Introduction
FinTech – a term that encapsulates a set of innovations and an economic sector focusing on the application of recently developed digital technologies to financial services – has experienced explosive growth over the past decade. As Wójcik (2021) notes, it represents a technological revolution that is fundamentally changing how we engage with finance. Often hailed as the great disruptor, FinTech is reshaping financial inclusion and holds unbounded potential (Makina & Makina, 2019). However, this narrative of disruption is nuanced; rather than disintermediation, FinTech often leads to re-intermediation, where new players collaborate with or replace traditional financial institutions (Wójcik, 2021).
Despite the excitement surrounding FinTech, a critical issue remains largely unaddressed: the significant gender imbalance within the industry. Research indicates that women are underrepresented, particularly in senior roles (Khera et al., 2022). The Kalifa Review of UK FinTech, which claimed to provide a comprehensive strategy for the sector’s future, notably omitted any mention of gender inequalities, failing to address the terms ‘women’, ‘gender’, ‘diversity’, and ‘inequality’ altogether.
The statistics are stark. In the UK, women make up only 28% of the FinTech workforce and hold just 17% of senior roles (Deloitte, n.d.). Furthermore, only 12.2% of the 3,017 FinTech startups in 2019 had at least one woman co-founder (Sparks & Eckenrode, 2020). This underrepresentation is not just a statistic; it represents a collective challenge that the industry must confront to create a more inclusive and equitable ecosystem. The benefits of diversity are well-documented, with companies that embrace diversity often outperforming their competitors (Hunt et al., 2018). Moreover, achieving gender parity could potentially boost the UK economy by £250 billion annually (Rose, 2019).
To explore these gender inequalities within FinTech, we adopt a mixed-methods approach, focusing on two key questions: What is the current state of gender diversity in FinTech? And why is female participation in FinTech so low?
Gender Inequalities in Finance, Technology, and Entrepreneurship
The concept of the glass ceiling, which describes the invisible barriers preventing women from advancing in their careers, is particularly relevant in the context of finance. In North America, women constitute 52% of the financial industry workforce, yet only 27% of C-suite executives are women (Ellingrud et al., 2021). An intersectional perspective reveals that the barriers to management-level positions are even more pronounced for individuals from the Global Majority (Kämpfer & Wójcik, 2020).
Foucault’s concept of normalization highlights how societal norms dictate acceptable behavior within financial services. Acker (1990) argues that the archetype of the "abstract worker" is male, perpetuating a culture where masculinity is the dominant identity. This male-centric culture is maintained through structural practices and self-policing, creating an environment where women often feel marginalized.
Granleese (2004) found that women in banking recognize gender-related pressures more acutely than their male counterparts. Many women navigate the masculine environment by adopting traits associated with masculinity, which ultimately reinforces existing inequalities (Kämpfer & Wójcik, 2020). The pressures of balancing work and domestic responsibilities further exacerbate these challenges, as women often bear the brunt of unpaid labor (Massey, 1995).
In technology, the situation is even more dire. Women account for only 25.5% of the UK technology workforce and hold a mere 5% of leadership positions (Andrews, Hinton, & Ash, 2017). The male dominance in technology not only perpetuates gender inequalities but also shapes the products and services developed within the industry, often leading to a lack of inclusivity in technology solutions.
Entrepreneurship presents its own set of challenges. The venture capital industry is often described as a "boys’ club," with women making up only 21.8% of VC employees and 13.7% of senior roles globally (Lee, 2021). This male dominance results in a tendency to invest in male-led ventures, with women-led startups receiving just 2.3% of VC funding in 2020 (Bittner & Lau, 2021).
The intersection of finance, technology, and entrepreneurship creates a "triple glass ceiling" for women in FinTech. The systemic barriers present in each sector compound the challenges women face, making it increasingly difficult for them to break through.
Data and Methods
To investigate gender inequalities in FinTech, we employed a mixed-methods approach, combining quantitative data analysis with qualitative interviews. This methodology is common in financial geography and allows for a comprehensive examination of gender diversity within the sector (Wójcik, 2022).
Our quantitative data was sourced from the 2019 FinTech100 report, which provides global coverage and spans various growth stages. We collected data on each FinTech, including headquarters location, CEO name and gender, founder(s) name and gender, executive committee composition, total funding amount, and company size. Crunchbase served as the primary data source, supplemented by company websites and LinkedIn profiles to ensure accuracy.
We conducted 15 semi-structured interviews with FinTech professionals and investors, aiming to capture diverse perspectives on gender diversity in the industry. The interviews were conducted digitally, which allowed for greater flexibility and access to participants. Our sample included eight women and seven men, with a focus on amplifying the voices of women in a predominantly male environment.
What is the Current State of Gender Diversity in FinTech?
Our findings reveal a stark gender imbalance within FinTech. Women held only 18.2% of executive committee positions, with a mere 4% of companies having a female CEO and 7.7% of founders being women. These statistics indicate that gender inequalities in FinTech are more pronounced than in the individual sectors of finance, technology, and entrepreneurship.
