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This involves developing and implementing strategies, business plans, and significant policies that embed diversity & inclusivity philosophies and principles, Dr Norhana Endut, Assistant Governor of Bank Negara Malaysia, points out.
Dr Norhana Endut, Assistant Governor of Bank Negara Malaysia, has called for greater diversity and inclusion for the insurance industry.
Speaking at the Malaysian Insurance Institute (MII) Women Empowerment Conference, Dr. Norhana emphasised the importance of women participation in the financial sector.
"The financial sector is the anchor that will support and fund the nation’s economic transformation and has a key role in elevating the financial wellbeing of all households and businesses."
As such, for the financial sector to be truly effective in promoting transformative and sustainable economic growth, the sector must be aligned and calibrated to reflect the diverse needs of the society it serves, she notes.
"The financial sector must therefore strive to be one that is both dynamic and inclusive." As Dr. Norhana explained, this would mean ensuring that women, minorities, and other under-represented groups have both access to financial services, and with fair and meaningful representation within the industry.
Sharing more on Bank Negara’s strategic initiatives aimed at fostering a more inclusive financial system, Dr. Norhana first set the context with key data on women in Malaysia.
Currently, the leader shared, Malaysia ranks 13th out of 19 East Asia and Pacific countries in the 2023 Gender Gap Index, even with high enrolment rates for women in primary, secondary, and tertiary education. Women also face lower economic participation and opportunities, with a labour force participation rate of only 56.5% — for comparison, the LFPR for men was recorded at 83%.
Women also make up 38.9% of total employment of total employment, with the largest share of women being employed in the services sector. In the finance and insurance industry, the share of women is significantly higher, at 52.1% of the total workforce in the industry.
That being said, she added, women generally earn less than men for similar roles; overall women’s wages were 2.0% lower than overall men’s wages in 2019. More specifically, women’s wages for the finance and insurance industry were 13.4% lower than men’s wages.
More recently, this gender pay gap persists. Post-pandemic, in 2022, the gap only decreased slightly. Overall women’s wages were 1.2% lower than overall men’s wages. For the finance and insurance industry in particular, the gender gap has also decreased, though still remained high at 8.9%.
To add on, while women hold about 37% of senior management roles in the public sector, the number is much lower at 25% in the private sector.
The importance of women in the financial sector
As Dr Norhana affirmed, this leaves much to be desired, especially considering the important role women play in fostering an inclusive and dynamic financial sector.
"Diverse teams bring a variety of perspectives and experiences, and they tend to be more successful at solving complex tasks and issues.
"Heterogenous teams also foster creative thinking and innovation, which leads to the development of new products and services catering to a broader customer base. In financial services, where innovation is crucial for competitiveness, diversity provides a significant advantage."
On top of that, she shares, inclusive teams also make more informed and effective decisions, which can enhance risk management and strategic planning. Additionally, a diverse workforce means a better understanding and service for a wide-range customer base. This can help organisations tap into underserved markets, improve customer satisfaction, and drive growth.
All in all, inclusive workplaces tend to have higher employee engagement and morale. In turn, when employees feel valued and respected, they are more likely to stay with the company, reducing turnover and associated costs.
"Thus, by fostering diversity and inclusion, with a material presence of women in position of leadership and decision-making, financial services providers can build stronger, more resilient organisations that are better equipped to navigate the complexities of the modern business environment and meet the evolving needs of their customers."
As Dr Norhana shared further, with its commitment to fostering a diverse and inclusive workplace, Bank Negara Malaysia's ethos emphasises merit and equal opportunities for all, which has been embedded in the thrust of its people’s policy.
"Our objective is to attract and inspire the best talent to central banking and public policy. We want people with diverse ideas, willing to challenge and debate and we want them to feel empowered, at all levels, to take the initiatives and push boundaries.
"Hence, our policies and initiatives focus closely on what drives performance, factor that differentiates talent, what motivates the right behaviours and, measures to manage and minimise the barriers to success."
Dr. Norhana went on to elaborate on these key policies and initiatives practiced at the bank.
Transparent merit-based rewards and career progression
The first key thrust of Bank Negara's talent policy is one of a merit-based rewards and career progression. Hiring, rewards, and promotion practices are transparent, focusing on individual merit and therefore, gender neutral. Both men and women are compensated equally for comparable jobs, thereby fostering fairness and equity within the workplace.
In 2023, women made up 55% of the promotions to mid-managements across the bank.
Inclusive career development opportunities
The second is a strong focus on career development. The bank provides opportunities for all employees to be part of the leadership pipeline and programmes, and for them to engage in cross-sectoral projects and international assignments, as well as mentorship and coaching opportunities.
Almost half of the bank's leadership pipeline comprise of women an. Its inclusive approach is also reflected in its Structured Leadership Programme for Mid-Management with 56% participation from women.
Comprehensive supportive work environment
Third, the bank maintains a strict zero-tolerance policy towards harassment, cultivating a safe and respectful workplace. The establishment of a dedicated Ethics and Integrity Office underscores its commitment to the highest standards of ethical behaviour.
At the same time, Bank Negara Malaysia recognises that in ensuring staffs’ wellbeing, these extend beyond providing the traditional healthcare benefits. As such its support include mental wellness programmes and confidential counselling services to all staffs.
Enhanced flexible working arrangements
Lastly, flexible working arrangements are a cornerstone of its strategy to meet the rising demand of today’s employees. These arrangements, which have been enhanced in the wake of the pandemic, include flexible hours and the option for remote work.
Such arrangements, Dr Norhana pointed out, enable staff to undertake multiple roles and tailor their schedules to their family or lifestyle needs. This is in acknowledgement of the evolving dynamics of shared domestic responsibilities and extend these flexibilities to all employees, irrespective of gender, aiming to retain talent and allow staffs to thrive without having to choose between personal needs and their career.
As a result, Bank Negara Malaysia has achieved a balanced representation of women and men across the bank. Internally, almost half (48%) of department heads are women, and almost two thirds (or 62%) of the central bank critical departments which are focussing on its core mandates of monetary and financial stability are being led by women leaders.
"The significant female representation at higher levels of decision-making highlights the effectiveness of our supportive policies and initiatives in retaining and progressing female talent."
Looking ahead, Dr. Norhana urged the financial sector to further promote women empowerment and growth. In June last year, Bank Negara had published the Financial Inclusion Framework 2023–2026, which sets out its vision, desired outcomes, policy objectives, and strategies for advancing financial inclusion holistically. It incorporates a cross-cutting theme of gender considerations to ensure that barriers and challenges are identified and addressed effectively.
Through the framework, the bank aims to address barriers and ensuring that gender considerations are integrated into its policies and strategies.
"I, therefore, call on the insurance industry to demonstrate full support for this agenda of mainstreaming gender and diversity within the insurance industry."
This involves:
- developing and implementing strategies, business plans, and significant policies that embed diversity and inclusivity philosophies and principles.
- establishing clear corporate values and set diversity goals and metrics to promote a culture of diversity, equity, and inclusivity.
- an aim to develop innovative, specialised, and tailored insurance products or financial solutions that cater to the needs and requirements of vulnerable segments, including women and women-owned businesses.
"I urge all stakeholders in the financial sector to join us in this mission. By working together, we can create a more inclusive financial sector that not only supports but actively empowers women."
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