We often hear of fintech growing at such-and-such rate, with new firms constantly emerging that ‘revolutionise’ the way we shop, spend, save, bank, pay and so on. It is an industry that disrupts; that insists on not only new ways of doing, but new ways of thinking.
And yet, for all its forward-thinking and future-proofing, fintech is struggling when it comes to diversity and inclusion. Less than 30% of the UK’s fintech workforce are women. 17% of senior roles are held by women and just 5% of founders are women.
In an article released earlier this year, Deloitte also noted that early adopters of fintech services are predominantly male. The data is limited, but a picture is emerging of an industry predominantly run by men.
When it comes to ethnic diversity, the industry is mostly White. Just 1% of European start-up founders are Black and BAME business owners find it more difficult to access funding than their White counterparts.
The fintech industry is reaching a stage where it needs to ask itself what it stands for. Does building a progressive, innovative approach to finance mean former bankers wearing jeans to work? Or are we ready to address this shortcoming in our sector with action?
I believe it’s time for positive change, but we need to reassess some of the points being made.
It’s time to move the conversation forward
When attempting to understand this lack of diversity, fintech leaders will make the same argument: “We would like to increase diversity across the organisation, but we don’t receive nearly as many female, non-white, LGBTQ+ or differently abled applicants. Our hiring reflects the talent pool we have to choose from.”
We have to break this feedback loop. If we value what diversity can bring to business (which we should, considering that many studies have shown that diverse businesses perform better than less diverse ones), we need to do much more.
The good news is that changes to the world of work are acting as a catalyst. The more flexible approach to working which many businesses have adopted, triggered by the pandemic, comes with many advantages – a more diverse talent pool to hire from being a key example.
Flexible working can help parents get back into work and extends new opportunities to talented individuals living in different areas. It’s not a complete solution to the diversity problem, but it is a springboard for a better approach to hiring.
What can be done?
Fintech experienced record-breaking growth in 2021. With the rise of embedded finance and the Bank of England exploring the idea of digital currencies, financial services are still only in the very early days of huge change in the industry.
If we’re going to build diverse teams, the most impactful changes we can make are within our own companies. Having a clearly defined flexible working policy to support the needs of your team and asking for ideas about making things more inclusive goes a long way.
Anonymous forums where people can share ideas and make comments are also helpful, and it’s important to make sure companies communicate how they work to job applicants before they join.
The key approach comes from involving your people in finding solutions. As leaders, we don’t have to have all the answers – often our people will be the greatest source of feedback and ideas. Diverse and inclusive environments foster diverse ideas.
Another avenue to consider is internal training and mentorship programmes for people who are underrepresented. If collectively we prepare these groups for more senior positions, over time we will see the results. And as more applicants fill these senior positions, it will be impossible to say that the talent pool to choose from is too small.
Finally, we can learn from companies that are putting inclusion directly into their product design. Finance used to serve people by geography, now it is beginning to serve people by community. The more we directly communicate with underserved communities the better our approaches can be.
I believe diversity within fintech is improving every single day. We just need to go a little faster – something fintech has always been good at.
Different approaches will be better suited for different businesses – the most important thing is that the focus now leads to action. If we can do that, the fintech sector will continue to grow and be better prepared to tackle future challenges.