Innovate Finance recently conducted a survey to find out how women felt about working in the fintech sector. Some 48 per cent of respondents believed fintech was becoming a more attractive space for female talent and 35 per cent felt that female bosses were helpful in achieving their career goals.
While there are some positive signs, there is still a major gender gap at the leadership level. Within the Innovate Finance startup community, only 8 per cent are founded or headed up by women. If you look at the membership base, there are only 21 female founders out of a total of 260 fintech member companies.
One of the reasons for this is the skills gap. Girls often outpace boys at school, but few are pursuing STEM – science, technology, engineering and maths – studies that can land them top jobs in financial technology. Though we are living in a more technically driven digital economy, there are fewer women getting tech skills today than ever before.
In the UK, only 10 per cent of practising engineers are women – lower than in any other European country. For women who do have the skills, many can struggle to navigate their career and family obligations, and stay in the job that they want.
A contributing factor to the drop rate is how a woman’s career progression changes depending on the stage of her life. A woman fresh out of university and just starting her career might be more optimistic about her prospects than someone who has been in the workforce for a while and trying to balance work and family life.
For many, the result is often a lack of promotion, big career progression, pay gaps and women deployed in jobs below their abilities.
This recurring problem has been captured in the recently published book The Paula Principle: Why Women Work Below their Level of Competence by Tom Schuller. He argues that women outperform the opposite sex at the start of their careers. By the time they hit their forties, they fall behind in terms of their jobs and salaries. The gender pay gap is big across all business verticals, but the financial services sector stands out: it offers the highest-paid careers, but has the widest gender pay gap. Women earn 60 pence for every pound earned by a man.
Mr Schuller says pay and career blocks have a lot to do with the motherhood penalty, with women still struggling to find a job that offers meaningful flexible time and also provides a path to promotion.
What can be done? Firstly, STEM skills must be prioritised in primary and secondary school curriculums, and available to all students with an emphasis on coding and software skills. Secondly, we need more mentoring programmes to encourage women to become entrepreneurs and this should start at secondary school to inspire the next generation of leaders. Thirdly, we must legislate flexible working practises better to help parents so women and men can balance their work and family life.
Ultimately we must back female talent with investment. Women often see opportunities and risks very differently from men, and their perspective can provide a different view on delivery and investment to help balance decisions.
We’re seeing some positive changes. Coding schools are attracting more women and returnship programmes, aimed at luring women back into the workforce, are also gaining popularity.
Government is doing its part with the launch of HM Treasury’s Women of Finance Charter, where signatories agree to a series of recommendations that aim to promote women to leadership positions in financial services.
Fintech firms are in a great position to make things happen. Many are already building a workforce that reflects the diversity of the society it serves.
Together with their help and support from investors, education and government, financial services can become one of the first sectors to help solve the gender gap, and serve as an example for other businesses to follow.