With 46 percent of all entry-level hires, a new study by the International Finance Corporation (IFC) finds that Sri Lanka is ahead of some of its South Asian peers in recruiting women at the entry-level of the banking industry. The study supported under the Women in Work program—a partnership between IFC and the Australian government— also finds that Sri Lankan banking industry leads the region in women representation at the board level, with 27 percent compared to 20 percent in Nepal and 14 percent in Bangladesh.
The study—among the first of its kind in the region—aims to help optimize opportunities that can enable women to advance to senior roles in the banking industry in South Asia. This multi-country study, Women's Advancement in Banking in Emerging South Asian Countries, focuses on private-sector commercial banks in Bangladesh, Nepal, and Sri Lanka, where women constitute 30 percent of the banking sector's workforce compared to the global average of 52 percent.
The findings on Sri Lanka are based on the research conducted among seven private commercial banks in the country, which collectively hold 41 percent of the market share in Sri Lanka.
While Sri Lanka's banking industry is close to achieving parity in hiring women and is considerably ahead of other countries in terms of women's share in the workforce, women's progression does not match their career aspirations or progression rates for men. The largest drop in representation occurs when moving from entry-level to middle management and further drops at senior management level. Across the surveyed banks in Sri Lanka, women occupy 40 percent of the entry-level roles but only 27 percent of middle management and 20 percent of senior management positions.
"Investing in the potential of women leaders isn't just about equality, it's about unlocking the full spectrum of talent and driving sustainable growth– exactly what Sri Lanka needs for a resilient recovery of the economy," said Imad N. Fakhoury, IFC's Regional Director for South Asia. "We know that female bankers face a multitude of challenges, which is why one-off solutions implemented by banks are unlikely to work. Instead, we need concerted actions that can address these obstacles—whether policy, process, or culture–related—in a targeted manner, creating an inclusive banking sector and driving greater economic growth."
The report underlines how barriers such as lack of fair evaluations, sociocultural constraints and non-conducive work environments curtail women's growth prospects in the Sri Lankan banking industry. While banks and policymakers have initiated several steps to improve women's participation and progression, increased support by the leadership can further drive meaningful change in creating inclusive workplaces. According to the findings, many employees—including senior leaders and more than 50 percent of the middle managers—do not believe that having more women in leadership is important for the business to be competitive.
Past studies have shown that commercial banks that have 15 percent or more women in senior manager or higher roles, command up to 33 percent higher return on equity than banks that do not. A growing body of evidence further links an increase in women's representation in organizations to better performance on business metrics.
"This comprehensive, data-based report is a strong starting point for the banking sector to improve long-term policies allowing women and men to achieve their potential. The sector – as well as other organizations – should take note of findings that show an increase in women's representation in senior manager or higher roles delivers higher returns and stronger business outcomes," said HE Paul Stephens, Australian High Commissioner for Sri Lanka.
The report also recommends targeted efforts in Sri Lanka to better support women's participation and advancement in commercial banking. These include establishing organizational commitment and accountability for gender diversity, building equitable and safe workplaces, and creating engaged ecosystems such as networking opportunities and professional development. Accordingly, the key findings and recommendations intend to help industry actors—C-suite leaders in commercial banks, policymakers, industry bodies, and investors—direct their efforts to boost women's representation in leadership in the banking industry.