Why is FinTech still dawdling on diversity?

The people benefiting from the advance of FinTech and the way finance is experienced by consumers all over the world are many.

They are black, white, LGBTQ+, male, female, young and old…

But the people driving the advance, it seems, are not.

Or, as Professor Dariusz Wójcik, Professor of Economic Geography at the University of Oxford, puts it: “On the one hand we have improved diversity in terms of accessibility of financial products. On the other, FinTech is a male-dominated culture and women face a number of barriers.”

FinTechs may be transforming financial services in terms of tech advances. But their progress, it seems, is much slower when it comes to tackling gender equality.

Women in FinTech are seriously under-represented

• In 2019, women held just 21.9% of leadership positions in financial services, according to Deloitte.
• In the UK, says a survey by Innovate Finance, only 17% of FinTech companies have female founders and women account for less than 30% of the sector’s overall workforce.

It could be said that the lack of diversity at C-suite level is as outmoded as the legacy systems the industry is succeeding in disrupting …

So what can be done to overcome the stubborn gender gap in FinTech leadership and what is behind it?

The elephant in the room is that women have long been under-represented in the ‘STEM’ subjects of science, technology, engineering and mathematics.

These are skills that are traditionally highly sought after in the financial services sector. Currently, though, only 35% of college-level STEM students in the UK are women.

But there’s also the fact that those entering the FinTech sector have often come from the traditional financial banking sector or from the technology sector. These, too, are both fields that are notoriously challenged by the diversity and inclusion agenda.

Women represent an ESG advantage

There’s no denying that diversity builds stronger businesses and is a source of competitive advantage.

Investors have not missed the trick that companies with higher environmental, social and corporate governance (ESG) scores perform better than their peers.

In 2019, the S&P Global Market Intelligence Quantamental Research Team produced a report called When women lead, firms win.

Its findings? One of the most comprehensive studies of its kind, it examined the performance of firms that have made female appointments to their CEO and CFO positions.

It showed that in the 24 months post-appointment, female CEOs saw a 20% increase in stock price momentum and female CFOs saw a 6% increase in profitability and 8% larger stock returns.

Diversity and Inclusion (D&I), in other words, matters to all sectors, and to the FinTech field too.

Because as the late Supreme Court Justice Ruth Bader Ginsburg put it well: “Women belong in all places where decisions are being made.”

FinTech female stars shining the way

Fortunately, some FinTechs are leading the way as the latest Top 25 Women Leaders in Financial Technology of Europe for 2021 report by The Financial Technology Report shows.

It says its 2021 awardees “have helped lead their organizations amidst rapid digitalization of the financial industry, an increasingly complex regulatory landscape, rising global competition, and increased consumer demand for digital financial products.”

Their top five are these:

1. June Felix, CEO, IG Group, a global leader in online trading, based in the UK.
2. Elona Ruka-Wright, Chief Risk Officer and Chief Audit Executive, Finastra, one of the largest fintech companies in the world, based in the UK.
3. Virginie Degeorgis, CEO, Tessi, a business process services partner that enables companies to improve their performance by optimizing their business processes and their management of the customer experience, based in France.
4. Myriam Moufakkir, Chief Business Transformation Officer, SCOR, one of the world’s largest reinsurers, based in France.
5. Dylani Herath, Director of Engineering, FIS, the largest financial processing and payments company in the world, based globally.

FinTech may be off to a slow start and these women may be, as the report states, “exceptional”, but they do show that the tide is beginning to turn.

To celebrate the progress that is beginning to be made in D&I in FinTech and be inspired by the other 20 female FinTech awardees, you can visit the report here.