The key to seeing more women in finance? Mentorship

The finance industry is infamously a "boys' club," leaving very few spots for women with a passion for the field. Still, that doesn't mean companies should remain complacent or give up on their DEI efforts.

According to financial data company Preqin, less than 10% of senior roles at venture and private equity firms are held by women. ADP also found that women in banking and finance are paid $13 per hour less than men, which adds up when one considers a decades-long career. Granted, there are no quick fixes to the discrimination women face in these spaces — but there is a way to ensure more women can chart a path for themselves in this field. 

"Anytime you have an underrepresented group, it's even more important to have mentorships to support the few that are there," says Mara Derderian, a financial and risk management professor at Bryant University. "It's human nature to look for mentors who look like you; someone I could emulate and want to be like."

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Derderian served as vice president at both Citi Private Bank and HSBC Private Bank for over a decade, and she credits part of her success to the strong relationships she has built with women leaders who taught her different skills and qualities she would need in her career. While Derderian acknowledges that there are fewer women in finance than men to act as mentors, mentorship programs can have a snowball effect: One mentor could be the reason several women climb up an organization's hierarchy, and those women can go on to mentor the next group of new talent. 

An effective mentor acts like a sounding board for their mentees, offering insight one can only have because they have first-hand experience navigating their industry, says Derderian. Moreover, mentors hold their mentees accountable for reaching certain goals, making it easier for mentees to stay focused and motivated. When someone feels isolated or looked down upon in their chosen field, having a senior colleague in their corner who is pushing them to stay the course can make all the difference, underlines Derderian.

"I liken a mentor to a personal trainer — people go to the gym so somebody can keep them on track, train them and strengthen them," she says. "Mentors can do that to you from a professional standpoint."

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Derderian encourages employers in the finance sector to establish or strengthen their mentorship programs, placing more emphasis on connecting women and other minority talent with mentors who share some similarities, whether it is identity, career aspirations or both. 

Still, she acknowledges that mentorship programs are not easy to launch off the ground. For instance, if a program is too formal and structured, the relationships may feel too forced to develop into genuine mentorship. On the other hand, leaving employees to find a mentor themselves may mean underrepresented talent will continue to be pushed to the sidelines. The program will have to walk a fine line, matching mentors and mentees and encouraging them to meet but allowing enough flexibility for employees to explore other matches. 

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Regardless, Derderian believes mentorship programs are more than worth the effort, as they not only nurture new talent but keep both existing and new talent engaged with their company and industry. 

"When there is a mentorship program, your employees feel more aligned with your organization," she says. "If you have senior people supporting your junior staff, they can see themselves at that organization at that higher level. It gives them an idea of what the future might hold if they stay at the firm."