The male dominance at senior levels is particularly concerning. Over 27% of FinTechs have entirely male executive committees, reinforcing the "boys’ club" culture that pervades the industry. This culture creates significant barriers to female progression, as informal networks among men often translate into mentorship and promotion opportunities that women are excluded from.
Women entrepreneurs in FinTech face additional challenges, with only 7.69% of founders being women and the vast majority of FinTechs lacking any female co-founders. This underrepresentation creates a sense of isolation for women in the industry, as they often find themselves in environments where they lack support and representation.
Despite growing awareness of gender inequities, many interviewees expressed skepticism about the pace of progress. The lack of longitudinal studies on FinTech gender diversity makes it difficult to ascertain whether meaningful change is occurring. However, the prevailing sentiment is that the industry remains heavily male-dominated.
Our analysis of geographical regions reveals that North America, Europe, and Central Asia, where established FinTech centers exist, exhibit particularly low female representation among founders. In contrast, lower-middle-income economies show a higher percentage of female founders, suggesting that cultural and governmental factors may influence women’s entrepreneurial opportunities.
It’s a Man’s World: The Financial Glass Ceiling
The financial sector serves as a critical entry point into FinTech, and its culture often permeates the industry. Many interviewees noted that their career paths were influenced by their experiences in finance, which is characterized by a male-dominated culture. This culture is often unwittingly carried into FinTech, where women may feel compelled to conform to masculine norms to succeed.
Recruitment practices in FinTech often reflect this masculine coding, with job descriptions using language that may deter women from applying. The emphasis on traits associated with masculinity, such as assertiveness and competitiveness, can alienate potential female candidates. Furthermore, societal expectations regarding women’s roles in domestic labor can lead to discrimination during the hiring process, as employers may question a woman’s commitment based on assumptions about family responsibilities.
The demands of a career in FinTech can also conflict with family life, making it challenging for women to navigate the work-home boundary. Long hours and high expectations often leave little room for personal commitments, disproportionately affecting women who may already bear the burden of domestic responsibilities.
Networking, a crucial aspect of career advancement, is often dominated by men, further marginalizing women. Informal networking opportunities, such as after-hours gatherings, can exclude women who may have caregiving responsibilities or simply prefer not to engage in such environments. This exclusion perpetuates the cycle of male dominance in FinTech, as men are more likely to promote and mentor individuals they relate to.
Boys’ Toys: The Technology Glass Ceiling
The underrepresentation of women in technology roles within FinTech is a significant barrier to increasing female participation. Interviewees frequently highlighted the lack of women in technical positions, which reinforces the perception of technology as a male domain. In our dataset, women occupy only 1.49% of CTO/CIO positions, while they hold 37.04% of CMO roles, indicating a gendered horizontal segregation within the industry.
The male-dominated culture of technology education and careers discourages girls from pursuing STEM subjects, perpetuating the cycle of underrepresentation. Many women in FinTech expressed frustration at the lack of female role models in technical roles, which further discourages young women from entering the field.
While some interviewees acknowledged the need for increased representation in technology, there was also concern about the potential for tokenism. Women may be invited to participate in discussions or panels based on their gender rather than their expertise, which can undermine their contributions and reinforce stereotypes.
Man Up! The Entrepreneurial Glass Ceiling
Female entrepreneurs face significant barriers in FinTech, with only 7.69% of founders in our dataset being women. The venture capital landscape, often described as a "boys’ club," exacerbates these challenges. Women-led startups receive a disproportionately small share of VC funding, which can hinder their growth and success.
The male dominance in the investment industry creates a homophily bias, where investors are more likely to support ventures led by individuals who resemble themselves. This bias can lead to a lack of funding for women entrepreneurs, who may not have the same networks or access to resources as their male counterparts.
Cultural norms and gender stereotypes also play a role in shaping women’s experiences in entrepreneurship. Women may be less likely to pursue high-risk ventures due to societal expectations around risk aversion and confidence. This caution, often misinterpreted as a lack of ambition, can hinder women’s ability to secure funding and support for their ventures.
Conclusion
Women in FinTech face a complex web of challenges stemming from the intersecting barriers of finance, technology, and entrepreneurship. The presence of a triple glass ceiling significantly inhibits women’s participation and progression within the industry. Through a mixed-methods approach, we have illuminated the current state of gender diversity in FinTech and the underlying reasons for its disparities.
The quantification of gender diversity reveals a stark reality: women are vastly underrepresented in leadership roles and entrepreneurial positions. The cultural norms and societal expectations that permeate finance and technology continue to shape the experiences of women in FinTech, perpetuating a cycle of exclusion and discrimination.
To foster a more inclusive and equitable FinTech ecosystem, it is essential to address these systemic barriers and promote diversity at all levels. The potential for innovation and growth within FinTech is vast, but it cannot be fully realized until the glass ceilings are shattered.