Though the world is getting more progressive every day, gender equality is still a problem that needs solving – and the fintech sector is no different.
The reality of the Fintech industry is that it is one of the least gender-diverse industries with women making up only 7% of the pool. This gap is especially noticed in funding. Financial institutions, investors and company founders all together are able to change the landscape and make the industry more equal, enabling women to access all varieties of the required resources needed to succeed.
In light of this, The Fintech Times sat down with Ximena Alemán, Co-Founder and Chief Business Development Officer at Prometeo, the Uruguayan fintech company leading open banking API adoption throughout Latin America, to discuss women in fintech and the challenges they can face.
What kind of problems arise from the lack of gender equality within fintech and finance
Broadly speaking, there are two things that I think are really important to highlight when we talk about gender equality in finance. The first is the lack of products that are customised to female customer segments. Financial inclusion is an issue across the world, but having a lack of products and services specifically for the female customer segment creates issues.
The second is the lack of financial support for start-ups that are led by women. When we talk about the gender inequality in the fintech space, I think what we’re seeing is the merging of two industries, finance and tech, that have historically been male-dominated. Fewer women enter these industries due to societal perceptions and that leads to gender inequality in the fintech space. The numbers show this reality, with female-led startups having less funding, often receiving less than half of the deal size than male-led companies. I wrote an article last year and found women-led fintech raising around 1% of all VC deals in the history of fintech.
An example of these concerns coming together is in Latin America, which already is an underbanked region, but we know that women tend to avoid going to banks when they need to finance their own small businesses because they feel that banks don’t understand their needs – despite the fact women are often better borrowers and tend to pay back loans with a better success rate.
This bias is very damaging for women in fintech, and these are concerns that we need to address.
Why is it important for the industry to address these issues?
My impression is that we’re always trying to ‘polish’ society, to be constantly improving and make it better. We started with human rights, we had to understand that each human being has a certain set of rights. Then when you look closer you start to see disparities, so it’s time to polish again and make this better and smoother. Gender inequality is what I believe my generation has to polish in order to make a fairer society and be able to develop ourselves and unleash our potential.
When it comes to fintech, I think it’s really important to repair that inequality and create products and services that attend to female customer segments. It is important that, as women, we can have the financial support we need, whether that’s to live our lives or to go on and create our own fintech companies.
Have you experienced any of these problems first-hand?
Yes, particularly when trying to get our funding. As a female entrepreneur, it has been hard, me and my co-founders have had to work a lot to be able to accomplish the funding that we need for our startup.
I think it’s really important that we as women discuss this, because when you speak in terms of gender, changing perspectives is key when striking such a complex problem, as you are overcoming much more than gender and are actually overcoming everything else.
How do you think we can achieve gender equality within fintech?
That’s a great question, and there’s a great shift that’s happening already in fintech, particularly when looking at Latin America. In that region there’s a female revolution of fintech being led by women, there’s still not full equality, but things are starting to happen.
A huge part of solving the issue is having great women leaders within tech that can be great role models to the rest of the industry. Women are creating great fintech solutions, and are taking on the role of fintech ambassadors in their country. This is a key way to help lift women up in the industry and keep encouraging them to step forward with their ideas.
What advice do you have for any aspiring female founders?
I always try to focus and just stress the emotional tools that you have as an entrepreneur that you can develop to help you overcome challenges in order to not get frustrated. For fundraising, you shouldn’t ask your co-founder etc to do the fundraising for you, you have to persist with your business idea despite everything – I really think that’s key.
You have to persist. It’s important that we create our inner strength and also be aware when gender bias appears. With enough persistence within ourselves to work towards what we want, while that doesn’t always translate to success it does translate into self- esteem, which is such an important thing.