Online banking businessman using smartphone with credit card Fintech and Blockchain concept

Article by Yasmin Johal, Associate, CMS

The FinTech industry creates and delivers highly innovative and disruptive technologies that seek to alter the landscape of various traditional financial sectors, such as payment services, trading and lending platforms.

FinTech is by nature forward facing, employing the use of pioneering technologies and software-based solutions to provide unique and accessible solutions to all. Whilst technology relies on empirical and data driven science, it is not necessarily the case that it therefore produces products that are free of human bias and error. In fact, human biases are coded into technology every day. This can occur not through deliberate and conscious decision-making, but most commonly through a lack of representation of society, for example women. To produce products that work for all, and represent gender differences, it is imperative that women are included in the creative process across all levels, from consumer data collection to senior management.

It has also been commonly acknowledged that increased diversity in business settings results in better financial outcomes and productivity. It is for this reason that McKinsey labelled gender inequality as a “critical economic challenge”. Companies that do not invest in the development and promotion of female talent simply lose out. A range of perspectives and life experiences is crucial in capturing wide and diverse consumer markets – something which all FinTech companies should aspire to do. Firms with diverse and inclusive boards and management teams make better and more informed decisions, drive innovative solutions, and outperform their competitors.

A more obvious point as to why we need increased representation of women in FinTech, is that women make up half of the world’s population and are therefore a huge consumer market. More than that, women are typically more likely than men to be responsible for household financial management and control of dispensable income. This provides only a glimpse into the potential of the economic power of women. Despite this, women are less likely than men to use FinTech products. The inclusion of women in FinTech across all levels therefore could go a long way in increasing the marketability and appeal of FinTech products.

Some of the most significant barriers to increasing female representation in FinTech include:

  • balancing childcare and family demands with work;
  • accessing funding – at every stage, female-led businesses receive less funding than male-led businesses;
  • access to professional networks in the industry; and
  • a lack of self-belief – 1 in 6 women believe they lack the necessary skills and knowledge.

Combatting these barriers to entry demands a multifaceted approach, one element of which is to encourage women and girls into tech and STEM fields and to promote the development of coding and data skills. Despite slight increases over the last few years, the number of women in STEM remains pitifully low. Whilst it is important to highlight that a STEM background is not necessary to enter FinTech, guiding women into STEM careers is a vital part of the journey.

Innovation combined with a consumer-centric mindset is also crucial to increasing female engagement with FinTech. It is important for FinTech firms to really make an effort to analyse gender-disaggregated data, speak to women, and identify ways in which they can design solutions that not only disrupt traditional markets, but that are also marketable and desirable to women. Creating and building products that advance the way in which women contribute to and access financial services is imperative to improving the gender disparity in FinTech.

Finally, the importance of firm culture and inclusivity cannot be overstated. Diversity and inclusion should be on every FinTech firm’s agenda and be afforded priority. Whilst many FinTech firms may be in relatively infant stages compared to the more traditional financial services companies, it is crucial for FinTech firms to seek to pro-actively lead the change from the outset through inclusive internal policies and practices.  This can be achieved through the adoption of hybrid and flexible working, zero tolerance of sexual harassment and sexism, and inclusive recruitment practices. Role models, education, networking and showcasing talent are just a few things that can help encourage more women in tech. We need to amplify the profiles of successful women to encourage the next generation of women in FinTech.

About the author

Yasmin JohalYasmin is a Lawyer at CMS and is one of the few females specialising in the regulatory aspects of FinTech. She provides expert advice to all players within the FinTech ecosystem, and helps shape trends and developments in the FinTech industry internationally. She has worked across the UK and US financial markets, helping deploy technological innovation, and frequently authors industry leading thought leadership on areas of financial regulation, FinTech and innovation. Yasmin is a Tech speaker and an advocate for increasing Female and BAME representation in Tech, and speaks at a variety of events and on podcasts, on a range of topics from FinTech, D&I and career development. Yasmin was a #TechWomen100 2020 Award Winner; recognised for her work in Fintech and has also been recognised as a Standout 35 winner in the Women in Fintech Powerlist 2020 with Innovate Finance.