Experts often cite the benefits of financial technology (fintech) and digital finance for women. At the same time, few women are represented in decision-making roles in this fast-growing industry.

While they make up half of the financial services workforce in many countries, women fill only about 20 per cent of the leadership roles. Their representation in emerging markets is lower. Even so, they do better in finance than in the other part of the equation, the technology sector.

A closer look at the figures

The overall tech workforce was 28.8 per cent female in 2020, and despite growth in women’s representation on boards and in C suites at tech companies in the past ten years, there’s still a long way to go. Out of nearly 1300 technology companies across the world, women hold on average 16.6 per cent of board seats.

While 35 per cent of higher education graduates in science, technology, engineering and mathematics (STEM) programmes globally are female, many of them, according to Catalyst, end up leaving STEM careers.

The fast-growing fintech industry doesn’t appear to fare better in terms of women’s leadership.

The financial industry is making rapid progress in boosting the number of women in senior leadership roles, but fintech lags more traditional finance in terms of gender balance. “Despite starting with a blank slate, fintech has emerged as an outlier struggling with gender balance at the board level,” according to international management consultancy Oliver Wyman.

Missed opportunities

Placing women in leadership positions tends to drive innovation, increase productivity, and boost profitability, says a study by Deloitte. Yet among fintech founders, women are less likely to receive investor funding than their male counterparts.

“More diverse teams create better results,” affirms Margaret Miller, Lead Financial Sector Economist at the World Bank Group and co-moderator of a session at the Financial Inclusion Global Initiative (FIGI) Symposium.

“It’s business sense to be looking at how we can incorporate women and women’s voices more in leadership.”

The stubborn gender gap in fintech leadership stems from more than the lack of diversity in financial services and the scarcity of women across the wider tech sector. Differing cultural norms also come into play, along with each country’s current economic conditions.

In Pakistan, for example, women are employed largely in the informal sector, says Roshaneh Zafar, Founder and Managing Director of the Kashf Foundation, a non-banking micro finance company. This reflects a pattern seen in many developing countries, with around 95 per cent of women’s work in Asia and 89 per cent in Sub-Saharan Africa being done informally, according to a report from the World Bank Group and partners.

Zafar pointed to educational barriers and questioned whether women were being educated to become managers. In her view, perceptions about women and leadership must change, which also means cultural stereotypes need to be broken down.

“The lack of networking is something that prevents women from getting not only the investments they require but also the amounts of investment,” she says.

“Women don’t lack the expertise or the ability. It’s really the perception that creates the glass ceiling, both within institutions and within the investor space.”

Championing women as leaders

The Central Bank of Egypt (CBE) has started dedicating annual awards to outstanding women in the banking sector, with winners receiving learning opportunities at globally prestigious universities, including Harvard.

May Abulnaga, First Sub-Governor, sees a crucial role for regulators in promoting women, starting from the top down.

“Today, as a regulator, we have been able to achieve a number of milestones towards building an inclusive financial sector.”

The CBE has also undertaken a joint programme with Egypt’s National Council for Women to promote female financial empowerment.
Laura Fernandez Lord, Head of Women’s Economic Empowerment at BBVA Microfinance Foundation (a subsidiary of Spain’s multinational financial services firm BBVA), adds:

“There is only one way to move the needle to bridge the gender financial gap, and that is to lead by example.”

Possible approaches include promoting women champions for organizational change, bringing men into the discussion, training top managers on gender diversity, and investing in career counselling, career planning, mentoring and coaching for both men and women. But organizations and companies seeking to improve their gender balance may also need tools for tackling unintended biases, rules on hiring 50 per cent women employees, and mandatory availability of day-care facilities.

Fintech firms in the Middle East and North Africa (MENA) region are piloting the business case for gender-intelligent services. The Arab Women’s Enterprise Fund (AWEF) has actively helped to promote solutions from mobile wallets to merchant payment integration. Its Eight Lessons from the Field report urges fintechs to take a deliberate approach to meeting the needs of women.

Including women in fintech — a holistic approach

A study by the International Development Research Centre (IDRC) recommends a holistic approach, both to expand financial services for women and increase the number of women in fintech. The supply of financial services is not by itself a panacea.

Governments, donors, and financial institutions must intervene where needed to boost financial literacy, improve product design, and address specific constraints for women.

Otherwise, rapid growth in digital banking and the creation of a cashless society could serve to deepen and reinforce the existing digital gender divide.
Even before the current pandemic, an estimated 52 per cent of women tended to remain totally offline, compared with 42 per cent of men worldwide, according to ITU’s 2019 Measuring Digital Development report.

In our post-pandemic world, the ability to connect to usable affordable digital services will surely be the new baseline for full social and economic inclusion, especially for women.

Note: This article is based on a panel discussion during the 2021 Financial Inclusion Global Initiative (FIGI) Symposium.