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While fintech may be the emblem of progress when it comes to the way we pay for stuff, lack of diversity continues to be a problem in the industry.
Women often fall behind men in leadership roles. Only seven percent of fintech founders are women, according to a study by Deloittle. On top of that, in the last five years, fintechs with founders who are women have received on average 50 percent less capital in their funding rounds than fintechs founded by men.
“Both the finance and technology industries have historically been very male focused, so fintech, in combining the two, is naturally very male heavy,” said Gemma Young, founder of Women of Fintech, a UK-based nonprofit organization fighting inequality in the fintech industry.
Women of Fintech strives to solve gender imbalance in the industry by hosting events featuring powerful women in fintech, including Anne Boden, CEO and founder of Starling Bank.
It also backs events and programs that inspire young girls to love math, rather than fear it. The organization supports STEM programs and helps kids from underserved areas learn skills, like coding, they could use to succeed in a fintech career.
Part of the problem, Young said, is that kids are taught from an early age what they should and shouldn’t be interested in.
“I live between two schools. One has a sign saying ‘Boys school specializing in science and maths’ -- the other says ‘Girls school specializing in music and English’,” said Young. “This is so negative to the future diversity of all industries, to tell children from an early age that science and maths are for boys.”
One of the companies that works with Women of Fintech is The Realization Group, a marketing consulting agency focused on fintech. The company has been a big help to the organization in supporting STEM projects, including coding classes and virtual work experience videos over lockdown.
“To create a change, we need to look at how we can entice more women into tech and STEM areas and this can only be done at a grassroots level,” said Colin Slight, co-founder of The Realization Group. “This approach, while more time-consuming, is the only way to make a real difference for the long-term.”
Another grassroots organization promoting gender equality is NYC Fintech Women, a volunteer organization that has over 5,000 members, including people in traditional finance, VCs, institutional enterprises, and of course, fintechs -- companies like Adyen, Stash, and Plaid. The nonprofit’s goal is to connect and empower women in the fintech industry.
Before the pandemic, NYC Fintech Women had hosted over 50 events, averaging 200 attendees, for women in the industry to network.
Now with the pandemic, creating successful networking events is not as easy. There are still virtual events that take place, though.
One of the members of the organization is Nicole Newlin, vice president of solutions at Ocrolus, a fintech infrastructure company. She joined NYC Fintech Women a couple of years ago.
“Our events were a great way to not only cover valuable topics that educate our members, but also a terrific way to network post-event,” said Newlin. “It was so rewarding to take note of women who found jobs and offered or received advice about professional development from our events. We are trying to recreate that as best as we can.”
The organization has been working to achieve its goals in other ways now. It’s been promoting and empowering women through social media channels. It has over 5,000 followers on Instagram and LinkedIn. Through social media events like Fireside Minute and Fintech Female Friday, the organization gives women voices to educate on topics in fintech and to share their stories in the field.
“We were able to pivot effectively during the pandemic with virtual events, including networking and increased communication to our members,” said Newlin.
But while people are paying more attention to gender inequality in the industry, there’s still not enough action taking place, said Newlin. “The awareness is certainly there but the execution is lacking.”
Newlin cited mistakes at the recruitment level as a major culprit. In brokerage and banking, where she worked most of her career, leadership diversity is a problem -- that’s translated into fintech, too.
“Generally, gender equality in leadership roles remains a problem. A strong recruiting team with resources to fill the pipeline with candidates is an absolute requirement,” said Newlin. “Often that muscle is not developed until it's too late and the organization has built their leadership team; then it becomes a backfill situation, which is disappointing to me.”
Part of the problem may be that you need diversity to create diversity.
“Without diversity on the boards supporting these fintechs, I see a lack of opportunity to look to a broader network for strong candidates,” said Newlin.
Then there’s the issue of how we’re defining gender equality in fintech, said The Realization Group’s Slight. It’s not enough to count how many men and women you have per company -- you also have to take into account what they’re doing in the company.
“The thing with gender diversity in this industry is that we need to look at it per work sector to create change and not per business,” said Slight. “A company may boast a 50/50 split in terms of gender, but when you break it down, their tech team may still all be predominantly men and their marketing team may be predominantly women.”
Finally, people in the industry may simply not see gender equality as a priority right now, but rather as another way to establish their companies’ culture as one that cares about equality.
It may be worthwhile to change this mindset since equality in fintech could mean more success for companies in the long run.
“By having a gender balanced team, you are able to come up with solutions to appeal to a wider audience. This is what has allowed the fintech industry to come up with such innovative solutions to banking over recent years,” said Slight.
“Diversity in the industry has seen the birth of banks such as Monzo and Starling turning banking as we knew it, on its head and offering a new kind of banking that the younger generation wanted.”