As noted by Finextra reporter, Niamh Curran, the 2023 International Women’s Day campaign theme is to Embrace Equity and asks our world to discuss why equal opportunities aren’t enough. In this Fintech Sentiment, we have brought together a wealth of perspectives from across the fintech world, which canvas the frustrations, the efforts, the progress, and objectives for improved equity for women in the industry for the last 12 months, and the year to come.

This year, the conversation has shifted toward equity, and the importance of achieving true inclusion that goes beyond lip service, tag lines, or quotas.

How is female representation tracking across fintech?

Representation has long been a sore point across fintech, and the drive to encourage females to enter the STEM field has increased significantly over the past few years. However, significant challenges remain.

Women are still underrepresented in the tech industry, particularly in leadership roles, stated  Shweta Jain, senior director of universal banking at Finastra: “When there are fewer women in positions of power and leadership, it can be challenging for aspiring women to find role models to emulate. This can make it harder for them to envision themselves in leadership roles, which can limit their ambition and career aspirations. One of the most effective ways to overcome this challenge is to find mentors who can provide guidance, advice, and support. Look for individuals who have experience in the industry and are willing to share their knowledge and help you navigate your career path. Additionally, seek out allies who are willing to advocate for you and support your career advancement.”

Unfortunately, seeking out allies and overcoming imposter syndrome can be difficult in reality. Research published by KPMG in 2022 found that 75% of female executives across industries have experienced imposter syndrome during their careers. 54% of executive women also agreed that the more successful they become, the lonelier it gets at the top because they enter new peer groups.

On top of this, 32% of women identified with imposter syndrome because they did not know others in a similar place to them either personally or professionally.  

Speaking to the KPMG research, Jain noted that because there are so few female role models, particularly in the tech industry, this isn’t a surprise. “But when we don’t believe in our own competence, this can impact our confidence to go after bigger and better things. At the same time, women are often subject to gender bias. Whether this is unconscious bias, such as assumptions that women are not as technically proficient as men, or overt discrimination, such as being passed over for promotions or pay raises, gender bias presents another barrier to women’s progression.”

There’s also more to be done when it comes to creating opportunities for women to enter the tech and blockchain space, according to Alex Cable, area VP WEMEA at Chainalysis: “Research shows that only 23% of the people working in STEM across the UK are female and only 5% of all leadership positions in tech are held by women. Having worked in technology for three decades I’m increasingly excited by the numbers of women entering the workforce, and our challenge today is to build company cultures that encourage them to stay, and become leaders of the future.”

Silvia Mensdorff-Pouilly, head of EMEA corporates and international banking at FIS Global highlighted the IWD theme of Embracing Equity, stating that it is highly relevant for the financial and fintech industries, particularly at a senior level.

“The need for better representation is not only fair, it is directly related to business success,” said Mensdorff-Pouilly. “If industries like finance and fintech are to stay central to a changing world, and to best serve customers, they must represent, understand and deliver for all of them. It’s hard to serve customers if you don’t understand them. It’s also hard for diverse groups in business to drive innovation if their talents are not properly supported.”

She continued that in 2021, just a third of senior management positions in the finance industry were held by women. In 2022, businesses committed to increasing that number to 40%, and the majority of firms are on track to reach that target. But whilst progress has been made, there is more work to be done to ensure greater representation of women and other diverse groups in all financial roles.

“Leading financial organisations are at the centre of this change, and in 2023, more of them must back up fine words with fearless action.” Mensdorff-Pouilly’s hope is that for IWD 2024, we will see even more progress to achieving equity in an industry that must innovate for society.

Are employers providing enough maternity support for women?

Recent research from Nucleus Commercial Finance (NCF) found that just one third of respondent’s employers offer enhanced maternity leave benefits or flexible arrangements for working mums. What’s more, is that one quarter of female employees work in a company that doesn’t offer any gender-related benefits.

Chirag Shah, CEO and founder of Nucleus Commercial Finance, commented: “While we’re seeing positive improvements when it comes to women in business, there is still major work to be done in order to achieve total equality.

The challenges around maternity leave and flexible working arrangements are foundational to improving the experience of females across the fintech space. If women feel unsupported or unable to discuss the challenges around balancing maternity leave and childcare with their employers, it is likely that the industry will see permanent departures. The issue is exacerbated by a lack of female representation in executive levels, making it difficult to picture the idea of rising through the ranks particularly when weighing up the possibility of maternity leave.  

