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New research reveals female bankers regularly outperform men on trading floor

An initial study by Alexander Mann Solutions reveals fascinating findings around the behavioural differences and propensity for trading ability between male and female entry-level graduates.

Alexander Mann Solutions, the world’s leading provider of talent acquisition and management services, and Trading Hub, a global financial information services company (the trading name of Financial Skills Limited), have today released an initial study into assessing the behavioural differences and propensity for trading ability between male and female entry level graduates.

The findings from the study, with a sample size of circa 350 entry level graduates participating in a trading simulation over four weeks, highlighted that females outperformed males on trading simulations in three key areas:

  • Female traders take 30% less risk than the average male trader
  • Male traders place 27% more trades than female traders, increasing the onward cost of associated brokerage and transaction fees
  • Male traders are 2.5 times more likely to break the rules than their female counterparts, demonstrating a greater risk of chance or recklessness

The findings show that investment banks and trading institutions have the opportunity to be proactive in shifting their trading cultures, and not risk losing profitability in doing so.  By increasing female representation on trading floors, investment banks, hedge funds and brokerage houses can positively shift their institutional cultures relating to risk and regulatory compliance. Given that female trading activity delivered equitable levels of profitability but with far fewer trade positions placed, trading floors could actually benefit from less cost incurred through lower brokerage fees.

Jo Feely, Global Client Partner at Alexander Mann Solutions, commented: “We believe this study points to gender diversity being a key lever which banks can pull to enable cultural change. The findings suggest a greater gender balance could help drive culture change – a change which may create less volatility, less rule-breaking and less risk. We hope our findings can be used as the catalyst for debate across the industry and as thought leaders we are happy to manage that debate.” 

David Hesketh, Chief Operating Officer at Trading Hub, added: “The question of how to boost female professionals to pursue careers in the industry, and in particular investment banking, has never been more critical. This study shows us that banks have a direct financial interest in levelling the gender imbalance.”

To download the case study, please visit: http://www.alexandermannsolutions.com/2015/01/women-better-traders-men/