There’s the basic, commonly-reported problem that too few women work in fintech companies. Then there’s the related problem that too few fintech companies have female founders, or even female leaders. Finally, there’s the problem that females are also under-represented in the fintech user-base.
It starts to look like an industry founded for men, run by men, making products for men.
No one intended for this outcome and it is no one person’s responsibility. But here we are, and it was, arguably, predictable. Fintech brings together two of the least gender diverse industries going.
So what? How do we fix this? Do we even need to?
Let’s start with the first gender issue. A study last year revealed that less than 30% of the UK’s fintech workforce was female.
When I speak to fintech founders about gender diversity in their companies, they nearly always say they simply don’t get equal numbers of applications from men and women, and that the people they hire are a reflection of the applicants.
That’s passing the buck a little. As a founder you might wonder why so few women want to work for your company. You might spot the problem and try to over-index on female hires relative to applications. Or you might have women only shortlists as a business-critical imperative, believing that having the best team to innovate of necessity demands diversity.
The second gender imbalance in fintech relates to senior team representation. The same study referenced above found that whilst 30% of the fintech workforce is female, only 17% of senior fintech roles are held by women. In a recent HBR study it was found that, without diverse leadership, women are 20% less likely than straight white men to win endorsement for their ideas which costs their companies crucial market opportunities. It is important to remember that diversity of thinking underpins how fintechs and incumbents see and understand unmet needs in under-leveraged markets.
It gets even worse when we look to founders of fintech companies. A quick run through of the founders of companies selected for the fintech 50 reveals 118 men, and just six women. That’s just over 5%.
Part of the problem here comes back to the challenge of getting females into STEM related studies, which can be a provider of the skills needed to get going in fintech.
And then there’s the third gender imbalance in fintech, the one that is too little studied or discussed. That’s the gender inequality in fintech’s user base.
The limited data that’s available suggests that men are more likely to login to mobile apps designed for financial management. No large-scale fintech companies publish figures on the gender split of their user base. But it is vital to understand more about whether the gender diversity issue in fintech employment and leadership is reflected also in its user base. Enlightened companies are waking up to the power of the female purse in buying decisions – does fintech need to wake up to this too?
Take cryptocurrency investors for example. Although exact data on the gender split between male and female cryptocurrency investors is hard to find, I am pretty sure most investors are men.
An article in the Financial Times recently revealed that Uphold, a platform for moving, converting and holding cryptocurrencies that carries out background checks on users has noted that 75% of its users are men. Whilst Coin Dance, a company that tracks and provides statistics on bitcoin users, keeps a regular tab on the gender balance of the bitcoin community, noting that females make up a mere 5.7% of investors.
We need to be sure we’re building products and services that advance the ways in which women contribute to and access financial services.
Right now, I fear, we’re not.
There will be no silver bullet solution to this problem, but by identifying some basic steps we can take to start levelling out these gender diversity issues, we can safeguard the future of the fintech industry. We’re seeing some innovative solutions emerging already. One firm is offering double finder’s fees to employees that recommend successful female job candidates. Another is reviewing all its job descriptions to ensure the language appeals to female applicants.
We need to apply the same principles to solving this problem, as we do with our product: test and learn. The first step is to make a conscious effort to rebalance gender inequality in fintech. Then we can start to identify what’s working.