The Gender Gap in FinTech: A Call for Change
In 2022, a striking 70% of senior men expressed a positive view of the FinTech industry’s diversity and inclusion performance. In stark contrast, only 30% of women shared this sentiment. Fast forward to 2023, and the situation remains largely unchanged: women still constitute less than a third of the FinTech workforce and face significant pay disparities compared to their male counterparts. At BanklessTimes.com, we’ve delved into how the FinTech industry supports female talent and explored actionable steps companies can take to promote gender equality.
The Current Landscape of Women in FinTech
FinTech, straddling both the financial services and technology sectors, presents a troubling picture for gender representation. While women make up nearly half of the workforce in financial services (44%), their presence in FinTech is alarmingly low at just 28%. This trend is even more pronounced in the broader technology sector, where women account for only 26% of employees.
The male dominance in FinTech is staggering, with men holding 72% of positions. The disparity is even more pronounced among founders: only 13% of founders are women over the age of 35, and while younger women (under 35) fare slightly better at 17%, these figures are still concerning. This gender imbalance is not unique to FinTech; similar patterns are observed across technology, banking, and financial supervision sectors.
2022: A Year of Mixed Progress
Despite the challenges, 2022 was hailed as a landmark year for women in business, with over 150,000 companies launched by women in the UK—double the number from just four years prior. However, female-led businesses still represent only 20% of all UK businesses. The disparity in access to venture capital remains stark: in 2022, female founders received just 2p for every £1 of equity investment, while mixed-gender leadership teams garnered only 14p. This leaves all-male-led firms with a staggering 84p.
Venture capital firms must recognize that diversity of thought is crucial for understanding the needs of underrepresented markets. The current male-dominated landscape in FinTech limits the industry’s ability to create products that resonate with a broader audience. With more women in the workforce, FinTech companies could develop technologies that appeal to a more diverse user base.
The Gender Pay Gap in FinTech
The gender pay gap in FinTech is a pressing issue, standing at 22%, significantly higher than the UK average of 15% across all sectors. While this gap is slightly better than the 27% in the technology sector and 26% in financial services, it still reflects systemic issues. Research by Ernst & Young indicates that the male dominance in technical roles, which command higher salaries, is a primary driver of this gap. Women are often relegated to less lucrative non-technical roles, such as human resources and marketing.
Other factors exacerbate the pay gap, including the high cost of childcare in the UK and the reluctance of women returning from maternity leave to negotiate for fair salaries. The challenges extend beyond pay; many women in FinTech feel their contributions go unrecognized, with 70% expressing dissatisfaction with their visibility in the workplace. Additionally, 65% reported a lack of transparency in promotion processes, while 46% experienced discrimination.
Addressing the Recruitment Challenge
A common narrative among FinTech founders is that women simply aren’t applying for roles in the industry. This perspective shifts the responsibility away from companies to create inclusive environments. At Bankless Times, we advocate for a proactive approach: FinTech firms should investigate the barriers preventing women from applying. This includes examining the composition of leadership teams, the transparency of recruitment processes, and the flexibility of employment terms.
Engaging with organizations focused on women’s career advancement, such as Women in Technology, can help companies develop recruitment strategies that emphasize diversity. Furthermore, increasing the visibility of female leaders in the industry can inspire young girls to pursue careers in tech. Encouraging women to participate in industry events not only highlights their achievements but also fosters a sense of community and recognition.
Investing in Women’s Recruitment and Retention
To foster gender equality, FinTech companies must invest in the recruitment and retention of women. This can be achieved by placing women on leadership tracks and implementing flexible working arrangements that accommodate childcare responsibilities.
However, the most critical step is to address the gender pay gap directly. By increasing transparency around salaries and pay structures, firms can contribute to a more equitable workplace culture. This commitment to fairness not only benefits women but also strengthens the overall health of the organization.
The FinTech industry stands at a crossroads. By actively addressing gender disparities and fostering an inclusive environment, companies can unlock the full potential of their workforce and create a more equitable future for all.