“Let’s not beat about the bush”, Jessica James, Managing Director and Senior Quantitative Researcher at Commerzbank AG, said at QuantMinds International last year. “There aren’t enough women.”
At the height of fourth-wave feminism, it is impossible to ignore the lack of women or the lack of female representations in any industry. In 2011, P&D Quant recruitment reported that in a sample of 600 quants in London, only 43 were women. That’s 7%. The figures do not improve much globally; it is 8.3%.
Let’s take it from the top
If we go back to the beginning of the talent pipeline, the numbers actually offer a very interesting story. Writing for the Institute of Fiscal Studies, Rachel Cassidy, Sarah Cattan, and Claire Crawford noted that in 2018 girls took 22% more A-levels and were over a third more likely to go to university. Suddenly boys, especially those with a lower socioeconomic background, became significantly underrepresented at university. But despite this overall picture, it was found that girls only accounted for 39% of maths A-levels, 28% of further maths A-levels, and 22% of physics A-levels.
So it seems that despite there being more women heading into higher education than ever, their choice of studies tend to lead into a different career path than quantitative finance. However, Laura Ballotta, Reader in Financial Mathematics at Cass Business School, observed that there are “more women taking up STEM subjects at university”. She hopes that “in time they will start appreciating their application in finance as well”.
But there is another trend that is worrying and that is the fact that men, who are much more likely to take up STEM subjects, are much less likely to go to university. So here is quantitative finance’s problem: in an ever-changing and rapidly developing world, riddled with new socioeconomic challenges, can this sector rely on its current talent pool to ensure quantitative finance’s bright future?
Progress and innovation
“We will need more diverse input to keep up with the rapidly changing society”, Hanna Hultin, Industrial PhD student at SEB, said. “If everyone has very similar perspectives and background, it is easy to miss out on new possibilities and not question the old ways of doing things. There are several studies indicating that diverse workplaces can improve both the work culture and the performance of the company.”
With the increasing importance of AI in finance, Hultin added that “there is a new risk of creating biased AI. There are multiple examples of AI becoming discriminating because the group that created the AI lacked diversity.”
“Progress and innovation come from the interaction of many different points of view”, Ballotta explained. “Diversity plays an essential part in putting together people from different paths of life, experience and opinions. The finance sector is one of those which is evolving at a very fast pace and I believe that diversity is key for this process to keep the momentum and generate sensible answers to topical issues.”
Dr Blanka Horvath, Lecturer in Financial Mathematics at King’s College London, commented: “It is true that we tend to surround ourselves with like-minded people, people with similar experiences, similar career paths, similar values, and similar opinions. Diversity, whatever its nature may be, brings in an increased potential for our views and best practices to be constantly challenged, which is a great recipe for growth and for anticipating risks that lie ahead.”
What can you do?
Fixing the talent pipeline is complicated. Based on the issues laid out above, you could encourage more men to go into higher education, or you could start encouraging women, who at the moment are more likely to go to university, to take up STEM subjects.
Ballotta recommends that “the industry could keep more in touch with universities to promote careers in the sector and to identify and nurture new talents through scholarships, invitations to seminars, and internships. Universities can offer big pools of potential candidates who are highly qualified and who come from very diverse background. By interacting more with them, the finance sector could show how many more opportunities are out there.”
Hultin has already taken that step and “represented SEB in several events with the aim to broaden the image of the bank and build a bridge between the students and the finance sector”.
But Horvath warned that in order to attract more women to the industry, targeting them at university is not enough.
“Decisions for career paths are made much earlier, and the training for quants (a good fundamental knowledge in mathematics, or physics, programming or a related subject) is not something one can easily do as a second degree parallel to a full time job on the side”, Horvath explained. “A better target audience would be the 13-15 year olds, or even younger.”
Horvath noted, however, that this is a complex societal and institutional issue that cannot be solved with marketing and advertising only, although the latter might raise awareness of the opportunities.
“It would be great to have the families and the schools on board”, Horvath said. “I am sure that it would help if young girls who are asked the question What do you want to become when you grow up? would get the same acknowledging proud nods from their families and teachers when they answer a quant as the ones who answer a medical doctor.”
Quant 2.0 – A whole new picture
Hultin and Ballotta both identified the banking industry’s public image as lacking and outdated. And who doesn’t remember the evil bankers in Mary Poppins whose actions ultimately made the Banks children’s lives unhappy? Or the hedonistic, heteronormative world of The Wolf of Wall Street?
“I knew that I wanted to work with math and data analysis, but I never thought I would work at a bank. A big reason for that was the reputation of the work culture in the finance sector”, Hultin admitted. “What definitely changed my mind about working at a bank was meeting some great people in finance who were not similar to my stereotypes of bankers.”
“Perhaps the finance sector has been stereotyped too much as being mainly a male world, but times have changed”, Ballotta commented. “There are many women in this sector, although perhaps not as many as we would expect or like to see. However, many seem to keep a low profile.”
But for Hultin, the presence of those who you can aspire to is important.
“I believe that having diverse role models are crucial both to attract and retain talent. If there are role models in senior positions who you can identify with, it becomes easier to imagine your own role and career path”, Hultin explained.
Quantitative finance is an intersection of economics, mathematics, statistics, finance and computer science, Ballotta told us. It is an industry that needs diverse talents to keep on innovating, but to build this pipeline, the whole sector must be involved.
“It is a necessity that all of us make an effort together to have an inclusive work culture where it is not only accepted to raise these types of questions, but where it is encouraged”, Hultin said. “We have to help each other in order to become better.”
Join these extraordinary #QuantWomen at QuantMinds International and continue the discussion with them there.
Watch the panel discussion on diversity from last year's QuantMinds International: