Despite growing awareness of the need for workplace diversity, implementations in the compliance sector remain shallow, where four in ten professionals still experience discrimination, according to a white paper report by the International Compliance Association, (ICA).
The ICA report
Released this month, the survey, which involved 300 ICA members, found that 38% of professionals working in the financial crime compliance and global regulatory sectors had experienced discrimination at some point in their career. While half of the respondents believed their company was committed to diversity and inclusion, significant numbers also said that more needed to be done (37%). In contrast, others said the issue had not been “adequately addressed” in their organisation (13%).
While a number of professionals believed compliance had less of a diversity issue than other areas of business, some cited a lack of gender diversity at the leadership level, too few BAME candidates, and the prevalence of white male professionals as evidence of shallow diversity implementations in the sector.
Shallow diversity implementations in compliance
These findings infer that while businesses in the compliance sector may be looking at diversity and inclusion as an HR imperative, which is a sign of progress, it’s still seen as a box-ticking exercise and a policy that doesn’t have any real impact on a company’s performance.
Compliance experts involved in the running of the survey were not surprised by the high number of professionals reporting discrimination in the sector, citing unconscious bias in hiring and management practices including lack of sophisticated D&I training as contributing factors. Experts also said “a fear of retaliation” existed in the compliance sector where victims of discrimination refrain from speaking up in case their career is compromised.
The benefits of D&I in compliance
While experts said that employees who feel included tend to have higher morale and are more likely to perform at their best, having a diverse team with different ways of thinking can also reduce “blind spots” in an organisation. Diversity of thought can make businesses more agile and able to pivot themselves easier during times of crisis, said another, as diverse teams are more likely to consider different approaches to solving a problem.
Other noted benefits of a diverse workforce include better engagement with increasingly socially aware consumers and money saved from costly discrimination lawsuits, said another expert.
The study’s collation of anonymous responses from compliance employees sheds even more light on how seriously diversity and inclusion initiatives are being taken by leadership in the sector.
One respondent said that “getting management to actually note the value in D&I” was needed as “most see it as a PR stunt.” Another said “generally, people who don’t experience issues with D&I don’t think there are issues with it” while a third respondent said that D&I “is seen as an HR remit.” A fourth respondent said that lack of time was a contributing factor as people are too “busy” to focus on understanding and implementing D&I strategies.
Many of the survey’s respondents said they believed a diverse workforce leads to better compliance strategies through more varied thoughts and perspectives. One respondent said D&I “helps the organisation set up a much better compliance ecosystem through a deeper and more comprehensive worldview.” While another said diversity in an organisation helps develop a culture of ethics and better compliance.
How to become more inclusive
Experts involved in the survey then listed key areas where compliance businesses can make a start on better D&I. These include establishing “benchmarks and accountability frameworks” and creating “special training modules for management and employees that address special risk areas such as implicit bias, microaggressions, and stereotyping.” They added that it is the responsibility of leadership to constantly “keep a pulse on morale issues and workplace culture and environment”.
Other recommendations include encouraging diverse teams to work on projects together, establishing D&I considerations across hiring and recruitment practices, and ensuring there are safe spaces where employees can discuss discrimination related issues with senior staff.
ICA President, Bill Howarth said: “The survey’s findings demonstrate some of the gaps in D&I within the compliance function but also the progress made by companies globally to advance D&I. Some of the challenges of fostering a diverse and inclusive culture include ineffective training on the subject or a lack of training altogether and fear of discrimination and retaliation. On the other hand, many organisations are focused on D&I as they understand how it improves their culture, performance, and the ability to innovate and manage risk more effectively.”
Diversity in financial services: the statistics
While the ICA report results reveal that more financial services businesses are addressing D&I topics, the momentum for implementing change has remained slow. Take a 2015 US PwC report, for example, where 73% of female millennials working in the sector said while their organisations talked about diversity, they felt that equal opportunities weren’t available to everyone. A later 2018 report by HR consultant Randstad revealed that despite growing awareness of D&I in the financial services sector, senior leaders still failed to recognise its business value.
While these statistics show the financial services sector’s long-standing problem with seeing the business value of D&I, it’s up to leadership to implement change as the desire for diversity and inclusion is evident among the sector’s employees.