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The financial technology (fintech) industry has developed exponentially in recent years and is undergoing major changes in finance. According to The Brainy Insights, the global fintech market is estimated to record a compound annual growth rate (CAGR) of 26.2% between 2022 and 2030 – clearly demonstrating its impressive growth potential.
While fintech is clearly advancing, there is one area where it still lags behind: diversity. A recent survey found that while 70% of male leaders believe the fintech sector is inclusive, only 25% of female leaders believe so.
As a female fintech founder with an Asian heritage, I have seen firsthand the lack of diversity in our industry. Climbing the “old boys club” ladder, where gender and race were not considered, was extremely difficult. I often felt that I would have to fight much harder for a place at the table.
So how can companies make an impact? I will share tips on how to do it and why diversity matters in fintech (and in any industry as well).
Related: How can women in Fintech break the glass ceiling?
No representation in the fintech industry
In its simplest form, diversity includes age, gender, race, social class, sexual orientation, and religion. Unfortunately for the fintech world, we are still behind in terms of representation. Let’s take a look at some stats to better understand why this is a problem:
- TechNation found that ethnic diversity in fintech increased from 12% in 2011 to 20% in 2021. While minority representation has improved, we still see a huge lag compared to other industries, especially when it comes to representation in leadership and executive levels , where minority representation fell to 8% for blacks and Asians and 11% for other ethnic minorities.
- Women now make up 30% of the fintech workforce. However, that number drops to 17% when looking at senior positions.
- Regarding sexual orientation, Glassdoor found that 53% of LGBTQ+ employees have experienced or witnessed anti-LGBTQ+ comments from co-workers, and 47% believe disclosure could hinder their careers.
Personally, this experience resonates with me. I remember being one of the few women in more than one company. It made me feel isolated, unappreciated, and unappreciated — an experience that is all too common for many people of color, LGBTQ+ professionals, and women in fintech.
Why diversity trumps representation
The lack of representation in fintech is worrying. While it is important to increase this representation, it is also important to understand that diversity is more than just representation.
Diversity goes beyond ethnicity, sexual orientation and gender, but rather embraces individual differences such as backgrounds, experiences and perspectives. This means that for a workforce to be truly diverse, they must create an environment where the human experience as a whole is represented and respected.
Related: Don’t just sit at the table, turn it over. Reflection for women entrepreneurs.
The benefits of diversity in fintech
But this is not just a moral argument. Research has shown that diverse teams perform better and lead to greater innovation. McKinsey & Company conducted a study that found companies in the top quartile of gender diversity are 15% more likely to outperform their peers, and companies in the top quartile of ethnic diversity are 35% more likely to outperform their peers better results than their peers.
In addition, a diverse workforce allows better access to the best talent. By expanding the circle of potential candidates, companies can tap into a larger pool of talent and find the best candidate for each role.
Finally, companies that value diversity and inclusion will experience a higher level of trust, respect and commitment among all employees. This leads to an improvement in the company’s overall culture, which in turn can lead to increased productivity and efficiency.
Tips for increasing diversity in fintech
So what can companies do to increase diversity in their fintech organization? Here are some tips to get you started:
1. Involve leadership
Leadership commitment is the best way to ensure that your company values diversity and inclusion from top to bottom. If your C-level executives are not committed to diversity initiatives, they will not succeed. That’s because change has to start at the top, which means making sure your leaders understand why diversity matters.
Gather data and evidence that highlights your business challenges and set goals. Your leadership team should have a clear understanding of the current state of diversity in your organization and be able to set measurable goals with a timeline for improvement. Make sure it can be tracked with data and reports.
2. Sponsor with diversity in mind
The best way to increase diversity in your organization is to sponsor with diversity in mind. This can mean providing internships or mentoring programs for people from diverse backgrounds, and sponsoring events and conferences that focus on diversity and inclusion.
In her book, Sylvia Ann Hewlett found that men are 46% more likely to have sponsors than women, and Caucasians are 63% more likely to have sponsors than people of color. Managers and those who can sponsor others should cast their nets wide and deliberately seek candidates from a variety of backgrounds.
Related: More than just a seat at the table: 4 attributes of an inclusive workplace
3. Recruitment bias needs to be addressed
It is important that the recruitment process does not exclude potential job candidates on the basis of gender, race or other protected characteristics. Many companies use generic criteria and processes that may not be effective in identifying the best fit for an organization, regardless of their background. Make sure you track recruitment data closely so you can identify any bias that may be present within your organization.
In my company, we make sure that our recruitment panel is diverse and impartial in order to select the best candidate for a given position. You can also use AI-powered technology and tools to ensure a fair and impartial recruitment process.
Final thoughts
The goal of any diversity and inclusion initiative should be to create a workplace where everyone feels respected, valued and included, regardless of background. By understanding why diversity matters and taking steps to increase it, companies can ensure that their organizations are best equipped to succeed. So start making some changes today and watch the benefits of a diverse and inclusive organization unfold!
