Finance is a boring, leave the technology to the men and as for investing, that is far too complicated and risky for a mere female. These statements seem out of place in 2016, yet there is evidence for all of them. Is this an industry problem, a society problem or a combination of both? On International Women’s Day it is apparent that women are not engaging with fintech.
26% of board positions are now held by women1 which is up from just 12.5% in 20102. But when you look at financial services this drops to 16%3 and if you look at the 100 fintech companies that raised venture capital funding in Europe in 2015 it is just 7%4.
Many campaigners blame education and a lack of focus on stereotypically ‘male’ subjects; the STEM (Science, Technology, Engineering and Maths) subjects give individuals many of the skills needed to succeed in fintech. But to focus on those subjects in isolation ignores the fact that a successful fintech company relies on great design and marketing. Is it instead a risk aversion that puts women off starting their own company or joining a start up rather than a lack of knowledge in the ‘relevant’ area?
In the consumer world the way individuals save and invest suggests that women may be more risk averse. If you look at HMRC data it shows that 82% of women, around 5.9 million individuals, choose to put their ISA savings in cash alone. Their male counterparts are 43% more likely to use a stocks and shares ISA.
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Whilst cash savings are a known entity, with a fixed return, individuals choosing to save only in cash are actually opening themselves up to risk, the risk of the real value of their money diminishing with inflation. In fact, research we published earlier this month showed that UK savers were at risk of losing £4.1 billion a year.
Is it a lack of STEM education that leads to this risk aversion? If so, it is possible that we are a long way off solving this problem, as we have to wait for the better educated generation to mature to investing and working age. Perhaps it is about how the industry communicates the message to make it more appealing to women. Digital wealth management makes investments more transparent and easier to engage with, if we remove the mystery it becomes easier to engage with and that is gender neutral.
Perhaps the same thinking that goes into fintech innovation on simpler customer journeys and improved access to financial services should go into the industry itself. Fintech is not the preserve of the privileged few, if we want to continue to innovate and grow as an industry diversity is essential. McKinsey recently published data that showed that companies with gender diverse boards are 15% more likely to outperform their competition. Fintech should not just improve access to financial products, we also need to improve access to the industry itself. That means simplifying messages, improving experiences and ultimately opening the industry up to those that previously would not have considered the fintech option.
1 Financial Times, 2016
2 30% Club
3 Financial Times, 2016
4 Financial News, 2016