The historical underrepresentation of women and people of color in the financial services industry is a known and often discussed challenge. What those discussions regularly miss, however, is the degree to which this problem is a STEM problem.
Today’s modern financial system depends on information technology to perform tasks large and small, while mathematicians and physicists provide the quantitative analysis to develop trading and risk management programs. Today, two-thirds of jobs in banking and finance require substantial math and technology skills, and over the next 10 years those types of positions will generate more than three-quarters of the projected job growth, according to industry research.
The lack of diversity in these roles is already significant, with women holding only 39 percent of these types of positions—compared to 77 percent of all other jobs—and people of color holding only 17 percent versus 22 percent of all other jobs, according to data from Change the Equation, an organization that promotes STEM education with corporate support.
Unless action is taken to reverse this trend, the gap may grow even larger in the years ahead because the pipeline from which financial services will need to draw future employees is unbalanced.
According to the most recent statistics from the National Science Foundation, women make up only one-third of STEM graduate students, while Black and Hispanic students combined account for less than 10 percent. It is marginally better when looking specifically at math, where women make up 35 percent of graduate students, but they fall back to only 26 percent in computer science compared to 74 percent male students. In both categories, the combined percentage of Black and Hispanic graduate students is a mere 7 percent in each.
Clearly, creating greater diversity in STEM education will be critical for the financial industry, and it is absolutely crucial for firms like DTCC, which provides post-trade services and innovative solutions that automate, centralize, and standardize the processing of more than $1.6 quadrillion in financial transactions globally.
A STEM background is essential in our business because, much like the rest of the industry, we rely heavily on IT to run day-to-day operations, and develop innovative new services for our clients. Most importantly, our primary mission is risk management, a discipline dependent on increasingly sophisticated and complex math. As a result, we have established access and advancement in STEM as a top organizational priority and have dedicated time and resources to this effort. For example, in 2015 we engaged with Change the Equation to increase skills-based volunteerism among our employees and to give us visibility into successful STEM Programs.
In addition, we are currently developing a comprehensive, multi-year plan for supporting STEM education—one part of our robust diversity and inclusion initiative that is designed to mobilize our entire global organization to achieve this key priority.
As we continue to work to increase the representation and engagement of Black and Hispanic employees, and to further the recruitment, development and advancement of women at DTCC, I am committed to reversing the current industry trends and building a truly diverse and inclusive environment at DTCC. STEM initiatives will be an integral part of this effort.
This essay originally appeared in the January issue of Change the Equation, an organization that promotes STEM education (Science, Technology, Engineering and Math) and is backed by dozens of corporate members and sponsors.