Having women in senior leadership ranks can make banks more innovative and lead to better financial performance, according to a new report from ABA strategic partner Alloy Labs Alliance. The report surveyed women leaders in the banking industry and identified three key areas—career paths, life experiences and the need to rely on transformational leadership to combat bias—where women’s experiences tended to spur them to innovation.
For example, the report noted that while many male CEOs tend to rise to leadership positions after career success in “middle-market lending,” female CEOs often take a less traditional path through a broader range of roles within the bank. Mary Ann Scully, CEO of Baltimore-based Howard Bank—who held a range of roles from lending to strategic planning—observed that her role in M&A and planning helped deepen her understanding of the business of banking.
“My job as a lender was really to understand my customer. It was to understand their business. It wasn’t understanding our business—how we make money,” Scully noted. “Once you begin thinking about your own business, you immediately begin thinking about innovation. . . . The more you understand your own business model, the more you’re forced to be innovative.”
For banks focused on innovation and improving diversity among their leadership ranks, the report outlined four steps for success. These include making a clear commitment to diversity that is communicated from the top of the organization, investing in DEI initiatives, taking specific actions to drive change and making adjustments to initiatives where needed. American Bankers Association SVP Naomi Mercer—who was also interviewed for the report—also emphasized the importance of inclusion. “The inclusion piece really matters, because without that, you’re not going to retain a diverse group of people in your bank,” Mercer says. “They’ll go someplace else.”