Two personal stories have influenced me desire to set up a professional network for women working in all aspects of the RegTech sector. Firstly, a memory that came to me on International Women’s Day 2018 when I was speaking on a panel about Women In Tech and someone asked me whether I had personally experienced gender-based discrimination. My immediate answer was no (because it's often not obvious) but then I remembered why I had resigned from my very first role in financial services. A more junior (male) member of my team was being paid only nearly as much me though I had three years more experience than him. Despite formally raising this issue, the firm refused to take action. I voted with my feet.
Secondly, I have been working in the RegTech industry for the last two years and I’ve been to many, many industry events and was taken aback at the mismatch between the female expertise I was encountering day-to-day and the number of women speaking on panels or giving keynotes or being recognised as leaders in this industry. I want to do something positive about this - to turn the spotlight onto this array of female excellence, to celebrate what it brings to the RegTech industry, the broader RegTech community and ultimately, to the regulated industries.
To back-up my personal experiences, I did some research about women in business, finance and technology more generally. These findings do speak to the need for us to be aware of gender diversity within our corner of the world. It is worth acknowledging at this point that diversity (or lack of it) is not just a gender issue but that there are other under-represented groups that we need to be mindful of, and indeed, intersections between groups that can further exacerbate injustices and inequalities. However, given that this is primarily a women's network, I will focus on that (for now!).
1. Women in Business
As of June 2018, only 23.6% of board roles in FTSE 350 were held by women (1). What’s more shocking is some of the excuses that were cited to explain this:
‘I don’t think women fit comfortably into the board environment’
‘There aren’t that many women with the right credentials and depth of experience to sit on the board - the issues covered are extremely complex’
‘Most women don’t want the hassle or pressure of sitting on a board’
‘Shareholders just aren’t interested in the make-up of the board, so why should we be?’
‘My other board colleagues wouldn’t want to appoint a woman on our board’
‘All the ‘good’ women have already been snapped up’
‘We have one woman already on the board, so we are done - it is someone else’s turn’
‘There aren’t any vacancies at the moment - if there were I would think about appointing a woman’
‘We need to build the pipeline from the bottom - there just aren’t enough senior women in this sector’
‘I can’t just appoint a woman because I want to’
This is despite evidence that gender diversity on a company’s management board has a significant positive impact on productivity growth and returns to investors (2). MSCI found that the stronger productivity growth at these leading companies translated into higher profits, measured by returns on equity, than at those which did not have gender diverse boards.
Whilst we should be cautious about these claims - companies that have better gender diversity may also be better at doing other things to promote productivity too but there is a growing body of research that specifies the benefits - both financial and other - of having a better balanced workforce at all levels of the organization.
2. Women in Finance
Research shows that women are still under-represented at senior levels in finance - FT research in 2017 shows Women made up 25.5 per cent of senior roles in 2016, compared with 23.7 per cent in 2014. The number of women in mid-level jobs stayed flat at just over 39 per cent for the same period (3).
Despite hoping that my encounter with the gender pay gap was now a thing of tha past, unfortunately, the gender pay gap is still alive and kicking. Whilst the requirements around transparency about gender pay gap reporting is a step in the right direction, the information disclosed is pretty shameful. still exists - and thankfully, there is now more transparency around this. (figures are from the Treasury Committee 2018 report from the inquiry into Women in Finance)
- The average (mean) pay gap per hour at banks and building societies in the UK is 35 per cent. The average (median) pay gap per hour at banks and building societies in the UK is 28 per cent. (4)
- There are significantly more men in the top earnings quartile for the financial services sector. 75 per cent of staff working in the top salary quartile at banks in the UK are male (4)
- The UK’s inaugural round of gender pay gap reporting showed that the top 10 investment banks in London paid their female staff 29 per cent less than their men, while women’s bonuses were 51 per cent lower on a median average basis. Other financial services firms also revealed big gender gaps. (5)
3. Women in Tech and STEM
In the booming FinTech sector, a sister industry to RegTech, the stats don't look much better:
In UK FinTech, women represent 29% of the workforce, despite 47% of the workforce overall being female. Furthermore, only 17% of women hold leadership positions (6) the percentage of women executives in fintech is only 8% worldwide, as compared with 22% in the major banks; (7)
looking at the companies listed for the Fintech50, out of 124 founders only 6 are women (8);
In technology more generally, there are similar levels of under-representation: (Inotribe Power Women in FinTech Index: Bridging the Gender Gap 2015)
- 50 % of women who work in technology are projected to leave the industry due to the hostile work environment (9)
- 40% of women with engineering degrees will never enter the technology work force or will eventually leave (9)
- In the US, only 27% of all software engineers are female (9)
- 10% of technology companies publicly traded in the U.S. with all male boards (9)
- 14.3 % of the executive team at the top 100 tech companies are women (9)
- The number of working women in technology is significantly lower than most other UK work sectors - only 17% of those working in technology in the UK are female (9)
- 15% of people working in STEM are female (10)
- Only 5% of leadership positions in technology held by women (10)
4. Female Founders
The RegTech industry is full of new businesses - founded by both male and female entrepreneurs. In 2017, £5,6bn of venture capital was invested into UK businesses whoever, only 13% of senior people on UK VC investment teams of women and 48% of investment teams have no women at all. In 2017, 83% of UK VC deals involved founding teams with no women and for every £1 of CV investment in the UK, all-female founder teams get less than a penny. All-male founder teams get 89p. Mixed gender teams get the remaining 10p. (11)
Analysis by academics at Columbia University and Harvard Business School of pitches recorded at TechCrunch Disrupt New York, a funding competition, revealed that both male and female investors asked men how they would expand their businesses and women how they would prevent losses, reinforcing stereotypes of men as go-getting and women as risk-averse. (12)
However, there is no business reason why these discrepancies occur - Mass Challenge, a US accelerator that examined 350 companies going through its programmes last year, found that men-only businesses were actually a worse investment. For every dollar of funding, start-ups with women on the board generated 78 cents, while those founded only by men generated 31 cents. (13)
So what can be done?
I think it's fair to say that it's not entirely a doom and gloom scenario - the fact that serious research into the gender gap is being done (and funded) and that there are industry initiatives working to correct much of this is all very positive. Progress is being made - diversity issues are on the agenda of boards and financial companies, anecdotal evidence would suggest that this is not just symbolic but to be really be successful, change also needs to come from the bottom up rather than just top down.
At the risk of sounding like a dreadful internet meme, we need to be part of the change we want to see. As women, we need to come together, to collaborate, to nurture and support each other, to share our knowledge, expertise and experience with each other. RegTech Women has been established to enable these conversations and possibilities in the hope that this can help drive success for us as individuals, our firms and the industry as a whole.
- https://ig.ft.com/managements-missing-women-data/ (paywall)
- https://publications.parliament.uk/pa/cm201719/cmselect/cmtreasy/477/477.pdf (pp 25-29)
- https://www.ft.com/content/d9053876-31bb-11e8-b5bf-23cb17fd1498 (paywall)
- https://www.ft.com/content/abb4c88e-d9bd-11e6-944b-e7eb37a6aa8e (paywall)
- https://www.ft.com/content/d753fe52-289d-11e9-a5ab-ff8ef2b976c7 (paywall)