It’s time for Fintech (and all industries) to embrace diversity

The financial technology (fintech) industry has grown exponentially in recent years and is making big waves in finance. According to The Brainy Insights, the global fintech market is projected to experience a compound annual growth rate (CAGR) of 26.2% between 2022 and 2030 – a clear testament to its impressive growth potential.

While fintech is clearly booming, there’s one area where it’s still lagging: diversity. A recent study found that while 70% of male executives believe the fintech sector is inclusive, only 25% of female executives do.

As a female fintech entrepreneur of Asian heritage, I have seen firsthand the lack of diversity in our industry. Climbing the ladder of an “old boys club” where gender and race were not considered was extremely challenging. I often felt like I had to fight much harder for a place at the table.

So how can businesses make an impact? I’ll share my tips for doing just that and why diversity is important in fintech (as well as all industries).

Related: How Can Women in Fintech Break the Glass Ceiling?

Lack of 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 lagging behind in terms of representation. Let’s take a look at some statistics to better understand why this is a problem:

• TechNation found that ethnic diversity in fintech has increased from 12% in 2011 to 20% in 2021. Although minority representation has improved, we still see a massive lag compared to other industries, especially when looking at representation in senior and C- level positions, where minority representation fell to 8% for black and Asian people and 11% for other ethnic minorities.
• Women currently make up 30% of the fintech workforce. However, the figure drops to 17% when looking at senior roles.
• When it comes to sexual orientation, Glassdoor found that 53% of LGBTQ+ employees have experienced or witnessed anti-LGBTQ+ comments from colleagues, and 47% feel that being ostracized could hinder their careers.

Personally, this experience resonates with me. I remember being one of the only women in more than one company. This left me feeling isolated, undervalued and unappreciated – an experience 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 about more than just representation.

Diversity goes beyond ethnicity, sexual orientation and gender, but rather encompasses individual differences such as background, experiences and perspectives. This means that for a workforce to be truly diverse, they must foster an environment where the human experience as a whole is represented and respected.

Related: Don’t just sit at the table, turn it around. A reflection for female entrepreneurs.

Benefits of diversity in fintech

However, this is not just a moral argument. Studies have shown that diverse teams produce better results and lead to greater innovation. McKinsey & Company conducted research that found companies in the top quartile for gender diversity are 15% more likely to outperform their peers, and companies in the top quartile for ethnic diversity are 35% more likely to outperform their peers.

In addition, a diverse workforce provides better access to top talent. By expanding the field of potential candidates, companies can draw from 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 employee engagement among all employees. This leads to an improved overall corporate culture, which in turn can lead to increased productivity and performance.

Tips for increasing diversity in fintech

So what can companies do to increase diversity within their fintech organization? Here are some tips to get you started:

1. Engage leadership

Engaging your leadership is the best way to ensure your company values ​​diversity and inclusion from the top down. If your C-level executives aren’t on board with diversity initiatives, they won’t succeed. That’s because change has to start at the top, which means making sure your leaders understand why diversity is important.

Collect data and evidence that highlight the company’s challenges and set goals. Your leadership team should clearly understand the current diversity in your organization and be able to set measurable goals with timelines for improvement. Be sure that this 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 could mean offering 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 professionals of color. Leaders and those in a position to sponsor others should cast their nets wide and consciously seek out candidates from diverse backgrounds.

Related: It’s more than a seat at the table: 4 attributes of an inclusive workplace

3. Recruitment bias must be addressed

It is important to have a recruitment process that does not exclude potential job candidates based on gender, race or other protected characteristics. Many companies use general criteria and processes, which may not be effective in recognizing the best fit for the organization regardless of background. Make sure you track your recruiting data closely so you can identify any biases that may exist in your organization.

At my firm, we ensure that our interview panel is diverse and objective to select the best candidate for the job. You can also use technology and AI-powered tools to ensure a fair and objective 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 is important and taking steps to increase it, companies can ensure that their organizations are best positioned for success. So start making some changes today and watch the benefits of a diverse and inclusive organization unfold!