This article, written by Jane Jee one of our advisory board members, was published on Finextra today: The Future of Women in RegTech.
The number of women working in RegTech account for up to 35% of the industry’s workforce, which compares favourably to the FinTech industry, where 29% of roles are held by women. However, more can and should be done - as mentioned by Lucy Heavens, Co-founder of RegTech Women – from encouraging more young women into the RegTech industry, through to supporting women to move up the career ladder.
The rise of women in RegTech
While women seek employment in better-paid industries, their interest in technology has also increased. Additionally, the personal traits of females make them equally well or even better equipped at handling compliance-related issues than men.
Victoria Martin, the Head of Risk of 11:FS, recognises women’s great advocacy skills, their holistic approach to regulatory issues and being more risk-averse compared to males. However, I personally believe they are better at risk assessment which is such a crucial compliance skill. Furthermore, as highlighted by the US labor department the field of compliance has been one of the fastest-growing branches for women in the last two decades.
The huge number of new regulations has led to more sophisticated, rewarding and challenging compliance roles, which is drawing a diverse set of people. I think financial institutions are starting to see the benefit of having a more diverse set of decision makers, especially within compliance departments.
The division between RegTech and FinTech
There is an important division between RegTech and FinTech which frequently get grouped together. They appear similar, however they focus on two different, yet intertwined domains of regulation and finance, conjoined by the power of technology. Born after the financial crisis of 2008, RegTech is the management of regulatory processes within the financial industry and its main functions include regulatory monitoring, reporting, and compliance. One of the largest segments of RegTech is helping businesses improve and automate their anti-money laundering (AML) and know your customer (KYC) compliance processes.
Why are women not represented equally in RegTech?
With that said, there has previously been little in the way of nurturing talent for women, whether through specific opportunities or mentorship programmes that would inevitably increase the level of education and joint success of both genders.
The Redraw Balance campaign by leading creative agency MullenLowe London for the charity Inspiring the Future, highlights how children’s perception can limit their horizons and how gender stereotypes are likely to be determined as early as the age of 7, largely because of the preconceived notions presented by the media and society. This has a huge detrimental impact on girl’s aspirations. RegTech organisations themselves are frequently culprits, not congratulating nor celebrating women’s talent.
Moreover, our educational system fails to interest girls in technology during their formative years. While this trend is primarily visible within the programming and IT community, RegTech, being also grounded in technology, can suffer from this same malaise.
The future is bright for women in RegTech
In 2019, the UK added 60,000 new tech roles but only 16% of those were filled by women. However, the global RegTech market is expected to grow from 6.3 billion USD last year to 16.0 billion USD by 2025, so we should expect the number of roles occupied by women to keep climbing; not only because there will be increasing opportunities, but attitudes are becoming less archaic and conservative.
Networks such as RegTech Women are supporting this rise, as they promote the vital role that woman play in the industry. I was appointed by RegTech Women to be a member of the advisory board and to bring more insight into how women can contribute to the field of Regulatory Technology. This network aims at growing investment, the audience, providing education and support for future female members of the RegTech sector and changing perceptions in society.
Numerous statistics prove that diverse organisations not only perform better but are also more likely to be more financially successful and are viewed more positively. The FCA makes an effort to convince companies to be more open and promote equality. However, the sad reality is that the financial industry is not diverse and the consequences are dire for everyone. Last year, Francesca Hopwood Road, head of RegTech at the FCA, discussed how the hiring process structurally worked against the employment of females in RegTech during the RegTech Women’s event ‘Cracking Communications: Be effective, be confident, be compliant’.
RegTech strives for social justice and reliability, both aspects that women can bring to the table. Compliance has proven itself to be an ideal discipline for women from various backgrounds including law, fraud prevention and risk management, that have a keen interest in delving deeper into “the art of fixing regulatory issues” through technology.
What must be done, to shift barriers in the RegTech industry? As mentioned by Marisol Lopez Mellado, Global Head of KYC Services at IHS Markit, creating a diverse environment is imperative. It is not just about bringing in more females but allowing them to have a clear path of progressing to leadership roles.
Women should not have to parade with billboards trying to draw attention to inequality because their obvious potential contribution should make them included, highly visible and welcomed in the industry.