It’s no secret that there is a gender gap in the fintech industry. With tech and finance already considered as male-dominated fields, a study found that A 2017 study found that less than 30% of the fintech workforce in the UK was made up of women. It’s clear that fintechs need to do more to support women in the sector.
One particular champion of this cause is Alexandra Roddy, chief marketing officer and executive vice president of partnerships at Zafin, a provider of cloud-based products and pricing solutions for banks. Roddy has more than 20 years of experience in marketing, technology, strategy and product development with leading financial services companies, including Bank of the West, Charles Schwab, Franklin Templeton, Wachovia and Wells Fargo.
Here she shares her views on how fintechs can foster change and eliminate the gender imbalance.
Alexandra Roddy, chief marketing officer and executive vice president of partnerships, Zafin
As an industry, fintech is both relatively new and rapidly growing. The term “fintech,” coined in 1993 at Citicorp’s Financial Services Technology Consortium, didn’t show up in most executives’ (even financial services executives’) vocabularies until the middle of the last decade.
As of 2018, the global fintech market was valued at about $130 billion, with projected annual growth of 25% through 2022. But how did it all begin? And, why has fintech emerged as a rapid-growth industry? Essentially, the fintech industry’s reason for being is to transform the financial sector, which is 10+% of the S&P. fintechs fuel innovations that improve and even transform financial services.
Almost all fintechs do one (or more) of three things:
- Provide new services to an existing market
- Open a new market to existing services—often delivered differently
- Increase efficiency across the financial ecosystem
When it comes to opening new markets, one reason fintechs are so vital is that too many of us do not have access to the financial services we need. The World Bank estimates the number of un- and under-banked among us at 1.7 billion, but other sources put that figure at 2 billion or more. These are folks the traditional financial sector has not adequately served, often because costs are too high or innovation is too low.
Given the fintech industry’s history and purpose, it is at best ironic and more accurately dispiriting to learn that it is on pace to replicate the gender imbalance that characterises the rest of the business world, and in particular, the imbalance that prevails in its two forebearers, financial services and technology.
A few grim stats to set the stage include:
- For fintechs, women represent just 7% of founders., 14% of board directors, 19% of C-suite seats, and 37% of overall workers.
- At VC firms (where fintechs are funded), women comprise less than 10% of executives.
- Of the $40B invested in US fintechs in 2019, just 1.3%. went to companies with female founders.
- From 2015-2019, the average investment in female-founded fintechs was just a hair more than 50% of the average investment in fintechs founded by men.
In summary, women are under-represented at every level of the fintech industry. Representation gets worse as you climb the ladder. And, money flowing into the sector is funnelled almost exclusively to companies founded by men.
Yet, who are the consumers of new fintech products and services? Arguably, 50% of any fintech’s target market is female.
What can fintechs plus the financial services and venture industries do to turn the tables? Although the problem has thus far proven intractable, we must try harder and be bolder.
Here are some concrete steps your fintech can take to correct the imbalance, starting today:
- For every new opportunity at every level, ensure a diverse slate of candidates.
- Recognise that we all have work to do. Accept that all of us have unconscious biases, and know that both men and women discount the authority and credibility of women.
- Strike preconceived notions about the best person for any given job. Instead, consider the possibilities—all of them.
- Think about the skills that will make a difference to your company’s success more broadly: communication, collaboration, customer-centricity, a growth mindset, empathy and more. These skills are likely to be equally distributed across genders. Hire and promote accordingly.
- Invest in creating a more inclusive culture. Support spaces that encourage alternative voices and different perspectives. Amplify the contributions of those who might otherwise be unheard. Pay attention to who speaks and for how long. Pay equal attention to whose contributions are acknowledged or ignored. Actively work to ensure parity for all.
- As you work to include all voices in the conversation better, take time to coach those who have been un- and under-represented. Explain upfront the rules of engagement, how decisions are made, and how best to use their voice. That way, when they find themselves at the table, they will not be surprised by what occurs. Instead, they will know how to perform. And for your existing executive team? Be clear about what it means to make space at the table, including talk time, active listening, acknowledging and amplifying the contributions of the un- and under-represented. Observe your team, looking for empathy and noting its absence. Soft skills are essential to inclusion.
- Re-stack the top. The top of the house might be where a strong female executive with relevant expertise and a track record of success from another industry can bring leadership skills, strategic thinking, communication and collaboration to catalyse success. Think of these skills as equally important to more traditional technical and financial skills, because they are. They are a means to open the aperture, broaden the conversation and arrive at more thoughtful strategies and plans. Diversify your board. We know that diverse boards make better decisions, so why wait?
- Double-down on customer-centricity. After all, half of your customers are female. When you focus on the customer, a female perspective becomes even more relevant, and business results are proven to follow.
Meanwhile, it behooves all of us to remember that the data around diversity in business. A wider array of perspectives thoughtfully considered leads to better insights, more prudential decision-making and stronger business outcomes, consistently. The future of fintech absolutely must be more female.