In honour of International Women’s Day, I connect the threads that are the contributions of female leaders that continue to help weave the tapestry of financial services regulation and compliance. #BreakTheBias
This year's theme, "Gender equality today for a sustainable tomorrow", recognises the contribution of women and girls around the world, who are leading the charge on climate change adaptation, mitigation, and response to build a more sustainable future for all.
As you walk on the way...
May you live in interesting times! 2022 continues the trend established in 2020. 'Interesting’ may be a bit of an understatement of the times we live in. Change and challenge are the new normal.
Women have risen to the challenge in several fields. To loosely quote Rumi - As we walk on the way, the way appears. The political female leaders have stood out tremendously, in part due to the hyperfocus of most of the global population on the handling of a global crisis. Female leaders in financial services, including those within regulatory authorities, have been slower to gain ground.
Rewards and Challenges
My regulatory experience has been a rewarding one thus far, though not without challenges. These challenges have often been touted as character-building experiences. To some degree, there is a truth in that. However, gender equality, particularly in the upper echelons of regulatory bodies remains underwhelming. The boys’ club still exists, and while there are shining exceptions, sadly there is so much more that could be achieved through embracing women in leadership roles within the regulatory and compliance community. What women bring to regulation includes innovative approaches to embrace technologies that promise to transform our world.
The contributions of women in the field of financial services regulation have gathered momentum in recent years. Three women, who are visible, vocal and have an international impact, stand out in my mind. These include Christine Lagarde – the president of the European Central Bank; Kristalina Georgieva – Managing Director of the International Monetary Fund to Hester Pierce - Commissioner of the US Securities and Exchange Commission (also affectionately known as Crypto Mom). There are other women leaders in financial services regulation to be sure. However, the framework that currently exists has been slow to embrace gender equality in leadership roles from my vantage point.
Resistance to female-led progressive change
It would be expected to focus on the progressive work being done by women in financial services regulation, and indeed, this is a large part of the purpose of this blog. However, women’s contributions are not always immediately embraced. Strong female leaders persevere. One such strong female leader in financial services regulation that I follow is the US Securities and Exchange Commissioner Hester Peirce. If you are a part of the crypto-community, you may be aware of her statements and a thoughtful ‘Token Safe Habor Proposal 2.0’ aimed at qualitative engagement to aid the development of a regulatory framework for digital assets. To many, including US politicians, it appears that her innovative contributions to necessary regulatory discourse, including the Safe Habor Proposal, have been left to wither on the vine.
The crypto-community has embraced her more warmly than many other regulators. Twitter users have debated amongst themselves why Commissioner Peirce does not leave the SEC. I do not know her reasoning, but I would like to think it is because she recognises that though seemingly marginalized by her fellow Commissioners, her departure would mean that a level of engagement that does occur would cease. That her apparent challenge to the pockets of groupthink that stymies innovation and progress would evaporate. In her resistance to follow the status-quo, Hester Peirce leads!
A more sustainable future for all!
Financial services regulation has an incredibly important part to play in developing a sustainable future. The basics of requiring fair and transparent business requirements for firms that impact the fiscal lives and social impact of financial services goes so much farther than licensing and supervision. From developing frameworks that support financial inclusion to incentivising Corporate Governance Frameworks that support ESG – Environment, Social & Governance, the role of regulation is in the process of evolving.
I believe in the critical role of regulation for steady and sustainable growth. Financial Services Regulators have not won popularity contests (and if they do, the spectre of ‘regulatory capture’ is a real danger). However, global financial stability is in a large part driven by stable markets where people have confidence in those markets. The world has come to realise the untapped potential of millions that are unbanked and underbanked.
FinTech innovations are making leaps into allowing those within the world to finally be in a position to develop a sustainable future for themselves and their families. Regulation for microfinance and microinsurance (supported by A2ii and other bodies) have progressed in many markets. The utility of microinsurance for cottage industries or the subsistence farmers whose crops can be wiped out in one natural disaster can help persons recover from losses that would prevent them from being able to sustain themselves and their families. Within the Caribbean region, we are all too familiar with the ‘once in a century’ floods and hurricanes that seem to happen every other year in one country or another.
FinTech and design-thinking embedded into regulation can (and has in some areas) allow for the acceptance of digital IDs. It appears to be a bit more challenging; however, it is critically important. Regulation to embrace and enable financial services providers to accept digital IDs - particularly for those who have lived without identification for all of their lives and therefore cannot fulfil traditional due diligence requirements and remain unbanked - is still necessary and is a work in progress.
