The progress made in the gender equality fight is cause for celebration. But the FinTech industry must not be complacent, there is a long way to go.
To mark International Women’s Day, FinTech Global spoke to senior women in the industry to find out their thoughts on the gender gap, the role of financial education and the importance of building a world with more female representation.
According to a report from the United Nations (UN), on average for every dollar a man earns, a woman earns 77 cents. Women also carry out at least 2.5 times more unpaid work (such as household tasks and childcare) than men. At the current rate, it will take 257 years to close the global gender pay gap.
The Global Gender Gap Report 2022 published detailed findings on the Global Gender Gap Index. The index benchmarks the current state and evolution of gender parity across four dimensions: economic participation and opportunity, educational attainment, health and survival, and political empowerment.
Out of 146 countries, not a single one has achieved gender parity and to do so globally at the current rate of progress will take 132 years.
For International Women’s Day last year, FinTech Global spoke to women in the FinTech, RegTech and InsurTech industries to discuss the problems surrounding too few women working in the industry and in leadership positions.
However, the industry has another problem – women are under-represented at the other end: the user base. Whilst statistics on gender gaps in the workforce in FinTech are widely reported, it is somewhat more difficult to find such statistics on the users of FinTech products.
However, the Monetary and Economic Department of the Bank for International Settlements (BIS) published a report with BIS Working Papers exploring the FinTech gender gap. The paper revealed that while 29% of men use FinTech products, only 21% of women do. This gap is present across many countries.
Although exact figures vary, it is also reported that women are less likely to have bank accounts than men (especially in less economically developed countries), are less likely to receive loans, and less likely to invest and accumulate wealth.
As an industry with a reputation of transforming traditional processes, FinTech could go some way to improving this.
Jenny Cohen Derfler, founder and CEO of travel InsurTech Air Doctor, said that tech companies play a “crucial role” in the fight towards gender equality.
“As major employers and creators of technology products and services that shape our daily lives, tech companies have significant influence over the representation and treatment of women in the industry and the impact of technology on gender equity,” she said.
Melanie Hayes, CMO and co-founder of cyber InsurTech KYND, agrees. “I think tech companies have a huge role to play in achieving not only gender equality but also addressing the lack of diversity within its workforce as a whole,” she said. “Particularly as tech more so than many other industries are routinely perceived as a masculine field. This a real shame as tech companies have a lot to offer both genders.”
A lack of representation
The good news is this is something many companies do have on their agenda and are working hard to improve.
A poignant example of this is Denmark-headquartered Female Invest, a financial education and community platform dedicated to empowering women to work towards financial success and close the gender wealth gap. Founded in 2017 by Anna-Sophie Hartvigsen, Camilla Falkenburg and Emma Blitz, the company started out as a book-club-style Facebook page. Today, the trailblazing platform boasts of 35,000 paying members across 95 countries.
According to Hartvigsen, the primary issue behind the industry’s gender gap is that the vast majority of services are not built by women. “We need someone from the target group to truly understand what is needed both in terms of product offering and communication.”
Moreover, there is also a misconception that women are not interested, and this contributes to them being underserved. This is very much a fallacy, and Female Invest’s success speaks volumes.
In 2021 the company raised £3.3m in a funding round backed by prominent investors including Y Combinator. More recently, the platform has been so well-received by members that the company responded to calls that it offer its own investment platform by acquiring trading platform Gaia.
Hartvigsen, Falkenburg and Blitz have learnt, and proven, that women are in fact very interested. “There is a desperate need and frustration among women for these offerings, there just aren’t enough to cater to that,” Hartvigsen said.
The financial gender gap: the invisible and visible barriers
Research shows that women are less likely to invest than men, and this can put them at a financial disadvantage in the long run.
Female Invest’s Hartvigsen said there are both invisible and visible barriers at play here, and the gender disparity begins at a young age. “Research has found that little girls get less pocket money on average than boys, and they are expected to do more chores around the house.
“Then as we enter education, the things we are taught surrounding money are still different on whether you are a girl or a boy. In literature for example, women are often portrayed as being spenders, who like to go shopping and are bad at math. Whereas for men in literature the focus is usually more on building wealth and taking risks.”
It doesn’t stop there. Hartvigsen added that women also receive different financial advice to men later in life, “they are more likely to be advised to save rather than invest,” she said. These invisible barriers at force, coupled with the visible ones such as the lack of products built by women, for women, all accumulate.
Sarah Anderson, chief customer officer at RegTech firm Regnology, agreed that the divide begins early. To address the issue more strategically, she said interventions are required well before women enter the workplace. “Finance and investing are topics which should be covered in schools to help prevent the financial disadvantage that can occur once women start earning,” she said.
Financial education can play a pivotal role. Michele Trogni, CEO and chair at InsurTech Zinnia said that is not necessarily a case of singling women out as needing financial education any more than men do, rather access to education, tools and resources should be accessible to everyone and at an earlier stage in life.
What’s more, financial mastery is a life-long endeavour, Trogni continued, “The tools you need at 25 may not apply to your situation at 40. However, we must do better to ensure women are equipped with strategies that recognise their unique financial reality over their lifetimes. Financial strategies are not necessarily gender neutral. It’s also important to educate women on how life and annuities specifically can equip them to reach their personal financial goals.”
Air Doctor’s Cohen Derfler said that companies themselves can also help to address the gender investment gap. Companies can work to make investment opportunities more accessible to women, including through employer-sponsored retirement plans, and company stock purchase programmes, she said.
At the root of the problem, however, are these invisible barriers and narratives at play that Hartvigsen described. Cohen Derfler is also passionate about dismantling those, “Personally, I believe that as a woman executive I must work to address biases and stereotypes that may discourage women from investing, such as assumptions that women are less interested in finance or less confident in their investment abilities.”
