Women have made great strides in the financial sector in recent years. However, they are still woefully underrepresented in leadership positions within fintech companies. This is a problem not just for women but for the industry as a whole.
There is growing evidence that companies with gender-diverse leadership teams perform better than those without. So, why are there still so few women in fintech leadership positions?
Several factors include the lack of women in the pipeline, the challenges of breaking into a male-dominated industry, and the pervasive gender bias in the tech industry.
An IMF working paper published last July reported less than 10 percent of women are leaders – as founders or executive board members – in the fintech industry across 97 countries it studied. That is lower than in the traditional banking industry, where women represented less than 25 percent of board seats in banks and bank supervision agencies.
This year’s Fintech Top 100 Leaders named Cristina Junquiera, co-founder of the Brazilian neobank and the largest fintech bank in Latin America, as the most influential person in the industry.
Last year’s ranking also saw a woman top the list – Citi CEO Jane Fraser, the company’s first female CEO since its establishment over 200 years ago. However, only 29 women made it into the list this year compared to 36 women in 2021.
Women in the APAC fintech industry
Of the 29, four are based in Asia-Pacific: Fintech Association of Hong Kong co-chair Michelle Chan (#67); regtech Silent Eight co-founder and COO Julia Markiewicz in Singapore (#81); investment and trading platform for digital securities and security tokens InvestaX co-founder and general counsel Alice Chen in Singapore (#85); and digital asset management firm VegaX Holdings co-founder and COO Natasha Bangsopaul in South Korea (#99).
The IMF paper observed that large gender gaps persist, though the number of women in leadership is improving – mostly in newer firms. It also found that “a 10 percent higher share of women on executive boards is associated with roughly 13 percent higher revenue and funding earned by a firm”.
Large companies, by size and revenue, also tend to have more women executives. The average share of women executives in firms making less than $10 million is 9 percent, while the average is 14 percent for companies making between $10 to 100 million and more than $100 million.
image via Unsplash
Lesser fintech funding for women
However, it’s a different situation with firms founded by women. They tend to receive less funding and make less revenue than companies founded by men.
Women-founded firms are 77 percent less likely to get increased funding, while women founded 14 percent of firms earning less than $10 million. The percentage is even lower at 7 per cent among firms making more than $100 million.
The IMF paper also found that women appear to be more financially risk-averse than men, and are hindered by investors’ – who are primarily men – gender bias against them. The bias could occur in, for example, the questions asked by investors.
Questions to male entrepreneurs tend to lean towards gains like hopes and achievements, but they are skewed towards losses, such as security and vigilance concerns, for female entrepreneurs.
Women not on the fintech bandwagon
A May 2022 IMF working paper noted that a survey across 27 countries found only 21 percent of women use fintech products and services compared to 29 percent of men. Gender differences, for example, women value data privacy more than getting cheaper rates, were contributing factors to the gap.
Male-centric design of fintech applications also made them less accessible and attractive to female users. This is where female leadership can make way for a more inclusive fintech and more opportunities for untapped revenue and resources.
Underrepresentation in fintech
Beverley Yeomans
“Women and people of colour continue to be underrepresented in finance, including financial advisories, insurance firms, banks, wealth and asset managers, investment companies, fintech firms, banks, and auditors. This is largely down to traditional industry biases, social norms, and economic disparities,”
said Beverley Yeomans, Chief Operating and Diversity Officer at deVere Group, a leading independent financial advisory firm.
“Diversity and inclusion must form an integral part of a firm’s culture because the business case for it is so strong. It helps improve the ‘bottom line’. If firms are serious about growing their business, they need to address the question of diversity,” she added.
Louise Brett
In a blog post on preparing women for the future of work in fintech, Louise Brett, a partner at Deloitte, wrote about addressing the gender gap in developing talents and removing barriers for female founders:
“The motivations of female founders and employees must also be considered, including within sub-sectors of fintech such as payments. Many founders have a moral dimension of greater purpose in their work, which often drives them more than financial rewards. The sector must adapt to reflect this.”
Featured image credit: Freepik