The fact that discussions around representation, inclusion and gender equity are being discussed more openly in the workplace is a positive trend, and this dialogue should remain a priority across financial services. However, Linh C. Ho, chief growth officer at Zelros stated that “companies have now put theory into action […] Concrete actions need to be taken to promote gender diversity and inclusivity. This may involve actions such as pay transparency, flexible working arrangements, and leadership development programs, as well as fostering a culture of belonging throughout the organisation that is sustainable for keeping talented women.”

Jumio’s CFO, Susan Walker, also weighed in on the topic, stating that she believes  childcare is a huge issue for working women. “As a manager, be flexible around ‘working hours’ — allow team members to work from home, complete tasks in the evening so they can attend their child's sports event. If you could tell my 16-year-old self one thing about life as a woman in tech, I’d tell her to have confidence! You are just as smart as everyone else in the room, so be confident and speak up, whether it's to ask a question or make a point.”

Does female-led fintech have equal access to funding?

Bringing some illustrative statistics to the conversation for IWD 2023, Dealroom analysed data for the Department for Science, Innovation and Technology, which found that UK tech startups and scaleups with at least one woman co-founder raised £3.6 billion in venture capital funding in 2022 (up from £2.9 billion in 2021). Eight companies with women founders and co-founders raised over $100 million in 2022.

Despite progress, Dealroom’s data also showed that female founders are represented in only 9% of UK unicorns - demonstrating the extent of the gender gap in the venture-backed tech sector.

Nucleus Commercial Finance’s Shah added that “recent reports have shown female entrepreneurs in the UK launch their businesses with 53% less capital than men, and a lack of access to funding is one of the biggest challenges they face when deciding to start their own company, as opposed to men.”

Because of this disparity, Shah stated that the lending industry must play its part. Nucleus Commercial Finance is introducing a discount on loans to companies with a female director, to encourage businesses with female leaders to maximise their potential and ensure they are doing so with the appropriate financial backing in place. “It’s by no means a silver bullet, but hopefully a step in the right direction,” Shah added. 

Beyond the differences in funding opportunity, the gender pay gap remains an insidious problem for women, causing a huge impact on a female’s finances through the course of her lifetime. Alastair Douglas, CEO of TotallyMoney explained: “At its current level of 14.9%, women are working the equivalent of two months free — each year. Change starts from the top, with firms ensuring that women are represented at all levels of business, and that processes are debiased. This begins during hiring, through to performance assessments, and reporting on progress.”

Disparity in access to financial products and services remains a problem for women

Equal access to financial products and services has long been a challenge for the female gender. As reported by Finextra's Niamh Curran, while technology has the potential to increase financial access, it is common knowledge that credit scoring AI services are likely to discriminate against women. It is not only essential that we strive to improve accessibility to existing financial services to women, but that we ensure that future tools and technologies reinforce greater access and don’t undermine women’s ability to capitalise on financial service offerings equally.

Alastair Douglas, CEO of TotallyMoney commented on the current state of the “flawed” credit system, stating that “half the population shouldn’t be struggling, and women shouldn’t be disproportionately disadvantaged. The financial services industry should be striving for equity, but in reality it’s struggling with transparency, and trust. 

Some telling research from TotallyMoney has found that:

• On average, women have a 10 point lower credit score than men, a gap which exists throughout their entire lifetime
• Lenders are 16% less likely to provide women with pre-approved credit card offers, and women find themselves eligible for 22% fewer cards
• Women are given a 31% lower credit limit across all card accounts
• Women receive higher credit card APRs than men (0.8 percentage points)

Pointing to new technologies and initiatives, Douglas furthered that “giving people the tools they need, and putting them in control of their own data is key. Open Banking can help, and customers can leverage its power to better understand, and manage their own finances. It also provides lenders a more accurate, live view of somebody’s affordability. 

Danielle Treharne, managing director EMEA at WorldRemit, and member of the Financial Inclusion Commission, said that the “fantastic” research by TotallyMoney further serves to emphasise the financial inclusion gap affecting 11 million women.

