The trading desks in the dealing rooms of banks are overwhelmingly male across the world. In my own twenty-four years in financial services in India, I have come across just one woman trader. In the UK, women comprise a mere 13 per cent of bank traders. Trading involves taking shorter-term risks repeatedly to make gains, with financial incentives heavily loaded in favour of those who deliver the big bucks, the winners.

The act of taking risks in the short term to achieve repeated gains has been widely studied by neuroscientists in several other domains—politics, sports, the military, and even animal behaviours relating to territorial gains. Aptly termed the ‘winner effect’, in the dealing rooms of banks it manifests when traders, initially successful in taking risks to achieve wins, are spurred to take increasingly larger risks for even bigger wins. The reverse holds true as well: losses often lead to risk aversion in all decisions. In these situations, carefully calibrated risk-taking gives way to emotional surges. Instances of ‘rogue traders’ causing financial institutions billions of dollars in losses make headlines with disturbing regularity.

The research on derivative traders was led by John Coates, who spent thirteen years on Wall Street trading desks at Deutsche Bank and Goldman Sachs. Having both experienced and observed this effect on traders, he later turned to neuroscience and Cambridge to research the phenomenon. He found that women were largely immune to the effect, as were older men. Laboratory tests using saliva samples indicated a strong link to testosterone, a hormone found in larger concentrations in younger men.

Meanwhile, Science Daily published a report on a large-scale study led by neuroscientists at Rosalind Franklin University of Medicine and Science examining differences between men's and women's brains, including performance across a range of tasks. Decades of research were coalesced into a single meta-synthesis, and the conclusion was: ‘hardly at all.’ Dr Lise Eliot, who led the study, states: ‘... this false impression that there is such a thing as a “male brain” and a “female brain” has had wide impacts on how we treat boys and girls, men and women.’ One such impact is the long-standing belief that girls have a biologically lower ability in mathematics.

Interestingly, research has also found a relationship between maths scores and gender equality in countries. The more gender-equal the country, the smaller the difference in scores. In Scandinavian countries, the gap is negligible; in Iceland—the most gender-equal country—girls outperform boys. It is noteworthy that for quite some time, testosterone was believed to play a role in mathematical thinking.

These two seemingly unrelated studies connect in interesting ways, and testosterone is not the only link. But let's start there. In popular discourse, testosterone is the much-maligned hormone associated with male aggression and overconfidence at one end, and with numerous purported benefits ranging from improved performance in sport and in the bedroom. Less widely known, and contrary to popular perception, is scientific research showing that testosterone can encourage men to pursue with greater enthusiasm whatever brings them social kudos. As neurobiologist and primatologist Robert Sapolsky notes, ‘..boosting testosterone levels ... can make people compete like crazy to do the most random acts of kindness’ if social circumstances are engineered accordingly.

This is one example of what scientists have long realized: the interplay between biology and environment is complex and nuanced, involving feedback loops that work both ways. In the case of derivatives traders in bank dealing rooms, apart from hormonal factors, the daily environment comprises risk management practices, financial incentives and predominantly men goading one another. One of John Coates's key policy prescriptions is to balance high-risk trading roles with more women and older men. Likewise, the study of girls' maths scores and gender equality underscores the importance of environment. In this instance, it is the larger cultural environment of a country that impacts girls' mathematical performance.

The immense popularity of the book Men are from Mars, Women are from Venus has made that phrase officially a meme and is ‘... an example of how incorrect and baseless ideas can displace good reasoned thinking based on research.’ Disproportionate media attention and countless seemingly innocuous jokes and memes help such false ideas take root in the popular imagination, with severely pernicious long-term effects.

Just as it has engendered the longstanding misconception that girls have biologically lower abilities in maths, it has also perpetuated the stereotype that women are not cut out for finance, implicitly influencing both men and women. In India, women constitute a mere 10 per cent of the workforce in microfinance—ironically, an industry where 98 per cent of its clientele are women. And while research shows that women are both better investors for themselves and more effective investment managers, they account for an abysmal 11 per cent of those roles.

Barring the stated ‘no discrimination’ policy in company manuals, there has been no real concerted action in terms of deliberate, affirmative steps to rectify this anomaly in organizations. Sadly, the science-based tools and techniques that have worked in certain contexts to correct such disparities are neither widely known nor widely practiced. Fragmented efforts — such as appointing a diversity champion or offering a dedicated women's training programme — may be better than doing nothing, but are unlikely to move the needle in any meaningful way. Sending a few people for short-term training programmes at Ivy League institutions is not of much use. It takes considerably longer to imbibe and assimilate a complex subject, and then a very different set of skills to share those learnings across an organization.

Good intent may lead organizations to hire consultants and pop psychologists with only superficial knowledge, resulting in a mishmash of initiatives—such as unconscious bias training or overtly women-centric policies—that empirical research shows are of little use and sometimes counterproductive. Unsurprisingly, in a speaker interview at the annual conference of the CFA Institute in 2018, Nobel laureate in Economics Daniel Kahneman, when asked for ‘easy suggestions and advice’ on applying behavioural insights for its 1,50,000-strong global membership of investment professionals, suggested simply reading a couple of books by his friend and fellow Nobel laureate Richard Thaler, highlighting that there are no ‘easy solutions or advice.’

Clearly, there is a lack of effective mechanisms to transfer the wealth of evidence-based research to policymakers and business leaders. Meaningful options for organizations could be to draw on the expertise of the few behavioural science practitioners who have spent reasonable periods of time in both business and academia, or collaborations with academic institutions, that have a nuanced understanding of the subject and the ability to test it in specific organizational contexts.

‘Excerpted from _The Business of Business Is (Not) Just Business_ edited by Sutapa Banerjee, published by HarperCollins India, 2026.’