UK organizations need to do more as leading Fintech hub to achieve gender parity

While progress is being made for women in fintech in the UK, more needs to be done to achieve gender equality. The latest report of EY and Innovative finance Changing the face of UK FinTech: from glass ceilings to open doors: championing equality and career progression for women in FinTech further supports this.

The research consisted of interviews with the 120 nominees from the Innovate Finance Women in FinTech Powerlist, and found that barriers to success in the sector still exist. Top female executives in UK fintech cite a lack of industry recognition for their contributions (27 per cent) and opaque promotion processes (25 per cent) as particular challenges to career progression.

The research also looked at solutions to these challenges. Addressing the gender pay gap emerged as the best way (17 percent of respondents identified this as their first choice) to improve gender diversity, equality and inclusion (DEI).

Improved reporting is considered crucial to reducing the gender pay gap

according to Office for National Statistics, the UK pay gap – the difference between men’s and women’s median hourly pay – stands at 14.9 per cent for all types of employees. Not just in the financial sector, but across all industries. However, this gap widens significantly in the technology (27 per cent) and financial services (26 per cent) sectors. In the fintech sector, which experiences limited public reporting, EY analysis estimates that the gender pay gap is 22 percent.

The views across the research identified that the main contributing factors to the gender pay gap in the UK fintech industry include the low levels of transparency around pay. This is in addition to low female representation in higher paid roles.

To address this, fintech firms – both large and small – should commit to consistent salary bands to ensure equality in employment. They must look to improve payroll transparency by using technology-enabled solutions and engaging payroll and accounting software companies to automate processes. In addition, increased visibility of female management in fintech is expected to contribute positively to progress. This must happen both within organizations and throughout the industry.

Lead by example

Anita Kimberpartner, fintech policy and ecosystem leader at EY, comments: “Our second annual Women in FinTech the report reveals some amazing examples of incredible women leading and holding senior positions in the sector. However, gender equality is an ongoing journey and despite some focus there is still a long way to go.

“For fintechs universally, a clear priority is to understand pay inequality and work to solve it. We believe more comprehensive and transparent reporting will be a critical part of the solution. Getting the right compensation is important at all levels. Especially for middle and junior workers who represents the future of the industry.

“We believe fairer pay will help fintechs improve access to female talent – compete, attract and develop the right skill sets to help their businesses succeed, and we hope the recommendations outlined in this report will help create material change.”

Women currently hold only around 10 percent of fintech board seats

EY European Financial Services Boardroom Monitor shows that across UK financial services, the gender distribution among board members is currently 39 per cent women, 61 per cent men. However, according to Find indexable‘s Report on diversity for growth 2021, women have only 11 percent of all fintech board seats. They also represent less than 20 percent of the company’s managers. Furthermore, they represent only 40 percent of fintechs have appointed a woman to their boards.

Recommendations to drive progress

EY and Innovate Finance have outlined the following recommendations to improve gender equality in the UK fintech sector:

• Create a more transparent culture around pay and report openly on the pay differences between the sexes
• Ensure that women are adequately informed about the value of shareholdings, share options and other available reward and compensation options
• Expand upskilling opportunities for women interested in technology-oriented careers, especially those re-entering the workforce
• Engage recruiters to prioritize diversity
• Make management responsible for equality goals
• Create a more diverse network of advisors, especially for female founders and senior executives
• Provide leadership development for promising young female workers and offer training to more senior managers

Ensuring a more diverse future

Chris Woolard, head of UK fintech at EY and chairman of EY’s global regulatory network, comments: “The fintech sector is an increasingly important part of the global financial services ecosystem. The UK is playing a leading and exemplary role.

“But the fact that female representation, especially at board level, remains so low is not sustainable for an industry in growth mode. Now is the time to build on early progress with further regulation to contribute to a significant narrowing of the gender pay gap. Change must be accelerated and an environment fostered that encourages greater diversity of thought. Not just because it’s the right thing to do. But because it will ensure that the UK fintech sector is in the best possible position to continue to lead globally.”

Janine Hirt, CEO of Innovate Finance, adds: “The UK has built a world-leading fintech ecosystem that sets the global standard for innovation in financial services. We are pioneers when it comes to developing the industry and pushing forward with ideas and solutions. Ideas that transform the financial possibilities for both consumers and businesses.

“As the premier fintech hub, we in the UK need to do a better job of promoting greater gender equality in the sector. We must reduce the pay gap between the sexes. If we are to build a sustainable, future-oriented fintech sector, building on the achievements and progress made to date, it is important that we tackle the diversity issue now. It starts with progressive regulation that can move the dial and deliver tangible change.”

Industry response

Commenting on the findings, Sheila Flavell CBE, Operations Manager i FDM Group said: “The fintech industry makes a huge contribution to the UK economy, creating jobs and driving innovation. With such a bright future ahead, tackling the gender pay gap and improving access to career opportunities should be a top priority for business leaders.

“The key to solving this problem is expanding career and training programs. This is in addition to working harder to retain female talent. By building a stronger, more diverse workforce, the fintech industry will be better positioned to represent customers it serves in the long run.”

Meanwhile, Joanna Coreyleader of people for Include Company, said: “The fintech industry has evolved significantly and needs to be open and accessible to all. Ensuring gender equality requires work from all parties. With the support of managers, personnel are especially important when it comes to implementing progressive workplace policies. For example, flexible working measures, which benefit everyone, including parents and women returning to work.

“Having that support can empower women in their life and well-being choices. This as well as their work choices, enabling them to achieve their professional goals while maintaining a good work-life balance. There is so much untapped potential , and if we are to continuously see positive changes, flexibility is the key.

“Women themselves should also be proactive in making the fintech and technology sector work for them and their lives. Technology is so broad and far-reaching now compared to 25 years ago. It should be an important factor behind not only the day-to-day business activity, but also to help women access and excel in the industry,” she added.