Studies around the world have shown that many sectors, including Fintech can benefit from increased gender diversity in leadership roles and the workforce. Some advantages include bringing in different perspectives, enhanced collaboration, to lowering attrition. According to McKinsey, companies with more gender diversity are 21% more likely to experience above-average profitability. Yet, the International Monetary Fund estimates that among 97 countries, women represented less than 13 percent of leadership in Fintech organizations.

Across the globe, we can see instances of gender inequalities in a range of industries, such as healthcare, transportation, nonprofits, and consultancies. The United Nations Women,  the UN wing that works specifically for Women’s rights, estimates that globally, women only make 77 cents for every dollar earned by men.  Despite some observable changes, many companies still hold deeply ingrained gender biases. These biases hinder women from taking on crucial decision-making positions. Additionally, women-owned businesses are often viewed as exceptions rather than the norm in the "ideal" business environment. This perception creates challenges for women entrepreneurs, affecting their access to capital and opportunities in labor markets.

A January 2023 study by McKinsey indicated that the world’s GDP could increase by $12 Trillion if the gender gap is narrowed by 2025. Companies today recognize the importance of change management, and combine the same with the empowerment of women to identify prominent advantages.  

Challenges Women Face in FinTech 

Three broad issues are noticeable in the fintech ecosystem today. Firstly, not many women actively pursue a career in FinTech. A case in point is a study for the UK, where women make up just 28% of the FinTech workforce as highlighted in a 2023 paper by Deloitte. Gender bias, board rooms run by males, and lesser funding opportunities are a few of the reasons why women find it hard in a space dominated by men. While certain organizations are actively striving to hire more women, their representation drops notably in higher ranks. Business leaders should identify and comprehend the underlying reasons behind this disparity.

 Secondly,  the lack of a good support system for times of growth and uncertainty is necessary. A 2021 report by TrustRadius showed that 57% of women in tech felt burnt out, as opposed to only 36% of men. 

Thirdly, According to an April 2023 research paper from the Journal of Financial Intermediation, women tend to use FinTech products much less frequently than males.  This report underlined that only 32% of women use FinTech products as compared to men.

But when fintech products are predominantly created by males, an opportunity is lost in tailoring products that cater to women in minute ways. A start would be to harness financial data specific to women users and gather insights accordingly to be incorporated into upcoming products.  

But why is female participation in using fintech products crucial? Because it increases the representation of women in the fintech workforce through several interconnected mechanisms. The foremost is how their feedback and preferences become valuable insights for fintech companies, leading to more inclusive solutions. The end result is that fintech firms actively seeking to employ more women to gain a deeper understanding of female user experiences and requirements, such as a women-friendly user interface, or financial challenges specific to women.

Women who are experienced fintech users can also actively contribute to marketing strategies and customer support teams, ensuring that messaging and assistance are culturally sensitive and relevant to female customers. Ultimately, this could also lead to increased investor confidence in women-led start-startups, which can make them realize the potential of products and services designed for women.

 In the broader perspective,  a fintech market that has a considerable presence of women can only be achieved through changing the decision-making lens and restructuring traditional ways of how leaders are chosen. The term that could be used here is, ‘gender intentional’, which means to define rules and strategic processes with a strong focus on gender.  The solution could be as simple as making internal diversity a top priority, especially in the higher ranks.  

However, the issues don't end at the CXO stages. There exists the need to recognize an unconscious bias while hiring, a good method to eliminate this would be to remove names and photos from application processes. The fintech ecosystem has a huge role to play in creating more opportunities for women in terms of better platforms, forums, and initiatives aimed at better participation.   

Digital financial inclusion begins with digital education 

It all begins with early financial education and financial literacy. For better representation of women in FinTech in the long-term, the need currently lies in providing young women with a strong foundation in STEM (Science, technology, engineering, and maths) education.  According to the World Economic Forum's Global Gender Gap Report 2022, just about 33% of the workforce related to STEM professions were women. Additionally, among every five AI professionals, only one was a woman. The future of work calls for strong skill sets in the digital space, and many countries are undergoing a shift in high-demand skills. 

In fact, LinkedIn’s Future of Skills research highlights that digital education is the most sought-after skill in various sectors, including FinTech. With women's digital literacy rate at just  15% due to existing gender barriers, there is a need to address gender disparity. The study also revealed that countries with higher numbers of STEM graduates tend to have narrower gender gaps in terms of financial inclusion. The root of this issue can be traced back to gender stereotypes that manifest during childhood. Often, women are encouraged to focus on non-STEM subjects, leading to implications on their college choices and eventual career paths. An ongoing study since 1994, by the National Center for Science and Engineering Statistics (U.S.), showed how children as young as six years old start to showcase gender-stereotypical beliefs that boys are better than girls in some STEM subjects, such as programming. 

In conclusion, to bring about meaningful change and redefine gender roles in FinTech, a comprehensive approach is vital at every level. This approach should begin with the decision-making processes during childhood and extend all the way up to change management at the boardroom level. Only through such holistic efforts can we redefine gender roles and foster a more inclusive space in the FinTech industry.