The UK’s fintech industry is thriving but women don’t appear to be riding this successful wave as they remain underrepresented within the sector.
Elizabeth Pirrie is Chief Operating Officer at AccelerateHer, supporting female founders to grow their businesses. A qualified accountant with 30+ years of experience, Elizabeth took her skills and passion into Economic Development in 2012. Since then she has helped many businesses to start up and grow across several sectors including life sciences, technology and tourism.
Here she shares her thoughts on why the fintech industry should be doing more to support women.
A review of the sector earlier this year by Deloitte showed that UK fintechs were experiencing a phenomenal annualised growth rate of 16 per cent, compared to a 1.3 per cent growth rate across all SMEs. The report predicted this growth was set to continue, forecasting a Gross Value Added (GVA) uplift of up to £3bn for the sector over the next three years with the potential to create a further 50,000 jobs throughout the UK.
While these forecasts are all welcome news for the sector, not all is rosy in the UK fintech garden. A study released in November by global fintech think tank Findexable found that a mere 1.5 per cent of global fintech firms are founded solely by women, and female-led firms had received just one per cent of total fintech funding. The Diversity For Growth report also found that women made up only 11 per cent of all fintech company board members and 19 per cent of executives across the globe.
One of the key organisations behind the report, Financial Alliance for Women, also conducted a survey of global fintech companies which produced some telling results about diversity progression within the sector. It found that 11 per cent of B2C fintechs (including those run by a woman) used sex as a criterion to segment their market. Meanwhile, 58 per cent of B2C fintechs reported they do not conduct any market research on female customers despite 44 per cent of investors, who were also surveyed, indicating that having business case research on women would better serve the market.
On a more positive note, the Diversity for Growth report did highlight that an increasing number of fintechs were founded by a woman over the past decade where the number of companies with at least one female founder has gone from six per cent in 2010 to 30 per cent in 2020. While male-founded companies did secure the lion’s share of funding over recent years, those with a female founder behind them were also punching above their weight in terms of attracting investment.
As the Findexable report highlighted, fintech is a key enabler in the digital economy playing a significant role in reducing economic exclusion and powering digital transformation. There is however a long way for women to go in grasping these opportunities.
A solution to this problem begins within the fintech sector itself. Here in the UK, there is a strong recognition of the need to take action and it’s been encouraging to see a number of fintech companies and industry bodies setting up initiatives to address not only the gender imbalance but also tackle the under-representation of ethnic minority groups.
Last year’s ‘Fintech For All Charter’ was launched in the UK, focusing on increasing diversity and inclusion across the industry. Among its initial signatories were fintechs Currencycloud and Checkout.com; PwC; investors Augmentum VC, Outward VC and Anthemis; and industry bodies Fintech Circle and UKBAA.
Initiatives like these will only help address barriers that are hindering women from pursuing a career within the UK fintech sector and keeping a lid on the number of female-led companies from coming to fruition. It will be essential for all companies within the industry to commit to principles like those set out in ‘Fintech For All Charter’ and to also explore other means of better engaging with women.
Addressing the lack of women in fintech also requires action beyond the sector as this is part of a gender imbalance within the wider technology sector and across other STEM-related fields.
Pre-pandemic research conducted by community interest organisation WISE found that women made up just over 1m of the core STEM workforce in the UK. While this figure represented an increase of over 350,000 from the previous decade, women still only accounted for 24% of the nation’s total STEM workforce. The WISE report forecast that it would be beyond 2030 before we reach 30% female representation in these fields, a level where evidence suggests a minority group is able to influence real change within an industry.
It will take a multi-layered approach to resolve this issue. Along with continued efforts from national and regional governments to encourage women into the technology sectors, including fintech, we also need to see education authorities channelling more girls into STEM subjects and promoting the substantial career opportunities that are available to them.
Programmes like our own AccelerateHER Awards, which includes specific categories for Fintech businesses (as well as those representing other technology and scientific categories), by promoting and supporting female-founded companies also have a key role to play. Women leading these companies demonstrate the potential to thrive in areas like fintech and inspire others to pursue success in the sector.
At a time when we face so many economic challenges, the fintech sector provides a real bright spot on our horizon. Increasing female representation across the UK and supporting more female-founded companies to thrive will ensure the sector fulfils its full potential by maximising global opportunities.