While progress for women in UK fintech is being made, more has to be done to achieve gender parity. The latest report by EY and Innovate Finance Changing the face of UK FinTech: from glass ceiling to open doors: championing equality and career progression for women in FinTech further supports this.
The research comprised of interviews with the 120 nominees of the Innovate Finance Women in FinTech Powerlist, It found that barriers to success still exist within the sector. Top female leaders in UK fintech cite a lack of industry recognition for their contribution (27 per cent) and non-transparent promotion processes (25 per cent) as particular challenges to career progression.
The research also looked at solutions to these challenges. Regulation of the gender pay gap surfaced as the top way (17 per cent of respondents identified this as their first choice) to improve gender diversity, equity and inclusion (DEI).
Improved reporting seen as critical to reducing the gender pay gap
According to the Office for National Statistics, the UK’s gender pay gap – the difference between men and women’s median hourly earnings – stands at 14.9 per cent for all types of employees. Not just in the financial sector, but across all industries. However, this gap significantly increases in the tech (27 per cent) and financial services (26 per cent) sectors. In the fintech sector, which experiences limited public reporting, EY analysis estimates the gender pay gap to be 22 per cent.
The views canvassed through the research identified that the key 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-paying roles.
To address this, fintech firms – both large and small – should commit to consistent salary bands to ensure parity when hiring. They must look to improve salary transparency using tech-enabled solutions and engaging payroll and accounting software companies to automate processes. In addition, increased visibility of female leadership in fintech is expected to contribute positively to progress. This must take place both within organisations and throughout the industry.
Leading by example
Anita Kimber, partner, fintech policy and ecosystem leader at EY, comments: “Our second annual Women in FinTech report reveals some fabulous examples of incredible women leading and holding senior positions within the sector. However, 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 resolve it. We believe more extensive and transparent reporting will be a critical part of the solution. Getting compensation right is important at all levels. Particularly for mid-level and junior workers who represent the future of the industry.
“We believe more equitable pay will help fintechs improve their access to female talent – competing, attracting and developing the right skill sets to help their businesses succeed, and we hope the recommendations outlined in this report will help power material change.”
Women currently only hold around 10 per cent of fintech board seats
The EY European Financial Services Boardroom Monitor shows that across UK financial services, the gender split among board directors is currently 39 per cent female, 61 per cent male. However, according to Findexable’s 2021 Diversity for Growth Report, women hold only 11 per cent of all fintech board seats. They also represent less than 20 per cent of company executives. Furthermore, they only represent 40 per cent of fintech 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 gender pay gap
- Ensure women are being adequately informed of the value of equity stakes, stock options and other reward and compensation options available
- Expand upskilling opportunities for women interested in tech-oriented careers, especially those re-entering the workforce
- Engage recruiters to prioritise diversity
- Make leadership accountable for gender 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 leaders
Ensuring a more diverse future
Chris Woolard, head of UK fintech at EY and chair 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.
“However, the fact that female representation, particularly at board level, is still so low is not sustainable for an industry in growth mode. Now is the time to build on early progress with further regulation to help drive a material narrowing of the gender pay gap. Change has to be accelerated and an environment fostered that encourages greater diversity of thinking. Not only because it is the right thing to do. But because it will ensure the UK fintech sector is in the best possible position to continue leading the way globally.”
Janine Hirt, CEO at Innovate Finance, adds: “The UK has built a world-leading fintech ecosystem that is setting the global standard for innovation in financial services. We’re pioneers in evolving the industry and pushing forward with ideas and solutions. Ideas that are transforming the financial capabilities for consumers and businesses alike.
“As the preeminent fintech hub, we in the UK must do a better job of fostering greater gender parity in the sector. We must narrow the gender pay gap. If we are to build a sustainable, forward-looking fintech sector, which builds on the achievements and progress made to date, it’s vital 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, chief operating officer of 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.
“Key to addressing this issue is to broaden career and training programmes. This is as well as working harder to retain female talent. By building a stronger, more diverse workforce, the fintech industry will be better placed to represent the customers it serves for the long term.”
Meanwhile, Joanna Kori, head of people for Encompass Corporation, said: “The fintech industry has evolved significantly and must be open and accessible to all. Ensuring parity across the board requires work from all parties. With support from executive-level personnel is particularly important when it comes to implementing progressive workplace policies. For example, flexible working initiatives, 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, which enables them to reach their professional goals while maintaining a good work-life balance. There is so much untapped potential and, if we are to continually see positive change, flexibility is key.
“Women themselves should also be proactive about making the fintech and technology sectors 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 day-to-day business activity but also in helping women to access and excel in the industry,” she added.
