Gender diversity has become a hot topic of debate across boardrooms, perhaps nowhere more so than in financial services. Traditionally male-dominated, the industry is coming under growing regulatory scrutiny to close the gender gap.
Industry-wide initiatives such as the Women in Finance Charter – a Treasury-led scheme to which more than 400 firms have signed up – coupled with the introduction of gender pay gap reporting, have had a positive impact. A global study by the Oliver Wyman consultancy before the pandemic found that the sector was making the fastest progress on increasing the number of women in senior leadership roles since the start of its research in 2003.
The payments sector, which has grown considerably over the past decade thanks to increasing innovation and a spike in demand for digitalisation, has fared particularly well on female representation. A report by McKinsey found that in North America, almost 40% of C-suite positions in the sector are held by women, significantly higher than the industry average. In addition, women of colour make up 9% of the C suite in payments – the highest representation among all financial services sectors.
Sophie Flynn, who co-founded UK-based payments firm Transact365 in 2017, has started to see an improvement in the gender balance in recent years. “I’m meeting more and more female counterparts in the sector and there’s a steadily growing number of women looking for careers in payments, which is great and shows that we’re slowly making progress.”
In the UK, improvements have been driven by the Financial Conduct Authority’s commitment to accelerating change in financial services. There is growing recognition here that gender diversity can improve culture and governance, boost innovation and lead to more positive outcomes in risk management. Yet, in many ways, the conversation about gender parity remains in its infancy.
“When we look at how things have moved on in the past couple of years, it feels that we’ve started to see a shift in the industry, but there’s definitely a way to go,” says Louise Buckley, COO at the Payment Systems Regulator (PSR).
In 2017, the PSR became a signatory of the government’s Women in Finance charter. Buckley says that organisations can “demonstrate their commitment to doing their part by getting involved in initiatives like this, as well as by building and, importantly, sustaining diverse and inclusive workplaces”.
Flynn echoes this sentiment. “There is still a long way to go. The fintech industry as a whole is still only made up of 30% women,” she notes. “What is worse is that only 1.5% of global fintech businesses are founded solely by women. That needs to change.”
While imposing quotas on businesses is undoubtedly helping to level the playing field, women in the sector believe that measures must go beyond regulatory requirements and box-ticking initiatives. This includes greater recognition of the challenges facing female employees.
Lorraine Deschamps is EMEA head of corporate citizenship at Fiserv, a financial services consultancy based in Wisconsin. She points out that someone’s commitment to their career in a male-dominated environment – such as how well that person can balance their work and home responsibilities – is often judged by male standards.
“Not all women have the means to get round some of these challenges. Many will limit their goals because they think they won’t be successful or they won’t be supported,” Deschamps explains. “The ever-growing momentum in diversity, equity and inclusion is making people more conscious of this thinking, but bias can still affect people-focused decision-making. It takes real commitment by organisations to be intentionally inclusive and to ensure that such commitment extends from the top to lower managerial levels.”
Recent research by Innovate Finance has found that women in fintech still have less access than men to equity and debt funding. In 2021, only 10% of venture capital invested in the sector went to female-led firms in the UK – a figure that has remained stubbornly flat for four years.
“Female founders are unrepresented in venture capital funding. That might hinder women’s business initiatives,” says Denise Johansson, co-founder and co-CEO of Enfuce, a global payment provider based in Helsinki. “Hopefully, as the venture capital world has a shift in mindset and gains gender diversity, the gap in the distribution of venture capital funds can be bridged.”
Arguably one of the greatest barriers that women face is a lack of confidence combined with the persistent belief that finance is a male preserve. Education has a key role to play in shifting this and encouraging more women to enter the sector.
Enfuce’s other co-founder and co-CEO, Monika Liikamaa, believes that young women need to see more female leaders in financial services.
“On a broader level, it’s important to deliver diversity of all kinds. We as female founders in finance want to show that there are no limitations,” she says.
As gender diversity improves, it creates an upward spiral of inclusion in the industry and wider society, Liikamaa adds. “Through diversity of thinking, companies can create new services that solve new problems across the industry and take into account the needs of varied user groups, resulting in more inclusive services.”
Deschamps believes that positive change starts at school. “We need to be reaching out to young female talent in the education system or to those who haven’t yet entered the job market to build awareness of the opportunities and shape their aspirations,” she says. “For those women in an organisation, we have to develop platforms that support their growth and educate everyone on why that matters.”
Indeed, studies have shown that a ‘network gap’ can disproportionately affect women. While men have enjoyed decades of networking, with many benefiting from the so-called old boys’ club, the rise of women in senior positions has been a relatively new phenomenon. A study by LinkedIn has found that women are 27% less likely than men to have a strong network.
“We need to make sure we’re fostering a working culture that allows women to thrive and make their voices heard,” Flynn says. “I know how important it is that their views are listened to.”
The power of female networks is similarly important to Johansson, who says the success of Enfuce has depended on help from others. “As a female founder, I’ve come to realise that there is a strong network of people ready to support you if you just take every opportunity to build that network and ask for help.”
She continues: “We had an idea and we knew how to realise it, but we lacked capital and deep legal competence, so we reached out to people we knew could help us. Not one of them turned down the chance to help. There is power in networks.”