The Fintech Revolution: An Overview of Gender Inequality in a Booming Industry

Fintech, short for financial technology, has become a ubiquitous term that encapsulates the innovative intersection of technology and financial services. From mobile payments to digital banking and investment platforms, fintech is reshaping how we manage our finances. Even if you haven’t explicitly heard the term "fintech," chances are you’re already engaging with it through services like Klarna, ClearPay, Revolut, or Monzo. In 2023 alone, the fintech sector attracted a staggering US$51.2 billion (£40.5 billion) in global investments, underscoring its explosive growth and potential.

However, amidst this financial influx, a troubling trend persists: the glaring underrepresentation of women, particularly in leadership roles. Research published on March 5 reveals that women hold only 4% of CEO positions, 18% of executive committee roles, and a mere 7.7% of entrepreneurial positions within the fintech landscape. Notably, there is not a single woman on the executive leadership team of the prominent fintech company Revolut. This stark gender disparity raises critical questions about the inclusivity and future direction of the industry.

The Triple Glass Ceiling

Fintech operates at the crossroads of three sectors: finance, technology, and entrepreneurship. Each of these domains has its own historical gender biases, which collectively form what researchers refer to as a “triple glass ceiling.” The entrenched male dominance, the privileging of masculine traits, and rigid gender stereotypes in finance, technology, and entrepreneurship create formidable barriers for women seeking to break into or ascend within the fintech sector.

Where Are All the Women?

The sexist culture that has long plagued traditional financial services has unfortunately found its way into fintech. Interviews conducted with both female and male fintech professionals reveal a disheartening trend: recruiters often hesitate to hire women due to outdated assumptions that they will prioritize family over career. This bias not only limits opportunities for women but also perpetuates a cycle of inequality.

Interestingly, many female professionals report that they often have to work harder to achieve the same recognition as their male counterparts. Ideas proposed by women are frequently dismissed, only to gain traction when echoed by male colleagues. This phenomenon highlights a troubling reality: in many cases, the performance of masculinity, rather than the quality of work or ideas, is what is valued in the fintech space.

Language and Networking Barriers

The language used in fintech job descriptions often reflects a masculine bias, with terms like “hunter” and “execute” dominating the lexicon. Such terminology can deter female candidates from applying, further narrowing the talent pool. As a result, men are more likely to be hired, as they tend to align more closely with the characteristics sought after in these roles.

Networking, a crucial component of career advancement in fintech, is another area where women face significant challenges. The informal nature of networking often excludes women, as these gatherings typically occur outside of regular working hours. Given that women are more likely to have caregiving responsibilities, they may find it difficult to participate in these male-dominated networking events.

Educational and Entrepreneurial Barriers

Deep-rooted stereotypes continue to discourage girls and women from pursuing careers in science, technology, engineering, and mathematics (STEM). This lack of encouragement leads to a significant gender gap in technology roles, with only 1.5% of chief technology officers or chief information officers being women, compared to 37% of chief marketing officers.

In the realm of startups, which make up a significant portion of the fintech industry, an entrepreneurial glass ceiling prevails. Women are less likely to seek funding for their ventures, and when they do, they often face greater hurdles than their male counterparts. In 2023, less than 2% of venture capital funding in Europe went to female-founded companies. This disparity is compounded by the fact that the venture capital industry is predominantly male-led, creating a cycle where male entrepreneurs are more likely to receive funding due to shared experiences and backgrounds.

The Impact of Gendered Expectations

Socially constructed gender differences also play a role in the challenges faced by women in fintech. Factors such as confidence, risk aversion, and pitching styles can lead to gendered questioning during funding pitches, further disadvantaging female entrepreneurs. The stereotype of the successful entrepreneur as male reinforces these biases, making it more difficult for women to gain traction in the industry.

The Call for Change

Fintech companies often tout their commitment to disruption, inclusion, and progress. However, true innovation cannot stem from a homogenous workforce. If products and services are developed solely by individuals with similar backgrounds and experiences, the industry risks overlooking the diverse needs of its user base.

Despite the significant investment and growth in fintech, the industry is falling short in terms of gender diversity. To effectively address the needs of a diverse population, fintech must prioritize inclusivity among its creators. Otherwise, it runs the risk of perpetuating inequality and squandering potential economic and social benefits.

Awareness of these gender disparities is crucial for consumers and stakeholders alike. Most adults in the UK engage with fintech daily, often without realizing it. By understanding the underlying gender inequalities, fintech users can become advocates for change, pushing for a more equitable industry.

Creating a more inclusive and equitable workplace in fintech will require collective action and pressure from all sides. While the challenge of dismantling the triple glass ceiling is immense, it is a challenge that the industry cannot afford to ignore. The future of fintech depends on its ability to embrace diversity and foster an environment where everyone can thrive.