In conversation with Finextra Research, Donna Parisi, head of finance and fintech at Shearman & Sterling and Michelle Tran, founder of NYC FinTech Women, discuss the persistent gender disparity within fintech and how women can and should be encouraged to make their mark.
Parisi and Tran believe that the scarcity of women in the space greatly inhibits commercial success in this highly competitive industry. A recent survey by LendIt found only 37% of fintech workers are women, amounting to just 19% of the C-suite, while All Raise found that just 7% of all VC deals in fintech during 2019 had a female CEO.
There are a number of significant reasons behind the disparity in representation, Parisi states, with a large contributor being the inherent male networks across the financial services and technology sectors.
“As founders and leaders seek to build their business and teams, they lean on their own networks to find talent. As is the issue in technology, their networks are mainly male and thus females are less aware of opportunities or asked to consider opportunities.”
If the shoe fits
Women may feel that the culture of fintechs is not be suitable because it is largely a male dominated environment. Tran contends that if there aren’t enough females represented in positions of leadership, women may question whether male leaders at the firm support the creation of a culture of equality and acceptance. Tran and Parisi believe that fintech firms must instil a strong workplace culture that supports women, while establishing clear guidelines on what is and what is not acceptable behaviour towards women.
Concern about the nature of working for a fintech, especially those with a fintech feel, trickles down to the logistics of a career in the space as women may fear unpredictable hours or insular male leadership. Tran adds that “women may not feel supported as they progress personally and in their career. For example, for women entering motherhood, is a smaller fintech going to accommodate full maternity leave and the requirements of a working mother?”
Why push for parity?
It is clear to Parisi that the closer to gender parity the fintech space inches, the better it is for business. Diversity of thought, product innovation, lower staff turnover and a more secure workplace culture are reinforced and work to improve the company’s overall performance.
“Fintechs are businesses. As with any business, there are roles that are business oriented and not only technical in nature. There is an opportunity for women to enter the fintech sector in roles such as HR and marketing,” says Parisi.
Finastra’s Mehjabeen Poonawala, told Finextra Research that by “having a diverse workforce and a workplace that upholds gender parity, fintechs can create stakeholder value and deliver stronger, sustainable business growth.” She also argues that customer experience will be the core differentiator between banks and banking services in the future regarding better understanding how to innovate successfully.
“Gender diversity and its impact on innovation directly affects the bottom line,” Poonawala adds, and “companies with the greatest gender diversity can generate 34% of their revenues from innovative products and services; with more diverse leadership teams, companies earn more from innovation, with higher EBIT margins.”
The finance to fintech track
A concerning trend highlighted by both Parisi and Tran is a lack of effective crossover hiring. Women across the financial services landscape are experienced and equipped with unique skills suited to address the needs of a fintech.
“Skills such as relationship management, risk assessment, curation of thought are all highly valuable because it adds to the balance of the team,” explains Tran. “Women in technical roles can have a different approach to product that brings in the skills more typically attributed to females which then can add to thoughtful product innovation.”
However, despite the value of this direct or transferable expertise, very few fintechs effectively conquer the crossover challenge during the hiring process. Parisi believes there are key changes such as targets that can be made to improve the hiring process and address these issues: “The hiring process should have stated requirements for the percentage of female applicants and interviews.”
Tran compares this to California's new requirement for female board representation, instituting a specific metric geared towards female inclusion will include more females in the applicant pool or ensure there is a goal metric when looking at the diversity of the team.
“We worked with a firm recently that wanted to increase the 2% representation on their technology and product team and quantifying the goal will give teams a clear metric of success,” Tran concludes.
Also, learning the ‘fintech lingo’ and generating new networks within the industry are crucial to building a deep understanding of the dynamics at play.
With International Women’s Day celebrated globally over the weekend the conversation is certainly timely. In less than a month, all organisations in the UK with over 250 employees will be required to publish their firm’s gender pay gap findings, and with less than a month before reporting the deadline only a quarter of applicable firms have published the results.
It has been reported that many UK firms who have published their pay gap numbers early are paying the average male nearly 25% more than their female counterparts, HSBC reported an overall pay gap of 47.8%.
By April all applicable firms will have reported, making it easier to gain a clearer understanding of the UK’s development toward equal gender representation during 2019.