The 2021 International Women’s Day (IWD) slogan is #ChooseToChallenge, as “a challenged world is an alert world and from challenge comes change. So let’s all choose to challenge.”

While the rapid pivot toward digital transformation spurred on by the Covid-19 pandemic helped orient financial services toward a largely digital future, the impact it bore on gender diversity in fintech and female access to financial services was mixed.

In the lead up to IWD, Mel Tsiaprazis, COO at digital workflow provider Nivaura spoke to Finextra Research about the core sticking points which still frustrate female representation across financial services, specifically fintech.

In short, Tsiaprazis argues that we did not see a marked improvement toward gender representation across fintech during 2020, and improving gender diversity across the financial sector is part of an ongoing agenda that needs to be addressed by every organisation, and at every level.

“While efforts continued at pace to raise awareness of the gender divide within the financial sector over the past year, statistics show that change is still happening too slowly. Indeed, it remains that women make up just 7% of fintech founders.

“Furthermore, the proportion of global funding to female-only founders declined last year to 2.3%, compared to 2.8% in 2019, which was already a miniscule amount.”

How has Covid-19 hurt female financial health?

We’ve heard ad nauseum that the pandemic has driven unparalleled digital transformation across financial services, but has this development benefitted women who rely on progressive digital tools for financial inclusion? The answer isn’t entirely straightforward.

While the entire world is facing challenges caused by the pandemic, Tsiaprazis argues that women are among those most affected by the economic and social downfall.

She explains that the pandemic will push 96 million people into extreme poverty by 2021, 47 million of whom are women and girls. This is particularly poignant in high-growth countries where adoption of digital financial solutions is picking up rapidly, even before the pandemic.

“The problem is that while a shift will most certainly have increased awareness of the digital-first financial tools available, access still comes down to opportunities. If women make up the large majority of people pushed into poverty, they won’t have access to smartphones, for example, which enable access to mobile money - the most popular digital-first financial service in regions like Africa, Latin America and South East Asia.”

However, as highlighted by Finextra Research while “migrants can exert individual and collective influence by leveraging remittances, both as recipients and senders, regardless of the gender of the sender, remittances are usually directed to mothers, daughters or to women looking after the children of migrants.”

The UN observes that remittance sending behaviour of migrant women tends to involve a higher financial cost as the smaller, more frequent sums they send incur greater transaction fees.

Tsiaprazis notes that Kenya’s M-Pesa, the mobile money wallet operating across sub-Saharan Africa introduced fee waivers to reduce physical currency exchange, which made the service less costly and more accessible.

“This of course isn’t specific to women but likely has a huge impact on their day-to-day access. We should continue to see an increase in activities like this which will ultimately increase access overall.”

Female representation in fintech

During Sibos 2020, University of Oxford Professor Dariusz Wójcik, professor of economic geography, University of Oxford warned: “There is a real threat that fintech will set us back particularly in terms of gender diversity.”

He continued that the development seen in the fintech sector should be viewed as a mixed blessing: “On the one hand we have improved diversity in terms of accessibility of financial products, on the other, fintech is a male dominated culture and women face a number of barriers across STEM.”

Wójcik’s findings resonate with Tsiaprazis’ two-pronged observation, which outlines that the pandemic has had a positive effect on access to roles not just for women, but for those within minority groups for whom it is no longer mandatory to relocate to prohibitively expensive fintech hubs such as London.

Yet, these remote working scenarios have also brought about a rise in invisible labour with women typically bearing the brunt, damaging progression professionally as they have less spare time than their male counterparts.

“One statistic that stuck out to me is that women represent 39% of the global workforce but accounted for 54% of job losses as of May 2020. There is no denying that the pandemic has disproportionately disadvantaged women.

“Specifically within the fintech sector, there isn’t much room for backpedalling, given that to begin with women only represented 30% of the UK’s fintech workforce, and only 14% of fintech boards have women on them.”

A dearth of female funding and founders?

Though Tessian reports that the pandemic has positively impacted the career of women working in cybersecurity, it hasn’t been smooth sailing across the board. Deloitte’s October 2020 report found that in the first six months of 2020, investment into female founded or co-founded startups was significantly less than that invested in male-founded startups, $875 million versus $12 billion to be exact.

While the average amount per investment was not strikingly different: c. $43.75 million and c. $49.38 million respectively, the fact that only 20 female startups received this investment compared to 253 male-founded startups is concerning to say the least.

Tsiaprazis comments that in order to start rectifying investment discrepancy, incumbent financial institutions have a role to play by demanding that the fintechs they choose to work with adhere to the gender diversity standards of the financial institution itself.

“Every discussion at board level regarding the success of the business should focus on diversity of thought and how this will not only drive the mission of the business but also hugely improve the chances of reaching organisational goals.

This goes beyond the financial institution’s own employees and extends to the clients and organisations that they choose to work with or even invest in, Tsiaprazis continues.

“VCs set out criteria for fintechs to meet before they consider funding, and equal female representation should form part of these criteria. I know I’d like to see the 2.3% of funding that goes to female-only founders increase dramatically within the next five years.”

Where are the female founders?

Deloitte reported that as with other industries, women in the fintech community are seeking opportunities to fill unmet needs. “They are generating innovative ideas and creating solutions based on their own disappointing or frustrating financial services experiences.”

