It is no secret that Fintech has a massive gender imbalance.
It was reported in 2019 that women make up less than a third of fintech employees in the UK, only 29.5%. In 2020, figures show that the percentage of women in executive roles within fintech worldwide was at a mere 20%, and that on a global level, digital banks are lagging behind traditional incumbent banks when it comes to female board representation.
This big issue can therefore be broken down into three main gender diversity problems. The first and most well-known problem is the lack of women working within the Fintech industry. Then there is the problem of the extreme lack of female founders or leaders in Fintech.
The third problem however, is one that is often swept under the rug, and that is the lack of women Fintech users and customers. These three problems are interconnected and create a vicious cycle, where Fintech becomes a male-centric industry, created by and for men.
Getting to the root of the problem
Fintech, or Financial Technology, was perhaps hindered with this problem from the very beginning. It combines two of the most male-dominated industries, financial services and technology – no wonder Fintech suffers from a lack of gender diversity.
If we go deeper into the root cause of the issue then, it can be argued that it is the lack of women involved in STEM (science, technology, engineering, and mathematics) subjects at higher education that is to blame, as these subjects provide the basis for the skills and interest needed to get involved in the industry.
This on top of “poor media portrayals, outdated cultural norms and stereotypes, unwelcoming cultures and a lack of proper leadership,” explains Dr Anne-Marie Imafidon MBE, computer scientist and Co-Founder of Stemettes, “are just a few factors that have led to homogenous finance and technology sectors. So, it’s unsurprising that at their intersection – fintech – we see the same pattern of underrepresentation.”
The competitive advantage of female representation
Diversity is good for business, and there are countless studies that support this. Female leadership has been shown to correspond with greater profitability and productivity, as well as happier and easier to retain employees.
“It is widely acknowledged that diverse groups are stronger, more creative and more innovative,” remarks Pierre Velinor, head of engagement at Brickendon Consulting, “This makes organisations more competitive and enhances their ability to exploit growth opportunities and generate revenue and profit”.
Diversity of thought also makes for more stability during unforeseen challenges and times of crisis, something which is essential for startups, of which there are a multitude within Fintech.
The dangers of homogenous leadership were illustrated during the alarming financial crisis of 2008, in which the male-dominated incumbent banks largely failed and proved untenable. Fintechs will surely fare better and prove more resilient during future economic crises if they pursue greater gender balance.
So how do we fix this?
The good news is that there’s a lot of different ways that we can work to combat the gender inequality found within fintech.
There are many steps companies can actively take to ensure greater female representation within their workforce. Asking why there are less female applicants than male applicants is a good place to start, and may result in crafting more inclusive job descriptions, altering the interview process, or making the effort to reach more diverse talent pools.
There’s also the approach of making female hires a business priority, and creating women-majority candidate shortlists, understanding the positive impact a female hire will have on the overall team.
“We need a two-pronged approach focused on attracting new female entrants into the sector and progressing the talent we already have,” explains Mr. Velinor, “The key is to bring the excitement of FinTech into the education system earlier, showing young females the benefits of working in such an innovative, forward-looking sector. We also need to encourage schemes such as returnships – designated programmes and support systems aimed at helping those returning to higher-level, higher-paid positions after an extended career break.”
A sign of the times
The pandemic has given us the perfect opportunity to become more accommodating to work-life balance requirements, often a sticking-point that can dissuade women from work. The wide adoption of remote and flexible working means that it has never been easier to reach a wide talent pool of women who previously may have been prevented from applying for and accepting work due to needing flexible hours or not being open to relocation.
If we don’t take advantage of this great opportunity now, when will we?
The final and perhaps most overlooked approach to achieving greater gender diversity within Fintech ties directly back to the third problem highlighted at the beginning, that of a lack of diversity within the customer and user-base.
“Instead of forcing diverse hires through quotas and rules, there’s another way,” states Sophie Krishnan, chief operations officer of WorldRemit, “it starts with the customers. Bring in and deeply listen to customers who are from more diverse walks of life than your initial base. … Homogeneous teams will soon realise that they have a hard time connecting easily with those customers who are different. So to grow the business they will seek to be part of teams that can understand those differences. They will naturally better value, recruit, promote and listen to colleagues from underrepresented backgrounds.”
Broadening the Fintech customer-base to meet the needs of women uncovers a fantastic business opportunity. Think of the women who make decisions concerning their household finances, and how much of the world’s income is controlled by women, and then the real untapped opportunity that stands before Fintech for the taking will become painstakingly clear.
Addressing and including women as customers will result in greater innovation, which will make for a disrupted market that continues to adapt to the times – something at the fundamental core of Fintech’s rise and success.
You can find Mana Search’s action points to ensure a more diverse future within Fintech within our Equality, Diversity, and Inclusion Statement here.