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Women are marginalized in financial analysis field, U. professor's research finds

Tengfei Zhang, an assistant professor in the Department of Finance, said he used big data and artificial intelligence to research gender and race in the financial sector. – Photo by

Tengfei Zhang, an assistant professor in the Department of Finance at the Rutgers Business School, recently earned a Chancellor’s Grant for Assistant Professor Research Development for his research on the role of gender and race in the field of financial analysis, according to a press release.

Zhang said his application for the grant was likely accepted because his research and its implications are critical for diversity, equity and inclusion at the University.

He said that women are disproportionately underrepresented in the field of financial analysis, and despite greater social progress in the last decade, the percentage of women in the profession only saw a 2 percent increase from 2006 to 2020.

"There's not much increase in terms of female representation in this profession," Zhang said. "That's why we think that this ratio may be more serious in the financial services industry."

One research paper co-authored by Zhang observed that women spoke less, asked fewer questions and were interrupted more than their male colleagues on earnings conference calls, he said.

Still, this paper also noted that women display less doubt and hesitation than their male counterparts, attributing this observation to awareness raised by the #MeToo movement.

Zhang also said he found that female equity analysts were more likely to initiate conversations around environmental, social and governance (ESG) matters, according to another study, according to the press release.

He said the ESG movement differs from typical business models by focusing on the entire ecosystem of communities affected by a business' operations rather than solely on those involved in financial investments.

"This is a transition from profit maximization to stakeholder value maximization," Zhang said.

With respect to race's role within the financial analysis field, Zhang said his work also concluded that anti-Asian hate crimes associated with the coronavirus disease (COVID-19) negatively impacted East Asian financial analysts, resulting in more pessimistic market predictions.

Zhang's work has identified links between gender equality and improved work performance and has conversely found connections between racial discrimination and worsened work performance. He said gender and racial equality in the workplace would be beneficial socially, economically and financially.

Zhang said that though gender representation is relatively even among Rutgers students majoring in finance, he noticed that female students tend to pursue careers outside of the financial services industry. His goal is to encourage students from underrepresented and marginalized backgrounds to join the industry, he said.

"We have a lot of students from diverse backgrounds, right? So that's a thing we should appreciate, and I think we should welcome those diverse education environments," Zhang said.

He said his research teams used big data and machine learning to reach their conclusions. Zhang said even with potential biases present in artificial intelligence, future research projects on gender and racial bias can incorporate more AI usage.

"When we join the workforce, we would like to see people equally share the opportunity in not only the financial services industry but in all industries," Zhang said.

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