It found that while there has been progress made since 2010, this progress is limited. Startups with all-women founding teams accounted for 3.1% of the entire pool in 2019 and increased from 2.4% from 2010, but a mere 1% improvement over a decade is disappointing.

Amber Ghaddar, founder of AllianceBlock, decentralised capital market provider, comments: “actionable solutions geared towards reducing the gender pay gap and increasing gender diversity in tech should be a high priority for the industry as a whole.

“Direct investment into female-led startups can certainly empower women to garner the same footing in the industry. Numbers show that if women created businesses at the same rate as men we would be adding £250 billion to the UK economy and 1.1 million new businesses. Therefore, investing in women is not just about gender equality anymore, it is about reviving the UK economy post-Brexit.”

Is AI still the answer for increasing female representation?

Once celebrated for its impartiality, the fallibility of AI to improve diversity in recruitment is still yet to be resolved.

Shawn Tan, CEO of deep-learning software company Skymind, believes that AI is particularly helpful in recruitment when there are large volumes of data to sort through quickly. Machine learning tools like chatbots can help to cut down the time it takes to sort through enormous amounts of applications, by asking candidates early-stage questions.

However, Tan furthers that “some recruitment processes have used technology that has a damaging effect when AI is left to make hiring decisions on its own, so no, I don’t think AI is ready to operate independently of human intervention just yet.”

In fact, Tan agrees that technology can sometimes be as biased as humans when attempting to replicate past hiring decisions. He explains that “AI recruitment tools have been found to discriminate against women as they lean towards favouring employees similar to their existing workforce, who are men.

“However, at the same time, there are AI-powered gamified assessments that are backed up by neuroscience which can produce accurate and unbiased candidate data, arguably creating a playing field fairer for all applicants.”

When it comes to female representation within the AI workforce itself, Tan refers to research from the World Economic Forum (WEF) which illustrates that around 78% of global professionals with AI skills are male - this gender gap is three times the size in other industries.

Tan states that this gap begins at secondary school and to rectify it, “we need more women taking STEM subjects, we require more mentoring programmes to encourage women and people from different backgrounds to enter technology and AI professions, and to nurture their career growth once they start work.

“The AI workforce needs to proactively advertise that it is open to women and that it welcomes them into the industry. Team leaders also have a special role to play - I think they must ensure they are accessing diverse talent pipelines when they are growing and building their team. This could mean looking at more innovative ways of sourcing talent, such as hackathons run by community organisations.”

Finding the right pressure points for change

It is easy to be cynical about quantifying progress toward female representation across fintech, because by focusing strictly on the disparity in numbers we don’t have as much room to appreciate the improvement. Unfortunately, the latter approach may not be quite as conducive to achieving results.

Determining the best approach toward instigating greater gender diversity is equally challenging, and the question of whether we see more progress being led proactively by private companies or in response to regulatory pressure may help to refocus and re-align the most effective methods to prompt action.

Tsiaprazis believes the answer varies country to country. “There is definitely an argument for having regulations in place. There are studies showing that companies required by law to achieve equal gender representation in boardrooms have higher diversity and skill levels than those in countries that have voluntary quotas.

“In the UK, sadly, we only have a voluntary gender diversity target of 33% at board level for FTSE 100 firms. Across the channel in France, any business with 500 employees and €50m in revenue must have 40% female representation on their boards.”

Notably, Tsiaprazis continues that the businesses which are performing best regardless of regulation or programmes in place to ‘do their bit’ are those that actively recognise the benefits gained by having women on boards.

“Starling Bank is a great example of this, Anne Boden often speaks about how gender equality ‘makes for a more successful company.’ At Nivaura, I’m particularly proud that we have recognised the challenge of diversity and irrespective of our size, are having an open dialogue with actionable steps to bring in greater diversity at all levels from junior to board level.”

The reasoning is echoed by Ghaddar who states that “when it comes to supporting women in tech, the time for talk has long passed. There already exists a common consensus that the industry is dominated by men who are statistically much more likely to earn more money than their female counterparts.”

Looking beyond gender for true success

Tsiaprazis qualifies her remarks to illustrate the wider context, noting that by focusing solely on female advancement society is missing the bigger picture.

“Women will only be given equal opportunity once diversity is intrinsic to the way we envision workforces. Businesses need to reshape and focus on diversity of thought. Take a business that is building a financial product for women, for example - how can they ensure that they build the best product possible for its audience? You hire someone who understands that audience. It’s not always about hiring ‘the best person for the job’; it’s about hiring someone that believes in the mission of the company.

“Frankly, you’re not going to find these people through out-dated traditional hiring avenues. Businesses need to celebrate and encourage employees from all kinds of different backgrounds, whether that is educationally, culturally, or even their previous experience. If everyone is cut from the same cloth you can only re-create that same cloth.”

This goes beyond gender, as while fintech is often celebrated for its pioneering ways, the racially monotonous boards we were accustomed to in old-world financial services are becoming increasingly difficult to ignore.

“Business leaders should lead by example. It is our obligation to search for talent from a more diverse pool and our duty to foster and nurture talent that brings diversity to a workforce and set them up for success. Ultimately, it comes down to teaching organisations to listen to and trust in different and new perspectives.”


Tsiaprazis wishes to leave us with a final question: “What steps are you taking today to actively drive greater diversity of thought in your workplace, your investments, your world?”