In 2022, 70% of senior men said that they had a positive view of the FinTech’s industry’s diversity and inclusion performance, while only 30% of women agreed with this sentiment. A year on, it seems that little has changed – women still make up less than a third of the industry and are paid significantly less than their male counterparts. Those who do find themselves working in FinTech have to overcome multiple obstacles in order to succeed. We at BanklessTimes.com have looked at how the FinTech industry serves female talent, and how companies can improve in a way that promotes gender equality.
FinTech sits within both the financial services and technology sectors, but while women make up almost half of financial services employees (44%), they represent only around a quarter of those in FinTech (28%). This number is even lower within the broader technology sector, with women accounting for just 26% of employees in this field.
The fact that men dominate 72% of the FinTech sector is shocking enough, but the imbalance becomes even more pronounced when looking at founders. Only 13% of founders are women over the age of 35, and while younger women (under 35) are faring slightly better at 17% the figures are alarming. This trend is not confined to FinTech, with similar patterns seen across the technology, banking and banking supervision sectors.
2022: The Best Year Yet For Women in Business?
Things are slowly improving, however, and 2022 was dubbed the best year yet for women in business, with over 150,000 companies being launched by women in the United Kingdom. This number is double that seen just four years earlier, in 2018. While growth is undoubtedly a good thing, the fact remains that female-led businesses make up just 20% of all UK businesses. There may be more female founders than ever before, but it seems that they do not have equal access to the all-important venture capital funding that props up the industry. In 2022, for every £1 of equity investment in the United Kingdom, female founders received just 2p. Mixed-gender leadership teams haven’t fared much better, receiving just 14p in every £1, with all male-led firms scooping up the remaining 84p.
Venture capital companies would do well to remind themselves that it is diversity of thinking that underpins how FinTechs see and understand needs in underleveraged markets. One of the main issues that we have in the FinTech industry is that men are more likely to log onto mobile apps, or invest in cryptocurrency. With more women working across the industry, companies could better ensure that the tech they create appeals to a wider and less male dominated user base.Jonathan Merry, CEO of BanklessTimes.com
FinTech’s Gender Pay Gap is Higher Than the UK Average
Pay discrepancy doesn’t just affect women funding start-ups. The FinTech industry has a gender pay gap of 22%, which is significantly higher than the UK average for all sectors of 15%. Nevertheless it is not quite as bad as the gap of 27% in the technology sector and 26% in the financial services sector. Research by Ernst & Young suggests that the primary force behind the gender pay gap within the FinTech industry is the male dominance of technical roles and jobs, which command higher salaries. Women, on the other hand, tend to hold the less well remunerated non-tech roles within the industry (such as human resources, marketing and finance). However, the ratio of tech to non-tech roles does not on its own explain the extent of the gender pay gap, with other factors at play including the extremely high cost of childcare within the UK, and the fact that women returning to the workforce after maternity leave seldom feel in a position to demand the salary that their experience merits.
Unfair pay is just one of the many obstacles that women working in FinTech have to overcome. Despite the majority of women surveyed within the industry stating that they choose to work in FinTech because they wanted to improve the financial services industry, 70% felt that their contributions were not being recognised. 65% felt that the promotion and progression process was not transparent, while 46% felt discriminated against. Women within the industry were also subject to persistent biases, related to their perceived lack of technical expertise.
Are Women Simply Not Applying for Roles in FinTech?
So what needs to be done to improve gender equality across the industry? According to a report by Deloitte, many FinTech founders put their company’s gender imbalances down to the fact that women are simply not applying for roles in FinTech. This does nothing but pass the buck. At Bankless Times, we believe that FinTech companies need to take a more proactive role in ascertaining why women aren’t applying for roles – they should be looking hard at the make-up of their leadership teams and interview panels, the transparency of their recruitment and progression processes, and the flexibility of their employment terms. Companies can also participate in career fairs that focus on women, or partner with organisations focussed on getting women into the workplace. There are many diversity associations, such as Women in Technology, that can help companies to create recruitment collateral with a diversity focus.
According to research from Girls who Code, nearly 3 in 4 girls express an interest in computer sciences at school level, yet when it comes to pursuing a career in tech at bachelor degree level this number drops to just 18%. Closing the gender gap needs to begin at primary school level, and one of the ways that this can happen is by increasing the visibility of female leaders and showing that tech is not a career better suited to men. With the majority of women within FinTech feeling that their contributions go unrecognised, encouraging women to speak at and attend industry events would not only help to create role-models for young girls considering a career within the industry, but also ensure that female staff are recognised for their achievements and have a forum to discuss them.
FinTech Companies Need to Invest in the Recruitment of Women
FinTech companies should be investing in the recruitment and retention of women, and can do this by putting women on leadership tracks and enforcing flexible working patterns that fit around childcare commitments.
While all of this is undoubtedly important, there is one key step that companies should be taking to retain the number of women on their books, and that is the enforced reduction of the gender pay gap. Through increased transparency, firms can contribute to increased gender equality and strengthen their working cultures.
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