Diversity and inclusion are increasingly becoming important topics in the FinTech industry. Although FinTech has been hailed as a sector that is breaking down traditional barriers to entry, there is still room for improvement when it comes to diversity and inclusion.
How diverse is the FinTech space?
In terms of ethnic diversity, studies have shown that the FinTech industry still has a long way to go in terms of achieving diversity and inclusion. Data shows that ethnic minorities are underrepresented in both entry-level positions and leadership roles within the industry. However, although the FinTech space still has a way to go, the industry has a higher proportion of employees from ethnic minority groups (20%) than the tech sector as a whole (15.2%).
The representation of women in leadership positions within the FinTech industry remains low. Although women are well represented in entry-level positions, the percentage drops significantly at higher levels of seniority. This disparity is not unique to the FinTech industry, as it is a problem that extends across the entire financial services sector. A 2019 report by Accenture found that only 22% of FinTech workers in the UK are women, and just 11% of FinTech start-ups in the UK have a female founder. This disparity is also reflected in the higher levels of the industry, with only 12% of senior management positions in UK FinTech firms being held by women.
What can businesses do to encourage change?
Implementing Diversity and Inclusion (D&I) policies
Businesses can begin by implementing formal D&I policies that set out clear goals and objectives for increasing diversity and inclusion in their workforce. This should include a focus on recruiting, retaining, and promoting underrepresented groups, such as women and individuals from ethnic minority backgrounds.
Provide diversity training
Providing diversity training to employees can help to raise awareness of unconscious biases and promote a more inclusive workplace culture.
Introduce mentorship and sponsorship programs
Mentorship and sponsorship programs can provide underrepresented groups with access to senior leaders who can provide guidance, support, and advocacy to help them succeed in their careers.
Encouraging flexible working
Flexible working arrangements, such as flexible hours and remote working, can help to make the workplace more accessible to women and individuals with caring responsibilities.
Tackling the pipeline issue
Businesses can also address the issue of lack of diversity and women in leadership positions by actively working to address the pipeline issue. This can include initiatives such as internship programs and school outreach programs aimed at attracting and developing underrepresented talent.
Increasing transparency around diversity and inclusion metrics, such as publishing regular diversity reports and setting targets for increasing representation. This can help to hold companies accountable and drive progress in this area.
The benefits of a diverse workforce
Research by McKinsey has shown that companies with diverse workforces tend to perform better financially. McKinsey found that companies in the top quartile for ethnic and cultural diversity were 35% more likely to have financial returns above their industry mean.
A diverse team with different backgrounds and perspectives can lead to more creative and innovative solutions. This diversity of thought can lead to better problem-solving and a more comprehensive approach to decision-making.
Having a diverse team will have a positive impact on how you and your business understand and engage with your customers. A team that comprises of people from different backgrounds will be able to better understand the needs of a diverse customer base. This can lead to more targeted and effective products and services that meet the needs of a wider range of customers.
An inclusive and diverse workplace can improve employee morale and increase job satisfaction. Employees are more likely to feel valued and respected when they can bring their whole selves to work and feel that their unique experiences and perspectives are appreciated.
How can businesses break down the traditional barriers to entry?
One of the key barriers to accessing opportunities in FinTech is a lack of relevant skills and knowledge. Businesses can help to break down this barrier by providing access to education and training programs, such as internships, apprenticeships, and mentorship programs.
Companies can encourage diversity in recruitment processes. This can include implementing blind recruitment, where candidates are evaluated based on their skills and experience rather than their background, as well as making use of diversity-focused recruitment agencies.
Businesses can offer work experience opportunities, such as internships and mentorship programs which can help to provide individuals from disadvantaged backgrounds with a stepping stone into the industry.
It is important to note that diversity and inclusion are not just about numbers, but also about creating a welcoming and inclusive culture that values and leverages the unique perspectives and experiences of people from all backgrounds.