By Louisa Murray on Tuesday 1 December 2020
According to industry body Innovate Finance, only 17 per cent of the UK’s fintech companies have female founders and women account for less than 30 per cent of the total workforce.
Diversity has taken another big hit amidst COVID-19. New global data from UN Women suggests that the pandemic could wipe out 25 years of increasing gender equality, with women called back into domestic chores and family care as schools close their gates. These findings follow research by recruitment firm Heidrick & Struggles, which revealed that 95% of CEO hires in the UK in 2020 have been male, an increase from 91.8 per cent in 2018. How depressing that people are reverting to the perceived safety blanket of older males once more.
This is extremely frustrating and mirrors a real issue in the UK fintech space, which is often held up as a beacon of progress. Whilst fintechs are undoubtedly doing a great job of transforming financial services in terms of technology and access, the sector’s progress is much slower when it comes to addressing gender inequality.
According to industry body Innovate Finance, only 17 per cent of the UK’s fintech companies have female founders and women account for less than 30 per cent of the total workforce. Questions need to be asked, especially of venture capitalists - women receive just 3 per cent of VC funding. Sadly, this is representative of financial services as a whole, with women making up just 17 per cent of FCA-approved individuals last year.
So where do we go from here? Making meaningful and sustainable change takes awareness, commitment and action at every level. It has to start within schools and the childhood home. We now have techie Barbie dolls so let’s follow that up with a Disney princess who is a finance whizz. Women are still all too rare in the STEM subjects, skills which are highly valued and sought after in the financial services industry.
I’m a great proponent of ensuring a diverse team which takes full advantage of women, including the many talented females who want to pivot in their career or re-join the workforce after a period outside of it, for whatever reason.
We all know that companies benefit enormously from women’s much-needed experience, calm and enthusiasm. Interestingly, researchers from S&P Global found that companies with gender diversity in senior leadership positions perform better on the stock market. I think the fintech sector, in particular, can benefit from the high number of ex-City women who are looking to re-enter the workforce. We fly through the hours expected by fintech companies – we’re used to them!
Fintech founders and boards need to get past the tired excuse that they simply don’t get many applications from women. They need to consider whether their company is attractive to female applicants and if not, why not. I was talking recently with Justine Cooper from Brook Graham, the Diversity & Inclusion Consultancy from Pinsent Masons, who believes that truly inclusive leaders seek out and value differences, and foster a sense of connection and belonging.
“These skills of empathy, humanity and compassion have been fundamental to support people through the myriad challenges we’ve all been facing this year,” she said. “Inclusive leaders recognise there is no one size fits all, and that there may be layers of challenges that women face in returning to, and progressing with, their careers.”
Cooper also pointed out there’s been a number of accelerated socio-economic shifts during 2020. One is a dramatic increase in working from home under lockdown, which has proven that remote working can actually be more efficient. For many years, a widespread reluctance (including from myself) to embrace a more flexible working culture has been one of the major obstacles to gender equity. Hopefully, the dial has now moved on this one.
Ultimately, there’s no quick fix to rectify the historical underrepresentation of women in high-powered roles. But lessons learnt during the pandemic must push us further towards a more inclusive and empowered work culture. To ignore these lessons would be unforgivable.
Louisa Murray is chief operating officer of Railsbank. The views and opinions expressed are not necessarily those of AltFi.