UK FinTech’s top female leaders call for regulation to narrow the gender pay gap and encourage stronger female progression in the sector

• New survey finds that lack of salary transparency and low female representation in senior roles is driving a higher-than-average pay gap in FinTech
   

• Female FinTech leaders say an absence of industry recognition and opaque promotion ladder are the main obstacles to female progression in the sector
   

• Regulation to narrow the gender pay gap, along with clearer career progression paths is believed to be key to move the dial on gender diversity, equity and inclusion (DEI)

While progress for women in UK FinTech is being made, more has to be done to achieve gender parity, according to the latest report by EY and Innovate Finance ‘Changing the face of UK FinTech: from glass ceiling to open doors: championing equality and career progression for women in FinTech’ (pdf). 

The research, comprising interviews with the 120 nominees of the Innovate Finance Women in FinTech Powerlist, found that barriers to success still exist within the sector, with top female leaders in UK Fintech citing lack of industry recognition for their contribution (27%) and non-transparent promotion processes (25%) as particular challenges to career progression. 

The research also looked at solutions to these challenges, with regulation of the gender pay gap surfacing as the top way (17% of respondents identified this as their first choice) to improve gender diversity, equity and inclusion (DEI).

Improved reporting seen as critical to reducing the gender pay gap

According to the Office for National Statistics, the UK’s gender pay gap – the difference between men and women’s median hourly earnings – stands at 14.9% for all types of employees, across all industries. However, this gap significantly increases in the tech (27%) and financial services (26%) sectors. In the FinTech sector, which experiences limited public reporting, EY analysis estimates the gender pay gap to be 22%.

The views canvassed through the research identified that the key contributing factors to the gender pay gap in the UK FinTech industry are the low levels of transparency around pay, and low female representation in higher paying roles. To address this, FinTech firms – both large and small – should commit to consistent salary bands to ensure parity when hiring, and look to improve salary transparency using tech-enabled solutions and engaging payroll and accounting software companies to automate processes. In addition, increased visibility of female leadership in FinTech, both within organisations and throughout the industry, is expected to contribute positively to progress.

Anita Kimber, Partner, FinTech Policy and Ecosystem Leader at EY, comments: “Our second annual Women in FinTech report reveals some fabulous examples of incredible women leading and holding senior positions within the sector. However, equality is an ongoing journey, and despite some focus, there is still a long way to go. For FinTechs universally, a clear priority is to understand pay inequality and work to resolve it. We believe more extensive and transparent reporting will be a critical part of the solution. Getting compensation right is important at all levels, particularly for mid-level and junior workers who represent the future of the industry. We believe more equitable pay will help FinTechs improve their access to female talent – competing, attracting and developing the right skill sets to help their businesses succeed, and we hope the recommendations outlined in this report will help power material change.”

Women currently only hold around 10% of FinTech board seats

The EY European Financial Services Boardroom Monitor shows that across UK financial services as a whole, the gender split among board directors is currently 39% female, 61% male. However, according to Findexable’s 2021 Diversity for Growth Report, women hold only 11% of all FinTech board seats and represent less than 20% of company executives, and only 40% of FinTechs have appointed a woman to their boards. 

Recommendations to drive progress

EY and Innovate Finance have outlined the following recommendations to improve gender equality in the UK FinTech sector:

• Create a more transparent culture around pay and report openly on the gender pay gap
  
  
• Ensure women are being adequately informed of the value of equity stakes, stock options and other reward and compensation options available
  
  
• Expand upskilling opportunities for women interested in tech-oriented careers, especially those re-entering the workforce
  
  
• Engage recruiters to prioritise diversity 
  
  
• Make leadership accountable for gender equality goals
  
  
• Create a more diverse network of advisors, especially for female founders and senior executives
  
  
• Provide leadership development for promising young female workers and offer training to more senior leaders

Chris Woolard, Head of UK Fintech at EY and also Chair of EY’s Global Regulatory Network, comments: “The FinTech sector is an increasingly important part of the global financial services ecosystem, with the UK playing a leading and exemplary role. However, the fact that female representation, particularly at board level, is still so low is not sustainable for an industry in growth mode. Now is the time to build on early progress with further regulation to help drive a material narrowing of the gender pay gap. Change has to be accelerated and an environment fostered that encourages greater diversity of thinking. Not only because it is the right thing to do, but because it will ensure the UK FinTech sector is in the best possible position to continue leading the way globally.” 

Janine Hirt, CEO at Innovate Finance, adds: "The UK has built a world leading FinTech ecosystem that is setting the global standard for innovation in financial services. We’re pioneers in evolving the industry and pushing forward with ideas and solutions that are transforming the financial capabilities for consumers and businesses alike. As the preeminent FinTech hub, we in the UK must do a better job of fostering greater gender parity in the sector, and narrowing the gender pay gap. If we are to build a sustainable, forward-looking FinTech sector, which builds on the achievements and progress made to date, it’s vital we tackle the diversity issue now – and it starts with progressive regulation that can move the dial and deliver tangible change.”

Notes to Editors

• The report reflects input received from research participants over the course of seven months, including a workshop event held in February 2023, conducted by EY and EY Seren aimed to generate a set of actionable recommendations (both short and long-term). Participants represented FinTechs of all sizes, as well as incumbent financial institutions and investors.
   

• EY also surveyed 120 nominees to the Innovate Finance Women in FinTech Powerlist
   

• EY and Innovate Finance realise that true diversity is broader than gender, and even gender is not binary. For the purpose of this research, focus was placed on those FinTech workers who identify as women. Diversity in all its forms – including racial, ethnic, cultural, generational, sexual preference and neurodiversity – are critical goals alongside gender equality. 
   

• Gender Pay Gap data included in the report has been sourced from Gender pay gap in the UK - Office for National Statistics (ons.gov.uk). 
   

• EY’s FinTech gender pay gap estimate is based on gov.uk pay gap calculator for 275 of UK's most funded FinTechs.