A groundbreaking moment in banking will soon come to a close.
Since October, two of the most prominent banking trade groups have been chaired by women.
Dorothy Savarese, CEO of Cape Cod Five Cents Savings Bank in Harwich Port, Mass., has held that role at the American Bankers Association for roughly three months, while Rebeca Romero Rainey, CEO of Centinel Bank of Taos in New Mexico, has been chairman of the Independent Community Bankers of America since March.
This is an important milestone for banking, and there is hope for some women that it will inspire the next generation of female bankers to take on greater leadership roles. Increased diversity could also help the trade groups innovate at a time when banking faces multiple challenges.
More can be done, and some advocates believe deliberate efforts must be made to recruit more women into positions of power to make sure their voices are heard.
"It does send a powerful message" having female chairs, said Patricia Husic, president and CEO at Centric Bank, which belongs to both organizations. "Step one is to have women leading these associations to show females in leadership positions. But how do you make more intentional moves to get women involved?"
While women have made gains in leadership positions in the financial services industry, progress has been slow. Female representation on boards at financial services firms has risen from 18% in 2013 to 20% last year, according to an Oliver Wyman study that looked at 381 companies in 32 countries. Women executive committee members increased from 14% in 2013 to 16%.
At current growth rates, women won't reach 30% – the point at which a minority's voice starts to be heard in its own right – of executive committee posts until 2048, the study determined.
Savarese, who first became involved with the ABA through her state organization, said she didn't set out to become the group's chairman largely because she didn't see other women filling that role. And yet she still became just the second female chairman in the trade group's more than 140-year history. (Virginia banker Elizabeth Duke, who is vice chair and a director at Wells Fargo, was the first.)
"I saw the influence we could have and the idea of getting more involved grew on me," said Savarese, who is also her bank's chairman. "I have learned so much from so many other banks."
Perhaps one the biggest benefits of having Savarese and Romero Rainey as chairmen is their ability to inspire other women and bankers of diverse backgrounds to become more involved.
At the ABA, the slate of officers, including chairman, is recommended by a nominating committee before being put to a vote by the association's membership during its annual convention, which is usually in October.
Potential ICBA chairmen must first serve in several committee leadership roles before being considered. Candidates for ICBA vice chairman are identified by the past ICBA chairman, who is also on the nominating committee, and are ultimately elected by the board during the group's national convention. After one-year terms as vice chairman and chairman-elect, the individual is then elected chairman.
"Whenever younger women see our generation in those leadership roles it gives them great hope that the glass ceiling is broken and we're going to new heights," said Mary Lynn Lenz, president and CEO of Foothills Bank. "I'm not going to tell you that it is easy, though. It saddens me that we don't have more women in those prominent positions, but at least we're setting a precedent."
In fact, men are set to succeed Romero Rainey and Savarese this year. Scott Heitkamp, president and CEO of ValueBank Texas, is set to chair the ICBA, while Kenneth Burgess Jr., chairman at FirstCapital Bank of Texas, is in line to take over the role at the ABA this fall.
Research has found that role models can set powerful examples. For instance, almost a quarter of girls between 14 and 17 said that Hillary Clinton's run for the presidency made them more likely to seek leadership positions, according to a national poll conducted for The New York Times.
The Geena Davis Institute on Gender in Media, which was formed a decade ago to advocate for gender parity in entertainment for young children, found that fictional characters in films and television, such as Katniss Everdeen in “The Hunger Games” and Princess Merida in “Brave,” inspired young people to take up archery.
Romero Rainey said she was inspired by Terry Jorde, who was the ICBA's first female chairman and is the group's chief of staff. Romero Rainey, who became involved in the organization through her state association, has served in a variety of capacities, including on the minority bank council.
"It goes back to the concept of telling your story," Romero Rainey, who also chairs her bank, said. "It's one of the things that I love about the community banking industry. There are so many unique stories and diverse communities being served."
The ICBA's success at getting women into leadership roles – it has had three female chairmen in the past decade – stems in part from the industry's evolving demographics, Jorde said. (Cynthia Blankenship, vice chairman and chief operating officer at Bank of the West in Grapevine, Texas, chaired the group from 2008 to 2009.)
A greater emphasis on areas such as regulatory compliance and strategic risk management has helped elevate women who serve in those roles.
"Early in my career there weren't as many women in the C-suite," Jorde said. "Traditionally men were the lenders and women started out as tellers or worked in operations. … Now we take it for granted that women can – and should – have a place in the executive offices. We elevate women where there is talent."
During her term as chairman, Savarese has advocated for more diversity at the ABA, notably during the committee appointment process, with backing from the organization's leadership. She noted that gender parity is "our issue, not my issue." The ABA hosts an annual women's leadership forum, which helps bankers network with CEOs and senior-level banking peers while also hearing about the latest issues affecting the banking industry.
Five of the ABA's board members, including Savarese and Husic, are women.
"Your labor force and leadership should reflect the customers you serve," said Rob Nichols, the ABA's president and CEO. "Our nation is a diverse place, so it makes sense for the ABA and its leadership to reflect that. But you also don't want everyone thinking the same thing, so it can also bring a diversity of thought."
As Savarese travels to industry events, she sometimes hears from attendees she helped inspire to take risks. She also fields questions from banks on how they can implement sponsorship or mentorship programs to make their workplaces more gender neutral.
"Focusing on women isn't a detriment to other folks," said Savarese, who was also instrumental in organizing Massachusetts' first women in banking conference. "It's important to encourage women to overcome internal and external obstacles."
It makes sense that banks would want to increase diversity within their workforce and leadership, industry experts said. Research has shown that companies with more diversity generally perform better. Companies in the top quartile for gender diversity are 15% more likely to have financial returns above their national industry medians, according to 2015 McKinsey research. Companies in the top quartile for racial and ethnic diversity are 35% likelier to have financial returns above their national industry means.
Diversity can help spur innovation, said Andrea Turner Moffitt, senior vice president at the Center for Talent Innovation and founder of Plum Alley Investments. This is especially important for the banking industry, which is facing competition from online lenders and new technology that is changing how banks interact with customers.
"We are on the brink of a whole new era of financial services," Moffitt said. "Technology is at the heart of disrupting some of the traditional models. There's an opportunity to be collaborative in how we leverage technology to improve the industry and give better access to a broader base of individuals."
Banks need to focus on becoming more diverse, industry experts said. Research at the Center for Talent Innovation has shown that it's necessary to have employees with inherent diversity, or those who are different based on gender, race, age and other factors, and acquired diversity such as cultural fluency and gender smarts, Moffitt said. Companies with both forms of diversity are more innovative, which can lead to new business opportunities.
"When you look at companies that have diversity and leadership at the board and on the management team, you see a direct correlation with higher returns," Husic said. "Diverse skillsets and thought lead to performance."