There has been mounting focus on the importance of diversity in the financial services sector recently. We have covered these developments on our blog, including in our articles ‘measuring inclusion in the financial services sector‘, and the ‘new FCA Policy Statement‘, both published earlier this year.
The focus is now broadening to include diversity within the FinTech sector. This month, EY and Innovate Finance have collaborated to publish a report on gender diversity within the sector (the Report) and what can be done to support women working in FinTech.
The FinTech sector
Given the prominence of the FinTech industry in the UK, and the great prospects this offers to the UK economy more widely, the UK Treasury has shown a keen interest in understanding what the future of the FinTech industry might look like. As such, it commissioned an independent study, resulting in the Khalifa Review. This review highlighted lack of available talent and diversity as the main risks to the prospects of FinTech’s evolution. It suggested that better engagement with skilled workers at all levels and of all genders, races and ethnicities will support the continued growth and development of the industry.
Following the publication of the Khalifa Review, EY and Innovate Finance jointly published the Report following a survey that was conducted between July and September 2021. As part of this, 240 industry participants were surveyed, six focus groups were created and 15 senior executives participated in a roundtable to capture a wide and representative demographic of respondents.
The Report highlights a number of disparities between men and women working in the FinTech sector. For example, it demonstrates that companies led by a female leader have reduced access to equity and debt funding. The Report also identified that female employees are less inclined to negotiate their salary and bonus, which could lead or contribute to a gender pay gap in the industry.
What can employers do to change this?
As one of the fastest growing sectors in the UK, the importance of supporting women in the FinTech workspace is coming under greater scrutiny. The current ratio of men to women in the sector is reported to be 2:1. In a sector where lack of talent and diversity have been identified as the biggest risks to development and growth, it is important for FinTech companies to introduce new ways of working to support women to progress their careers in the sector. Ultimately, conducting business in a way that is conscious of diversity and gender at work can only assist companies by providing a wider pool of talent from which to choose.
The Report goes on to make a number of recommendations, focusing on four key areas.
- Supporting female founders as they grow their business
The Report explains that female leaders face more challenges when starting and growing their businesses as they have access to fewer resources than their male counterparts. Removing these blocks to resources for female leaders presents an opportunity to re-balance the foundations from which all FinTech businesses can grow, making the sector more dynamic and robust.
To address some of these challenges, the Report flags that the support of male champions, such as investors and industry leaders, can be key in demonstrating the value that women are bringing to the sector. This confidence in its female staff, and support from the male contingent, has the potential to filter positively through an organisation as employees are encouraged by the example set by their leaders.
2. Create more inclusive working environments
The Report stresses the importance of fostering a more inclusive working environment. This is an issue that is not limited to the FinTech sector as it is often a reason for employees deciding to leave their role in any industry. However, due to the speed at which the FinTech sector has grown, existing working environments may no longer be suitable for all those working within it. Employers can look to change the nature of their work practices by refreshing HR policies and procedures (along with talent management and reward processes), ensuring appropriate support is in place for all part and full-time workers, and making sure flexible working arrangements are in place to respond to a more diverse demographic of workers.
3. More robust and targeted recruitment and career support programmes
Employers in the FinTech sector should also consider evaluating their recruitment practices to address gender and diversity in the workplace at the start of their employees’ careers. By implementing changes at the recruitment stage, and engaging with students who are considering a career in FinTech, it is possible to embed such changes further as the employees advance their careers. It may also influence the attitudes and behaviours of existing employees. For example, companies could introduce a mentoring programme between existing employees and students or new joiners to allow employees to share their thoughts, and create a more open and collaborative working environment.
4. A data-driven business case for change
The Report encourages employers to collect and utilise diversity data. Diversity data allows employers to gather information around salary and benefits as well as working conditions, in order to identify any differences that exist. Diversity data has proven to be a valuable resource in other industries where it is being used to gain a real insight into the workplace and how certain conditions can be improved for the benefit of the business and its staff. The process of collecting the data can also provide employees with an anonymous opportunity to raise any concerns they may have about aspects of their role, or the way business operates, where they may not otherwise feel they have the opportunity to do so.
While the Report recognises that some progress has already been made, it concludes that there is a positive opportunity for more to be done to improve gender equality in the sector. As well as adopting the recommendations set out in the Report, employers within the sector can offer training sessions and seminars to all workers at all levels to educate them on the benefits of working towards gender equality and the benefits this could encourage. Such sessions may not only help raise awareness of the importance of gender equality, but could also create a forum for discussion between individuals, opening up the conversation beyond its current limits. This may encourage workers to consider their own attitudes and behaviours which might lead to positive changes at work.
The key message is that, in an industry that is fluid and rapidly evolving, it is important for employers to adapt to ensure that top talent is recruited, retained, rewarded and supported. Without this, any progress toward gender equality will lose momentum and the UK’s prominent position as a leader in the FinTech sector may lose its stellar reputation, along with a strong pool of current and future talent.