Only 40% of FinTechs have appointed a woman to their boards.
There is a widely held perception that technology and finance are male-dominated industries. Thus, a barrier for women to enter these fields and advance in them is being created. There are also stereotypes around what is “female-appropriate” work, such as being less technical or working in sales or customer service as opposed to leading product development or working as a data scientist.
IMF: Less than 25% of Board Seats for Women
According to the International Monetary Fund Report Women in Fintech: As Leaders and Users, globally, 65% of women have an account, lagging that of men at 72%. This means that the gender gaps in financial inclusion continue to persist. „Financial technologies can help overcome some of these obstacles and financially empower women as ease of usage and accessibility increase,” notices this IMF Report. Apart from gender gaps in the usage of digital financial services, the economic relevance of the role of women as leaders in the financial industry is also strong. Women hold less than 25% of board seats in banks and bank supervision agencies and account for about 5% of bank CEOs globally.
Women represent less than 10% of leadership—both as founders and as members of the executive boards of FinTech firms. “While the share of women leaders has been steadily improving over time—mostly as improved representation in newer firms—large gender gaps continue to persist,” notices the Report. In fact, the share of women in leadership positions is even lower than that in the traditional banking industry and technology companies. Moreover, there is considerable regional variation in firms founded by women, with countries in the Western Hemisphere, Asia and the Pacific, and Europe having the highest share of companies founded by women, while the Middle East and Central Asia have the lowest.
Diverse Teams are more creative and effective
There is a positive relationship between having more women on executive boards and the revenue earned by the respective FinTech firm, as well as the funding that they receive for future investments. A 10% higher share of women on executive boards is associated with roughly 13% higher revenue and funding earned by a firm. Increasingly, investors are looking for opportunities in diverse teams and in companies that are led by women. Women often possess an intimate understanding of customer needs, which drives product design and development solutions as well as helps to create products that can be tailored to customer needs.
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The gender gaps in the usage of digital financial services across countries are associated with gender gaps in financial literacy, digital literacy, and socio-cultural factors. “Countries with a higher share of women graduating in Science, Technology, Engineering, and Mathematics (STEM) and with lower gender gaps in upper secondary education tend to have lower gender gaps in digital financial inclusion,” concludes the IMF Report.
More Opportunities and Networking
The Deloitte 2020 report on gender equity contains similar findings. According to it, women control USD 11.2 trillion in investable assets in the US, with half of them having made their own investment decisions. As more women enter the investment world, the opportunities to invest in women-led FinTech startups and companies are likely to increase.
FinTech companies should offer mentorship opportunities to female employees, as this will allow them to develop the skills needed to advance in the industry. Additionally, companies should provide more options to network with other women who may have previously achieved success in the field.
