lack of role models in various industries and a male-dominated culture at every business level. This often leads to women having to quit their jobs and take on household responsibilities when men change their jobs or pick up a job overseas. Despite all these challenges, female leaders should strive to inspire and empower women in their careers.

Even though Indian metropolitan cities have a high literacy rate, the percentage of working women   is still low and opportunities are not equally distributed across the country. The government has made efforts to create jobs through manufacturing and other businesses in the country, but the overall disparity remains. Financial independence is still undervalued among women, largely due to cultural expectations. Women are often raised with the assumption that their primary job is to take care for their families, which may have changed to an extent in metropolitan cities  howeverthe overall percentage of female workforce still remains low in South Asian countries. This family pressure often leads to women relocating to other parts of the country to seek career opportunities or move to international locations

How has the finance industry transitioned from limited women participation to a gradual shift towards greater gender diversity and representation?

Traditionally, jobs such as teaching and human resources, were believed to be ideal for women. However, we have seen a transition where women have started moving into non-traditional roles such as banking, knowledge services, data analytics, and technology. India's cost-effectiveness and focus on strong academics among the South Asian countries have led to more opportunities with work life balance for women and organizations have been able to diversify their workforce as well. International companies investing in India have given women more options while consulting firms with higher gender diversity are known to have 20% more chances of outperforming on profitability. This has helped attract and retain women's talent.

Top companies are increasingly focusing on diversity and inclusion (D&I) through targeted campaigns and initiatives. Acuity Knowledge Partners has introduced programs like the Step Up program, which encourages women who have taken career breaks for maternity or other personal reasons to rejoin the workforce. Additionally, firms are implementing programs like the MOM project, which supports women going on maternity leaves and helps them navigate the transition process. This shift in focus is not limited to the finance industry, as many firms have proven the business case of having a higher number of women on their boards. Additionally, some countries have implemented regulatory measures to promote gender diversity, such as the European Union's ‘Women on board’ directive aims to have 40% women on the executive board by 2026.

The European Union's directive has empowering effects, as it attracts external pressure. Socially responsible investors invest in companies with better diversity, leading to increased investment. Work-life balance initiatives, manager training, and mentorship programs are also implemented. However, women are still underrepresented in senior roles, particularly in investment banking and marketing, due to their family maintenance responsibilities. Despite progress, awareness is increasing daily.

What specific initiatives or changes have contributed to the increased representation of women in finance particularly in leadership roles?

Financial institutions and banks now consider diversity as an integral part of  their vendor selection process, valuing diversity percentage in decision-making. Women leadership awards and increased maternity leaves are also few of the encouraging initiatives, as many countries have increased maternity benefits and allowances to up to 26 weeks.

The Women Initiative Network, led by me in the organization, hosts women's spotlight events and projects like Project Velocity and RISE Mentorship. These programs empower women by sharing their journeys as single mothers, highlighting the importance of network and support in raising children. These examples motivate women across the country to move forward.

Women have also played a crucial role in shaping investment strategies. What pivotal contributions have women made to modern portfolio management and investment strategies, particularly in shaping diversification and risk principles?

Studies suggest that women are more risk-averse and have a long-term view of investing, focusing on fundamentals and asset allocation. They avoid excessive risk-taking and can be more ambitious about investing. Women also bring a balanced perspective to risk assessment, considering downside risk and portfolio volatility. Men tend to focus on returns and ROI, while women consider downside risk and portfolio volatility. For example, Shanti Ekambaram, consumer banking head at Kotak Mahindra Bank, launched digital banking services, entered new markets, and adopted innovation., Arundhati Bhattacharya, formerchairperson of SBI, transformed the bank ever since she joined. She entered Forbes' 25th most powerful woman and implemented innovative modernization initiatives.

Promoting diversity in finance is crucial for equality and success. Women in finance hold only 10% of leadership roles, with a composition of 90% men. Women drop out of education, schools, colleges, and the workforce due to various reasons. Only 25% to 30% of women join the workforce, with many dropping out due to marriage. Governments and multinationals are taking initiatives to increase leadership, leading to more female CEOs, CFOs, and managing directors.

Women are increasingly taking on roles in various industries, including investment banking, wealth management, and financial technology, due to supportive organizational cultures. Traditional spaces in HR are also closing out, leading women to seek alternative options. Women are now in every field, breaking barriers to move to different sectors, taking over leadership positions, and starting entrepreneurship. They are breaking barriers by not sticking to household jobs and doing flexible work to achieve financial independence. Additionally, women are encouraging other women to break barriers and help them succeed. Top leaders in international investment banks are sharing their career histories and managing work-life balance, demonstrating the importance of supporting women in the industry.

What advice would you offer to young women aspiring to pursue careers in finance, particularly on the Wall Street? What trends do you anticipate in terms of gender representation and leadership?

Women need to have clear domain expertise in finance, including capital markets, data analytics, digital marketing, investment research, and consulting. This technical expertise is crucial for women to pursue their desired careers. Effective communication is also essential for success, as women often struggle to communicate effectively due to a lack of communication in various fields. In Wall Street, analytical communication skills are crucial for discussing mergers and acquisitions and valuations. Communication is essential for understanding and comprehending oneself, as investment bankers and otherfinance professionals expect more than just words. Building a brand and network is also veryimportant  Women often tend to lose friends and their social circle trying to balance family and busy  work schedules. To maintain connections, women should read news, make friends, use social learning platforms, and share their perspectives.

For millennials, hard work, tapping into opportunities for change, honesty, and integrity are essential for effective leadership. Adapting to change is crucial, as technology and innovation can quickly replace anything. Being able to adopt and adapt quickly is essential for good leadership.