About a year and a half ago, before Larissa Holmes joined Borrowell as head of people operations, the Toronto-based fintech firm had about a dozen employees, three of whom were women. One was co-founder Eva Wong, and she was determined to build out the fast-growing firm in a way that would not only create a positive and diverse culture, but also achieve gender parity at all levels.
“The intentionality was the key piece,” says Holmes, a former management consultant at Deloitte, who notes that almost 40 per cent of Borrowell’s employee and management roster are now women. “There’s been a huge shift.”
It should be news to no one that a lot of tech startups are very male-dominated environments, with cultures that can be alienating or even at times hostile to women. As industries go, the fintech space in particular shows a lack of gender diversity, which could easily become deeply entrenched if left unchecked.
“You do notice it when you’re the only woman in the room,” says Finn.ai co-founder and COO Natalie Cartwright, who notes that such conspicuous disparities also make it difficult for women tech entrepreneurs to raise funds.
In my own role as a senior partnerships advisor at Toronto’s MaRS Discovery District, I have the opportunity to collaborate with many of the women and men who are working to improve gender diversity in the fintech sector.
There’s mounting evidence from such firms as Borrowell, Wealthsimple and Finn.ai that women in this sector are carving out spaces for themselves, building companies with inclusive, rather than exclusionary, corporate cultures, and organizing events and initiatives geared toward getting more women involved in fintech.
One recent example: the women-focused blockchain conference and hackathon which was held at MaRS this month. The event, geared at developers, investors and entrepreneurs, was organized by CryptoChicks, a non-profit founded last year by computer scientist Elena Sinelnikova and strategic financial planner Natalia Ameline.
As Holmes points out, there’s compelling research showing that firms with diverse and inclusive workforces tend to be more profitable, so strategies aimed at improving diversity are “not just the right thing to do.”
Indeed, a 2015 McKinsey study of 350 large public companies in North America, Latin America and the U.K. found that those in the top quartile for gender diversity tended to outperform their peer firms. McKinsey U.K.’s managing partner Vivian Hunt told the Financial Times that “for every 10 per cent improvement in gender diversity, you’d see a two to four per cent increase in profits.”
For firms like Wealthsimple, internal inclusivity goals reflect its outward-facing commercial positioning, says CFO Leen Li, who notes that about 30 per cent of the company’s 150 employees are women. “Without a diverse workforce, we can’t design a product for everyone out there.”
Women in leadership roles at such fast-growing fintech firms offer the following key strategies for building gender-inclusive companies:
Board/senior management: Nothing sends a mixed message like an all-male management team talking earnestly about gender inclusion. “You have to have senior women in the organization,” Holmes says. “There’s really no excuse not to.” In fact, boards should demand nothing less: An EY-sponsored 2016 analysis of more than 21,000 firms worldwide showed that the presence of women in corporate leadership positions may improve company performance.
Standardize hiring: These firms remove subtle biases from the standard recruitment and interviewing process and cast their nets broadly when looking for new hires. For example, job postings from Wealthsimple and Borrowell are scrutinized to remove male-oriented language that may dissuade women from applying. At Finn.ai, prospects are interviewed by three or four managers and also complete blind tests. “We’re removing bias to the extent that we can,” says Cartwright.
Compensation: As with hiring, firms that look to attract and advance women adopt very clear compensation bands tied to experience and responsibility. Cartwright says that in a few cases, Finn.ai actually offered new female employees a higher salary than they had requested because they had undervalued themselves.
Sponsorship: Women represent half of the workforce, yet few make it to the top. According to #GoSponsorHer, women are promoted 30 per cent less often than men and occupy less than 20 per cent of C-suite roles in Canada. Sponsorship offers a way to bridge this gap. As opposed to mentors, sponsors commit to not just giving advice, but also giving opportunities, using their influence to help advance their sponsoree’s career. Wealthsimple’s CEO Michael Katchen set an example for the industry when he publicly committed to sponsoring team member Christina Shan.
Corporate Culture: Having more women in a firm doesn’t automatically create a more inclusive culture; tech firms need to be intentional about creating an environment that doesn’t favour a certain gender, says Holmes. Both Li and Cartwright point to examples such as flexible work arrangements and parental leave. It’s not just a matter of normalizing this practice, but ensuring that men feel encouraged to take paternity leave. “It makes things more equal both at home and in the workplace,” Cartwright says. Li adds that her firm has partnered with #MovetheDial and also last year set up a Women of Wealthsimple employee group that meets regularly to listen to speakers and network.
Keep score: The old adage that you can’t manage what you don’t measure is relevant. Borrowell publishes its diversity metrics on its website. “We’re very public about the makeup of our team.” Wealthsimple’s Li adds that the company this year began surveying its employees to establish a diversity baseline against which it can assess future progress.
Such moves, executives at all these firms say, don’t merely broaden diversity. They’ve also seen increased retention, reduced turnover and increased interest from skilled applicants. In a highly competitive and rapidly growing sector, these fintech players are now reaping the benefits of multi-faceted strategies designed to produce more collaborative and creative teams. But, as Li points out, the transformation of the tech industry’s male-oriented culture won’t happen overnight. “This isn’t a one-day project or a three-month project.”
Ultimately, I believe if influential companies like these continue to commit to change with progressive policies and public accountability, Canada’s financial technology industry can set an example for the world.
Michelle Peng Greenberg is Senior Manager of Partnerships for Finance and Commerce at the Toronto-based MaRS Discovery District innovation hub.