“But this goes beyond the gender pay gap, and additional structural problems continue to exist in 21st century Britain. Interrupted work patterns, unaffordable childcare costs, and low levels of engagement with financial products mean women are left behind. The Financial Inclusion Commission is calling for the introduction of a Government-led national financial inclusion strategy and a ‘must have regard’ to financial inclusion for the FCA. These will help to streamline numerous initiatives and ensure Government and regulator accountability on tackling financial exclusion affecting various groups, including women,” Treharne explained.

On findings from the FCA’s 2022 Financial Lives Survey, were women were found to be more likely to have low financial resilience or be in financial difficulty. In fact, 28% of women surveyed had low financial resilience, compared to a whole population average of 24%. “It is shocking that in 2023, such statistics exist, but this is a story told time and again across credit, pensions, and savings.”

In agreement with the findings on credit scoring inequality, Kim Minor, senior vice president global marketing at Provenir said that across traditional financial services, women are often underserved and unjustly scored when it comes to credit and lending products. For example, women seeking mortgages are charged much higher rates and denied more frequently, despite statistically being more likely to repay their loans than men.

Echoing Douglas’ comments around technology, Minor argued that fintechs have a role to play in leveraging their cutting-edge technology to be a catalyst for change, developing solutions that place women on an even playing field as their male counterparts.

As such, Provenir helps financial service providers “utilise alternative data to supplement traditional credit scoring, ensuring the inclusion of all women who lack an adequate credit history. AI and Machine Learning have the ability to integrate that data more easily, deploy advanced models to manage bias and improve risk decisioning accuracy, helping to build a more equitable financial services landscape. However, this is just one piece of a very large puzzle. – I encourage all organisations this International Women’s Day to consider how they’re helping to build a more inclusive world.”

Is there still a female fintech talent gap in 2023?

2022 research from recruitment firm Robert Walters found that less that a quarter of the global fintech talent is female. The research states that the percentage of fintech roles held by women falls behind those held by women in banking and technology.

Anna Brailsford, CEO of Code First Girls stated that in order to ensure the UK tech industry is as strong as possible, “we need to draw on the widest possible range of voices and insights. But the industry is facing a major skills gap, and as things stand, there will be only one qualified woman for every 115 roles by 2025.”

Many women face significant barriers to entering the industry, starting at school and continuing throughout their lives.

In order to support and encourage women to enter the tech industry Brailsford commented that companies should not only promote free training and other initiatives, “they should also ensure advertisements highlight the benefits of a technology career, including rapid career progression, flexibility, interesting work, and listed salaries. Support should also be put in place focused specifically on key transitional moments of a woman’s career, such as returning to work after maternity leave, or dealing with menopause.”

“And crucially, tech employers must be open to the potential that women could bring from other professions and backgrounds, who might be coming to tech later in life. Varied and diverse experiences and skills will only make the entire tech industry stronger, bringing huge opportunities to businesses as well as the individuals themselves.”

More on IWD and making the UK a better place for women in fintech…

The Rt Hon Tech Secretary, Michelle Donelan said: "I want the UK to be the best place for anyone - male or female - to start and grow a tech business, so it's brilliant to see female founded firms attracting more investment than ever before. Together with industry leaders my brand new department will work hard to create the right environment for inspirational women to forge careers in the UK's thriving tech industry and help it reach new heights."

Yoram Wijngaarde, founder of Dealroom, stated: “Attention has been repeatedly drawn to the dearth of funding for female-founded businesses so it is good to see a significant number of UK companies raising mega rounds and the progress that has been made by female-founded companies across the board. However, there is still a huge gap to be made up since the vast majority of startups and funding continues to go to all-male teams. By focusing on this metric and on upskilling talent across the digital tech sector we should be able to make a difference.”

Yvonne Bajela, partner at LocalGlobe: “Women founders are integral to the UK tech ecosystem but we need more of them to create and build companies that can challenge the status quo and make the world better.”

Kate Hofman, founder and chief brand officer at GrowUp Farms, said: “The progress made so far in supporting women entrepreneurs and founders is great to see but there is more to do to make it a level playing field. We need more diversity in business leadership if we’re going to make UK food and farming resilient and self-sustaining. We need to better support our women entrepreneurs who are building impact businesses to solve pressing challenges facing society, from the environment to the economy and people.”