Although' sex' and 'gender' were historically used as the same concept, the meaning of 'gender' has shifted focus over time.

Sex is biologically defined, whereas gender is a social construct that is an internal sense of self. It is now widely considered that gender is not binary but a spectrum. 'Non-binary' is an umbrella term for individuals whose gender identity does not sit comfortably with 'man' or 'woman'. Stonewall estimate that 1% of the UK population does not identify as their birth gender, equating to approximately 600,000 people. 

The discussion around non-binary people continues to be a hot topic in the media, with celebrities like Demi Lovato, Sam Smith and Jonathan Van Ness shining a light on the community, and International Non-Binary People's Day, raising awareness across the globe. 

Last year, we invited interested parties from the Process and Standards Group (PSG) to participate in a research group about extending gender identity options to be more inclusive and to assess the operational implications and their effects on our Standards. We gathered input from participating firms by interviewing individuals from each organisation. Media interest intertwined with significant sensitivity around the topic meant that the research was treated with consideration and was not deemed a comprehensive account on the complexities around this topic as the Criterion team are not experts in this field.

When researching the organisation's internal cultures, responses showed that all organisations believed diversity and inclusion were part of their make-up. Some firms have made changes to allow and encourage their employees to be able to reflect their gender identity and recognise those who are transgender, non-binary, or gender non-conforming. For example, some organisations encouraged staff to share preferred pronouns and allowed them to record gender-neutral titles on HR systems. 

However, research showed that the progressive attitude that firms have established for their employees is not always reflected in options offered to their customers. The research group identified critical areas for organisations' future consideration, which included the following:

  • 'Gender' and 'title' options were used to derive the sex registered at birth of a customer, creating a risk of over-interpreting customer disclosures; 
  • When 'gender' or 'sex' is requested, this may signal gender bias to some customers.
     

From these findings, the research group recommended that further consideration should be given to:

  • 'Gender' or 'sex' should only be asked for if necessary.
  • Additional information should be included if using the term 'sex'. For example, the reason the data is being collected, e.g., family medical history.
  • An explanation that the use of the term 'sex' means 'sex registered at birth'.
  • A review of pronouns in literature and communication with customers should be conducted.
  • 'Title' should only indicate a preference for communication and explicitly not for identifying sex.


The research group found several challenges that could disrupt the changes needed to be more inclusive for customers in the finance sector. An industry-wide review of the appetite and impact of any changes would be required to ensure compatibility between trading partners. Additionally, as identity data is at the core of most processes and systems, making these changes could require significant investment. Funding is usually prioritised for regulatory changes or those with clear financial benefits.

The Criterion team also reviewed our existing Standards, looking at the current definitions and data elements that could be linked to gender. Our Standards definitions reflected the interchangeable use of sex and gender within related processing. In most cases, the definition matches the intended purpose. When the next versions are created, the following updates are recommended: 

  • Replace 'maiden name' with 'previous surname' and include 'Mx' (Mx is a gender-neutral title used by people who do not identify as male or female, and is an alternative to Mr, Mrs, Miss and Ms) in title options.
  • Replace 'sex' with 'sex registered at birth' in the Annuity New Business Standards.
  • Use inclusive pronouns for Legal Framework Documents and the Retirement Health Form.


Overall, our research group concluded that firms should only collect data on 'sex’ if it is deemed necessary and should be labelled as 'sex registered at birth.' Additionally, they should explain the reason for collecting this data to avoid customers believing there is gender bias. Finally, consistent language in communication with customers and employees will lead to more inclusiveness across the sector.