Dispelling myths
The widespread misconception that women are not all that interested in the financial services sector, and that is why they don’t engage as much as men, is damaging. According to Female Invest’s Hartvigsen this idea arises often because often companies do not have the female representation required to serve that group, and therefore this leads to insufficient efforts to target them.
“When most companies set out to target women, it’s just not good enough,” she said. “Firstly, there is often a lack of female talent in those companies which means the people who are making the decisions don’t represent the group they are trying to reach. Secondly, because those companies historically haven’t got enough women, and haven’t prioritised them, there is a lack of trust from women themselves.”
Unfortunately, when these companies’ efforts to capture female customers do not get the response that was hoped for, this only compounds the misconception that women just aren’t as interested.
Female founders and entrepreneurs who do have valuable ideas on how to serve this market then struggle to gain capital. It is a widely known and shocking statistic that women get just 1% of venture capital funding.
Air Doctor’s Cohen Derfler pointed out that this is in spite of the fact studies show that startups led by women CEOs have a higher rate of success.
“A 2019 study by Boston Consulting Group and MassChallenge found that startups founded or co-founded by women generated more revenue per dollar of invested capital than startups founded by men. Specifically, women-led startups generated 78 cents for every dollar invested, while men-led startups generated only 31 cents.”
She remains positive as the outlook continues to improve, “We are definitely seeing more spotlight on these issues, which is a great start, as with every other industry, women will continue to break glass ceilings and overcome challenges.
An industry built by men, for men?
Having too few women in leadership positions, coupled with a relative lack of female-founded companies, it could be argued that the tech industry as it stands is an industry built by men, for men.
Even if offering products and services targeting women is not on a company’s agenda, this does not mean it has no stake in the gender equality fight. Regnology’s Anderson highlighted that Regnology has 40% of women representing its leadership team and across all levels of the company. “As a leadership team we aim to create an environment that is open to challenging bias and support of flexible working and personal needs,” she said.
One element that tech companies should think about, Anderson continued, is why senior women often fall off the radar when they have families, as well as creating an organisation that embraces a variety of skills individuals bring to the table.
Linda Middleditch, Regnology’s CPO noted that there has been an increase in returner programmes across companies. Such initiatives are designed to allow women that have taken a career break to return to work with a structured re-entry programme. “These have been instrumental in encouraging women back to senior roles which might otherwise have seemed like a daunting prospect after many years out looking after children,” she said.
This is not just about appearing inclusive or progressive. Female Invest’s Hartvigsen said that companies who support their female employees also perform better.
Attracting women into leadership roles is one thing, she continued, but retaining them is another. “There are so many easy excuses to make: women don’t want to be leaders they want to be at home.” As a blanket statement, this isn’t true.
So, in practice, how can this be done? According to Remonda Kirketerp-Møller, founder and CEO of RegTech firm Muinmos, the issue should be approached from the bottom up.
Far too often in financial services, Kirketerp-Møller said there is a focus on appointing a woman into a board-level position. “Putting a woman on the board as a box ticking exercise is so ineffective – and usually backfires. A woman, like anyone else, should be appointed at an Executive Level because they have not only demonstrated competence at their job but, importantly, they have the creativity needed to be a true leader, to help scale and build a better business.
“We need to be working with employees in lower-level positions, building them into future leaders, perhaps with a specific leadership pathway for women, to ensure they have the opportunity and skillset to be part of this hierarchy.”
From the opposite end, Regnology’s Anderson said that work can also be done from the top. “Attracting and retaining women in FinTech largely comes down to culture. Starting at the top, leaders should see it as part of their role to help women along their career path by addressing specific barriers they are individually facing, as well as providing support through training and development needs. Separately, openly discussing and addressing bias can break down legacy behaviours and cultures that can hold women back,” she said.
Having more women in leadership positions not only ensures a stronger talent pipeline for women starting their careers, but it also means that financial products are being built with an equitable perspective of customer need, according to Zinnia’s Trogni. “I believe women in leadership positions can help build a more gender-balanced customer base and recognise unique points for empathy and innovation in the product lifecycle.”
Changing the narrative
The importance of culture and perception is not to be underestimated, and many in the industry are in agreement of that.
According to KYND’s Hayes, organisations should make diversity an integral part of their culture and step-up efforts to support and empower women to excel in the workplace, particularly leadership roles.
Perceptions are important, and for the cyber industry, Hayes said it is routinely seen as a masculine field. “This is partly because of how it is portrayed. Masculine imagery (who hasn’t seen hoodie wearing cyber attackers, with a dark threatening binary background behind them?), nearly always male actors playing the techie whiz and cyber products designed to appeal to men.” If we want to attract more women into this industry, we need to change the narrative, she added.
Changing the narrative could have a profound impact, if the industry sees more women in varied roles, then it will be more likely to become the norm.
Denise Seitz, chief technology officer (CTO) at Regnology, said that early in her career there were no examples for her to look to of women in a CTO or similar role. “It’s said often because it is true; we try to identify role models and the more we can see ourselves reflected back, the more achievable growth feels.”
“Having more women and those with different experiences (e.g. part time or flexible work) in leadership positions can smooth the journey for those earlier in their careers. An important element is that women in senior positions create an environment of trust and open their door to mentoring along the way.”
Zinnia’s Trogni agrees, “Companies need to elevate more women into roles that can kickstart the younger female generation’s interest in these jobs… The more visibility of women exceling and enjoying fulfilling careers will organically create opportunities for others to follow suit.”
Companies would do well to create flexible and inclusive cultures, address barriers, and include women in the important conversations. And they should do so every day, not just on International Women’s Day.
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