Glass Ceiling Hindrance to Financial Industry Development
By Suh Jung-won
Associate Professor of Finance at Ewha Womans University
In recent years, the Korean economy has seen a rising financial services industry in its national income and employment, as it moves from manufacturing to a services-based economy.
Many pundits point out that Korea's financial services firms lag behind leading financial institutions in the world in terms of their competitiveness. There may be several reasons. But, given that financial services are essentially a people business ― unlike manufacturing industries that heavily depend on fixed capital ― the competitiveness of financial services firms is largely determined by the quality of their workforce.
It might sound like a cliche, but the truth is that Korea is a male-dominated society. Men make the key decisions in this country. Though some progress has been made, the monopoly held by men in major decision-making is not going to change for the time being. The financial services industry is no exception, as male managers and executives make major decisions. Yes, there are a considerable number of female workers in the financial services industry _ especially in the eyes of retail customers. Mostly female workers process face-to-face transactions with retail customers. Those female workers include so-called ``tellers'' (bank clerks), whose primary role is to receive and give out cash, or ``insurance saleswomen,'' who are often called as ``insurance ajummas'' (Korean for middle-aged, married woman). However, a high-ranking female manager or executive remains a rarity in the industry.
According to some statistics, the share of women at management and executive levels is as low as around 5 percent in the financial services industry here.
The shortage of high-ranking female managers and executives has been reinforced by a negative feedback loop. Female workers face high hurdles in their efforts to move up to managerial levels. Most women do not have mentors who can give them advice, help them work through problems and build a career roadmap.
There is an absence of female role models they can look up to. Since the ``Old Boy's Club'' dominates networking in the industry women are disadvantaged in their access to premium information and the opportunity for promotion. Under these circumstances, the financial services industry fails to attract many young and talented women into its workforce.
Now, the question is whether competitiveness (or lack thereof) of the financial services industry is related to the industry's male domination at management and executive levels. In my judgment, the glass ceiling that prevents young, talented women from advancing to managerial and executive positions offers an explanation as to why Korean financial service firms lag behind their counterparts in major economies.
Essentially, financial services firms here are missing out on the opportunity to utilize excellent resources that would be offered by a female workforce. Female workers have many things to offer that male workers do not ― they are by nature better at dealing with people and identifying the needs of female customers, who make up half of the target market.
Note that, interestingly, there is one area in which women have traditionally been leading decision-maker, even in the preponderance of male decision-makings. It is none other than family finances. While husbands are primary bread earners for many families, most key decisions traditionally belong to their wives.
We have a saying here, ``If a man wants to build a fortune, he has to marry first.'' Traditionally, men's ability to make rational, long-term financial decisions has been questioned. In contrast, women have been highly regarded in their ability to manage money and thereby have been entrusted to run family finances. I imagine that there may be a particular gene that is responsible for the superiority of women in managing money.
What does this imply for the future of the financial services industry? I believe that we need to make efforts to foster an environment in which women's special financial talent is fully utilized. I would say that the Ewha-Citi Global Finance Academy, the on-going partnership program between Ewha Womans University and Citibank Korea, is an example of such efforts. Managers and executives from Citibank Korea give lectures on a wide range of real world finance issues on the basis of a curriculum designed by Ewha Womans University. Each semester, this program accommodates more than one hundred undergraduate and graduate students.
More than anything, the program offers students an opportunity to plan and prepare their career in the financial services industry at an early stage in life. Since its inception in 2001, the Ewha-Citi Global Finance Academy has contributed to remedying the gender imbalance in the financial services industry by giving young, talented female students a head start in their career planning.
Finally, it is encouraging that the number of women in managerial positions is on the rise in domestic financial institutions. I believe that we need to make continuous efforts to develop and leverage our female workforce if we want to see our financial institutions compete at a higher level with international powerhouses.