Women at the top: The fintech industry still falls short

Women have made great strides in the financial sector in recent years. However, they are still woefully underrepresented in management positions within fintech companies. This is a problem not only for women, but for the industry as a whole.

There is growing evidence that companies with gender-diverse management teams perform better than those without. So why are there still so few women in fintech leadership positions?

Several factors include the lack of women in the pipeline, the challenges of breaking into a male-dominated industry, and the pervasive gender bias in the tech industry.

An IMF working paper published last July reported that less than 10 percent of women are leaders – as founders or board members – in the fintech industry in 97 countries it studied. It is lower than in the traditional banking industrywhere women represented less than 25 percent of board seats in banks and banking supervisory agencies.

This year’s Fintech Top 100 leaders named Cristina Junquiera, co-founder of the Brazilian neobank and the largest fintech bank in Latin America, as the most influential person in the industry.

Last year’s ranking also saw a woman top the list – Citi CEO Jane Fraser, the company’s first female CEO since its inception over 200 years ago. However, only 29 women made the list this year compared to 36 women in 2021.

Women in the APAC fintech industry

Of the 29, four are based in the Asia-Pacific: Co-Chair of the Fintech Association of Hong Kong, Michelle Chan (#67); regtech Silent Eight co-founder and COO Julia Markiewicz in Singapore (#81); digital securities investment and trading platform and security token InvestaX co-founder and general counsel Alice Chen in Singapore (#85); and digital asset management firm VegaX Holdings co-founder and COO Natasha Bangsopaul in South Korea (#99).

The IMF paper observed that large gender gaps persist, although the number of women in leadership positions is improving – mostly in newer firms. It also found that “a 10 percent higher proportion of women on the executive board is associated with approximately 13 percent higher revenues and financing earned by a firm”.

Large companies, by size and revenue, also tend to have more female managers. The average percentage of female executives in companies earning less than $10 million is 9 percent, while the average is 14 percent for companies earning between $10 million and $100 million and more than $100 million.

image via Unsplash

Less fintech funding for women

However, it is a different situation with companies founded by women. They tend to receive less funding and earn less than companies founded by men.

Women-owned firms are 77 percent less likely to raise funding, while women founded 14 percent of companies making less than $10 million. The percentage is even lower at 7 percent among firms earning more than $100 million.

The IMF paper also found that women appear to be more financially risk-averse than men, and are hampered by the gender bias of investors – who are primarily men – against them. The bias can arise in, for example, the questions asked by investors.

Questions for male entrepreneurs tend to lean toward gains such as hopes and accomplishments, but they are skewed toward losses, such as safety and vigilance concerns, for female entrepreneurs.

Women not on the fintech bandwagon

A May 2022 IMF working paper noted that a 27-country survey found that only 21 percent of women use fintech products and services compared to 29 percent of men. Gender differencesfor example, women value data protection more than getting cheaper rates were contributing factors to the gap.

The male-centric design of fintech applications also made them less accessible and attractive to female users. This is where female management can make room for a more inclusive fintech and more opportunities for untapped income and resources.

Underrepresentation in fintech

Beverley Yeomans

“Women and people of color remain underrepresented in finance, including financial advisory, insurance companies, banks, wealth and asset managers, investment firms, fintech firms, banks and auditors. This is largely due to traditional industry biases, social norms and economic differences.

said Beverley Yeomans, Chief Operating and Diversity Officer at deVere Group, a leading independent financial advisory firm.

“Diversity and inclusion must form an integral part of a company’s culture because the business case for it is so strong. It helps improve the ‘bottom line’. If companies are serious about growing their business, they need to address the issue of diversity,” added she to.

Louise Brett

In a blog post on preparing women for the future of work in fintech, Louise Brett, a partner at Deloitte, wrote about addressing the gender gap in talent development and removing barriers for female founders:

“The motivations of female entrepreneurs and employees must also be considered, including within sub-sectors of fintech such as payments. Many founders have a moral dimension with a larger purpose in the work, which often drives them more than financial rewards. The sector must adapt to this.”

Featured image credit: Freepik