Women continue to be significantly under-represented within all areas of the financial services industry, especially within fintech.
According to the International Monetary Fund (IMF), under 2% of finance-related CEOs are women and less than 20% of executive board members. Why are these figures such an issue? Aside from the few opportunities available for female talent, there are broader implications impacting business performance and national and international policies.
Based on reports by the IMF, a higher level of women in senior roles is associated with greater financial resilience. Increasing the number of women in economics can create varied economic policy decisions, particularly in a male-focused industry. Studies suggest that women are often more supportive of environmental and sustainability measures and sensitive to social impacts, global challenges that businesses need to address and the push towards sustainable investment.
From a social perspective, many personal benefits come with more women working in finance. These factors should be included within current and future education strategies. Improving the rate of financial inclusions for women in terms of education and financial-related jobs will increase confidence, awareness and empowerment.
With studies highlighting the clear benefits of increasing women in finance, why is the industry still struggling to attract female talent? Two of the vital factors come down to education and overall perception. Over the last few decades, programs have attempted to tackle the number of women in STEM (science, technology, engineering and maths). While 15% of UK engineers and 38% of maths graduates are women, only 13% of the UK STEM workforce are women. Similarly, global female representation in STEM-focused sectors remains under 30%. Even women with the education and skills are not attracted to the industry for the long term. The issue goes beyond STEM; women remain the minority in many areas, including business and economics, where women make up around 35% of the graduate workforce. Over the last 20 years, the number of women who graduated with economic-related qualifications has remained relatively stable or, in some cases, declined.
Studies suggest that many women have a misconception about their individual talent, which deters them from pursuing a career in finance. Reports indicated that women believe they will not perform as well in economics and finance and are therefore less likely to pick these areas at University. With a growing trend among the younger generation to select careers with a social impact and better work-life balance, this misconception is affecting the available talent in the industry. Many women have chosen to exclude a potentially rewarding career in finance at a young age.
Tackling industry perceptions
The finance industry must address the understanding and overall perception. It is critical to partner with schools and universities to gain more insight into the finance and fintech sector and explain things in more detail to the young generation. Enhancing financial literacy would benefit everyone, boost financial confidence, and enable people to understand how things like savings, borrowing and investment work.
It’s also essential to alter the perception of the finance market and finance professionals. It would encourage other talents into a sector that will be critical in driving sustainable and green investments and protecting the future success of communities. The Deloitte Global 2021 Millennial and Gen Z survey indicates that the younger generation wants to take meaningful action, increase their influence on politics and ensure their career choices align with their values. People have higher expectations of a business and want to see how an organisation can create a better future. The financial industry must acknowledge these rising expectations to attract and retain future talent.
Encouraging diverse talent to finance
Improving gender diversity is a challenge and can’t be solved by increasing the number of women in the talent pool. With skills shortages and global economic challenges, the finance industry cannot wait for younger women to influence the gender balance. Finance must attract female talent from other sectors and will require rethinking the industry image. Not all finance positions require excellent maths skills. Fintech opportunities are broad, from sales to operations, and many jobs go beyond having quantitative knowledge.
Talent attraction is the first step in retaining women in the industry and represents another challenge. While many organisations have launched family-focused measures and improved the home and work-life balance, there still seems to be a historical influence within the finance industry that makes it difficult for women to progress to the top.
A strategy doesn’t necessarily need to be about transforming behaviours. The finance industry must encourage women and the entire industry to acknowledge and incentivise the core skills that women bring to the table. Developing the skills at a younger age and recognising the range of opportunities a career in fintech can offer is critical.
A diverse workforce has proven to be a positive for business performance and the economy. It’s also a significant benefit for women. Finance offers a range of opportunities, as well as the environmental, social and governance factors (ESG) and commitment to human-related factors that continue to increase.
The pressure is now on finance and fintech to become more attractive to a broader workforce and emphasis how the industry is directly related to critical global challenges such as environmental protection and sustainability. Most importantly, the industry must engage with women of all ages to transform the historical perception of a male-dominated industry. Finance needs women, and women need the opportunities presented in the sector. Industry, businesses and education must collaborate to entice and support women to join and remain within the finance industry.
