How fintech firms are boosting workplace equality

When it comes to the gen­der gap, fin­tech firms have a poor track record. How­ev­er, the rapid­ly grow­ing sec­tor has a unique oppor­tu­ni­ty to address the prob­lem, with a num­ber of firms seiz­ing the moment.  

The sta­tis­tics make for grim read­ing. For exam­ple, women make up bare­ly 11% of all board mem­bers and 19% of com­pa­ny exec­u­tives, accord­ing to the recent Fin­tech Diver­si­ty Radar report from Find­ex­able. The finance sec­tor as a whole suf­fers from a 25% aver­age gen­der pay gap, with the fin­tech ele­ment a par­tic­u­lar­ly poor per­former, at 31.5% in 2019. 

The prob­lem? Finan­cial ser­vices have been “built on a his­toric sys­tem that isn’t fit for pur­pose for a mod­ern soci­ety”, says Michaela Jef­fery-Mor­ri­son, whose com­pa­ny Ascend Glob­al Media ran the recent Women of Sil­i­con Round­about con­fer­ence. She thinks fin­tech firms have a unique oppor­tu­ni­ty: by address­ing their own inter­nal equal­i­ties, they could help build a more equal soci­ety by cre­at­ing wealth-build­ing tools and ser­vices that rep­re­sent more peo­ple. 

“Address­ing the tal­ent pipeline is imper­a­tive to improv­ing areas such as the gen­der pay gap,” she says. “While the indus­try needs to address the rea­sons why minor­i­ty groups are dis­ad­van­taged in the work­place, it is also crit­i­cal for the future work­force to rebuild sys­tems that they are kept out of in the first place.”

Closing the gap

A hand­ful of firms are already break­ing the mould, demon­strat­ing how tan­gi­ble efforts can result in real change. For exam­ple, chal­lenger bank Mon­zo has slashed its gen­der pay gap from 20% in 2019 to just 4% today. It attrib­ut­es its suc­cess to a num­ber of instru­men­tal changes with­in the busi­ness, includ­ing a com­bi­na­tion of hard poli­cies and incre­men­tal shifts at man­ag­er and indi­vid­ual lev­el.

It’s one of the rea­sons chief oper­at­ing offi­cer Suja­ta Bha­tia joined Mon­zo in June last year, aim­ing to dri­ve that 4% right down to zero as part of Monzo’s Women in Finance Char­ter com­mit­ment. This includ­ed a tar­get to increase its pro­por­tion of female board mem­bers to 40% by 2020 — it’s now 44%.

Mon­zo exam­ines its pro­mo­tions and pay reviews with a diver­si­ty and inclu­sion lens, Bha­tia says, 

“look­ing at whether we have the right lev­el of diver­si­ty com­ing through the com­pa­ny”. While the com­pa­ny has diverse hir­ing com­mit­tees and runs a struc­tured process, it’s also will­ing to exper­i­ment, she says.  

“For exam­ple, our head of writ­ing knew he need­ed to improve the diver­si­ty on his team. He made a per­son­al com­mit­ment to it,” she says. “One of the things he did was rewrite job descrip­tions, tak­ing away some of the clas­sic fil­ter cri­te­ria around cer­tain edu­ca­tion­al bias­es or expe­ri­ence. He built a diverse inter­view­ing pan­el and end­ed up mak­ing two diverse hires. It took a bit more time in the process, but it yield­ed results.”

The role of ERGs 

It’s impor­tant to encour­age indi­vid­u­als to enact change in all the areas they can fea­si­bly influ­ence, in terms of gen­der equal­i­ty and more broad­ly. That’s one of the fac­tors behind the recent rise of employ­ee resource groups (ERGs).

These are vol­un­tary, employ­ee-led groups con­nect­ing peo­ple with sim­i­lar back­grounds and expe­ri­ences to help fos­ter a diverse, inclu­sive work­place by pro­vid­ing per­son­al or career-relat­ed sup­port. The groups are now found in 40% of all com­pa­nies, a 9% increase from last year, accord­ing to Sequoia’s Employ­ee Expe­ri­ence Bench­mark­ing report.

Buy now, pay lat­er com­pa­ny Clear­pay has estab­lished two ERGs, one for women and one for the LGBTQI+ com­mu­ni­ty, as part of its tar­get for 50% of senior lead­ers to be women by 2025. 

It’s ear­ly days, says Bindy Edel­man, Clearpay’s direc­tor of diver­si­ty and inclu­sion. The first steps have been to cap­ture inter­est, cre­ate plan­ning teams to estab­lish pur­pose, pri­or­i­ties and focus, and build inter­nal com­mu­ni­ca­tions chan­nels. So far Clearpay’s ERG for Women has held a nego­ti­a­tion work­shop, while its LGBTQI+ ERG has worked to raise aware­ness of events like the Trans­gen­der Day of Remem­brance.

Spon­sor­ship from senior lead­er­ship helps give ERGs vis­i­bil­i­ty and cred­i­bil­i­ty, says Edel­man, and to engage lead­er­ship as active role mod­els and cham­pi­ons for ERG caus­es. It enables senior lead­ers to con­tin­ue to grow and learn from oth­ers and con­tribute to their suc­cess. They also con­tribute to diver­si­ty and inclu­sion progress more broad­ly. 

“Senior lead­ers who choose to be an ally of an ERG often appre­ci­ate the par­tic­u­lar impact they can have by using their posi­tion to cham­pi­on and bring vis­i­bil­i­ty to issues, and also engage with oth­er lead­ers on the ERG’s activ­i­ties.”

A nuanced approach

A com­bi­na­tion of top-down pol­i­cy set­ting and empow­er­ment at an indi­vid­ual lev­el will “real­ly move the nee­dle”, says Bha­tia. 

“When I stand up in front of the com­pa­ny I talk about our goals, and diver­si­ty and inclu­sion is a big head­line with­in that,” she explains. The oth­er big dri­ver is a “cot­tage indus­try of peo­ple com­ing up with their own solu­tions”, she says. “Push­ing only from the top is nev­er going to be suc­cess­ful if peo­ple don’t real­ly believe it and they’re not able to find their own solu­tions and their own path to con­tribute to that.”

What Bha­tia calls the “big, sweep­ing work” is under­way, she believes. It’s now down to “nuances” in terms of refin­ing inter­nal action to fur­ther equalise gen­der num­bers and pay lev­els across Mon­zo – a good exam­ple for fin­tech firms at large.