'Crossover hiring' can address the gender gap in fintech
A scarcity of women in fintech – as employees, founders and investors – is slowing the industry and stunting careers.
Progress has been incremental at best, particularly at the leadership level. While one survey found that 37% of fintech workers are women, they make up just 19% of the C-suite. The numbers are even worse for female founders. Of all venture capital deals in fintech in 2019, only 7% had a female CEO; 93% were headed by men.
As the fintech industry looks for ways to boost the number of women, crossover hiring – recruiting from traditional financial service firms to fintechs – has emerged as an effective strategy.
More women across the fintech ecosystem means greater diversity of thought, better knowledge of the female market, a broader, more innovative array of products and services, greater profitability and increased prosperity.
Gender equality, both for individuals and collectively, has risen to the top of the business agenda. As this year’s theme for International Women’s Day, “Each for Equal,” explains: “Equality is not a women's issue, it's a business issue. Gender equality is essential for economies and communities to thrive.” That is certainly true for fintech.
Benefits of Crossover Hiring
Crossover hiring is a natural solution for fintech diversity because women working in traditional financial services have plenty of transferable skills. Many traditional financial services firms are also fintechs in their own right, meaning many women may have direct – not just transferable – expertise. Women who have spent a long time at large firms also bring with them the extensive networks from those organizations, which can work to a startup’s advantage when it comes to partnerships, acquisitions and integration with larger firms.
The financial services industry is arguably the richest talent pipeline for fintech. But few fintech firms, recruiters or potential job seekers know how to make the crossover leap.
The following three strategies can help broaden the pool of candidates and diversify the fintech industry, while also equipping potential candidates with the practical knowledge needed to transition into the fintech space, respectively.
Capitalize on transferable skills and learn the lingo of fintech
When people think of fintech, they often picture teams of engineers and developers. However, that’s just one category of fintech employees. There are fintech jobs in client management, legal, regulatory/compliance, sales, marketing and human resources.
One major disconnect in crossover hiring is that fintech and financial services use very different language in their job postings.
For example, in fintech, the word “growth” can apply to sales, marketing, business development and account management. Jobs might include “growth team lead” or “head of growth.” In financial services, comparable positions would fall under “revenue,” “sales” or “business development.”
In one posting for a “growth team leader,” the company is seeking someone to “develop a comprehensive digital strategy to drive business growth, users and overall revenue.” Another fintech posting, this one listed as a “growth enterprise” job, is seeking “an experienced customer-facing professional to manage some of our largest relationships with leading fintech and financial services firms.”
Clearly, these jobs could be filled by people who do similar work at a bank, asset manager, brokerage or other financial institution. If they don’t know the lingo of fintech, however, they might skip over jobs with “growth” in the title. Resumes can also be a point of disconnection. Automated screening could easily eliminate qualified candidates whose resumes lack critical fintech-specific keywords.
Similarly, human resources teams and recruiters might not think to adapt recruitment and job advertising language to attract a broader candidate base. Some may not even understand the potential of the traditional financial services talent pool.
Pursue the power of connection by building new networks
Women seeking to work in fintech – and those who want to hire them – should proactively expand their networks. In some cases, they can branch out internally. Many traditional financial organizations, facing a talent shortage and looking for a competitive advantage, are seeking to integrate their tech and non-tech talent to bring a multidisciplinary approach to solving problems.
Consequently, it may be easier than expected to make the connections needed to explore and advance internally or develop the skills needed to move to a pure fintech.
For those on the hiring side, from recruiters to company founders, it’s equally important to expand their networks. One male fintech founder was interested in bringing more women in to his company but all the candidates were male, reflecting his business network. He made an effort when attending industry conferences or other events to focus on connecting with women with relevant, transferable skills and knowledge. He ultimately found the chief technology officer he was seeking.
One other important advantage of active networking for both firms and candidates is the opportunity to dispel myths and explore cultural differences between traditional and fintech firms. Some women may worry that they not only lack applicable skills, but that fintech culture also may not be a good fit for them. Newer and smaller fintechs may have a startup feel, from unpredictable hours to insular leadership that is exclusively or predominantly male. There may also be questions about compensation and work-life balance.
It’s good practice to inform yourself of the culture within the industry from a firsthand source and not rely on assumptions. In fact, many startups are actually welcoming and supportive of women, encouraging flexible work schedules with the understanding that it’s not so much when and where you do the work, but that you get the work done.
Be Bold and Take Chances
Much of traditional hiring comes down to a simple calculation: Has the candidate done a similar job before and can they do it successfully in the new organization? That approach excludes a lot of capable people and doesn’t result in the dynamic workforce that companies need. More than ever, companies need continuous learners with broad skills and experience. People with the curiosity and drive to transition into a challenging new fintech position often fit the bill.
Job-seekers, employers, entrepreneurs and recruiters all need to think differently. That requires taking a certain amount of calculated risk. Boldness, however, feeds boldness and building on a diverse workforce is easier than starting from just a few diverse hires.
Tapping the Untapped Market to Boost Women in fintech
The rapid growth of fintech means that the need for talented workers and leaders will only increase, perhaps exponentially. The rich pipeline of women in traditional financial services remains largely untapped. By understanding the depth of transferable skills, being cognizant of the ability to “speak the same language” for recruiting, expanding networks and taking chances, fintech candidates and firms can open up new worlds.
With a diverse workforce, fintechs can distinguish themselves by developing products that are designed by women, for the female market. They can also send a clear statement that the firm values its diverse customers. Importantly, women will bring a perspective and diversity of thought that improves business outcomes.
The scarcity of women in fintech is not only stunting careers, it’s creating a drag on business success. Not so long ago, fintech was a new idea. Now, it’s poised to enter its next stage of growth, fueled by the talents and experience of women.
As we celebrate International Women’s Day 2020, the potential for women in fintech – and beyond - is greater than ever. As the IWD campaign explains: “The race is on for the gender equal boardroom, a gender equal government, gender equal media coverage, gender equal workplaces, gender equal sports coverage, more gender equality in health and wealth ... so let's make it happen.”
By Donna Parisi, head of finance and fintech at Shearman & Sterling and Michelle Tran, Founder, NYC FinTech Women