Regulators also have a huge role to play in improving financial flows to allow for MSMEs to benefit from reduced costs of cross border transfers. Greater efficiency and certainty in paying for goods to be shipped for instance allows for better business management. The variables that impact businesses now that buy goods for their businesses in the region, particularly during active hurricane seasons, are incredibly stressful when a wire transfer goes astray. Missing a shipment window doesn’t mean a few days delay, but a few weeks or months (or worse, miss the window for a once a year seasonal market). Yes, Regulators have a role in helping with these issues.
Women - Drivers of Change
While Christine Lagarde was the Managing Director of the IMF, I had the profound opportunity to witness her delivering remarks at the Summer 2017 FATF Plenary in Valencia, Spain. I sat maybe 20 feet away from her. Her speech, which could be deemed the epilogue on a very successful Plenary, set out several areas of complementary work being done by the FATF and IMF. In her remarks, Lagarde notably highlighted the need to embrace FinTech to combat terrorism as well as develop the financial sector. She also spoke about the impact of the withdrawal of correspondent banking services. This issue has perhaps been one of the largest challenges that threatened to undermine work towards improving financial inclusion, particularly in regions like the Caribbean and South Pacific.
In a completely different field, I remember a documentary that cited men remarking about evidence of early men making marks to count and their many hypotheses on what led to this. All of those hypotheses fell away when a woman joined the team. It never dawned on seasoned anthropologists that those markings that they thought were evidence of early man counting were made by women, who, unlike men, need to count the days between periods. This is not a wholly unrelated segue. Women see the consequences of regulation differently – the impact to not just themselves, but their family and the wider community. We count and, so should our thoughts!
There are certainly women thought-leaders in regulation and compliance that I follow and learn from. Female leaders I follow that are supporting transformative change include:
- Alma Angotti – Partner & Segment Leader, Guidehouse (former senior-level regulator) https://guidehouse.com/
- Cindy Scotland – Managing Director, Cayman Islands Monetary Authority https://www.cima.ky/
- Bénédicte Nolens – Head of BIS Innovation Hub Hong Kong Centre https://www.bis.org/about/bisih/about.htm
- Gabriele Dunker – Founding Partner, Financial Transparency Advisors GmbH https://www.ft-advisors.com/en/home/
Most recently, my experiences included a unique and happy coincidence. While on secondment to the Anguilla Financial Services Commission (AFSC), I worked alongside a cadre of dynamic and hardworking regulators, all under the leadership of Tina Bryan, the Managing Director of the AFSC. Within their ranks are current and future female leaders to be sure. The AFSC staff compliment, as at the time of writing, remains 100% female. What they have been able to accomplish in four years through thoughtful and balanced engagement internally as well as with other stakeholders, has been nothing short of amazing! What the team of women have been able to accomplish highlights the ability to impart progressive concepts into regulatory frameworks. I will definitely continue to watch that space.
Women and Energies Transformed
Regulatory frameworks are so much more than laws, supervision and enforcement. The laws are the gears and pistons in a bigger engine. The applied supervision is the lubricant and enforcement measures are akin to the servicing of the engine. Global economic development requires regulatory frameworks. Progressive regulatory frameworks nurture the development needed for a sustainable future – from microinsurance to macroprudential policies. The role of women in regulation is more critical now than it has ever been! Our perspectives provide a depth of experiences and insights that have been lacking to varying degrees in the past four decades (and longer) in the development of financial services regulation, international standards and best practices.
Transformation requires all of us – women included – to contribute to progressive regulation that supports innovation and sustainability. This is not to say that gender equality has not progressed at all in financial services regulation. Momentum is building! Women often offer insightful views that help firms, including regulatory authorities, avoid groupthink, which compounds bad decisions and does not offer a varied perspective on how an effective strategy may ultimately be achieved.
If we are to address the biggest challenges impacting our existence, many times more detrimentally impacting women than men, women must, at a minimum, be an equal partner in leading change in regulation.
 For Commissioner Peirce’s full proposal, see https://www.sec.gov/news/public-statement/peirce-statement-token-safe-harbor-proposal-2.0
 Harvard Business Review: Getting Beyond Groupthink to Make Groups Smarter. 2015. https://hbr.org/webinar/2015/03/getting-beyond-groupthink-to-make-groups-smarter