Why the pay gap in Financial Services needs to be addressed

Originally published on the Ignition Wealth website.

Getting women into technology jobs and the pay gap are issues frequently discussed in the media. It is perhaps not surprising that a pay gap in financial services is also very high.

Financial services, in Australia, tops the list for the highest pay gap between men and women, at 29.6 percent, exceeding technology’s 24.3 percent. It is not the technology businesses, which offer less jobs to women, but financial and insurance services, which is worse. This fact comes despite women forming 55 percent of the industry’s workers.

In most industries, the pay gap is highest in well paying jobs where very few women are hired. Financial services, however, offers both low pay generally and a high pay gap. Women are given non-managerial roles and paid very little, accounting for the large pay discrepancy between what women and men are being paid.

In America, the gap is widest at 30 percent and in the UK, financial services is also the industry with the worst pay gap, at 30 percent. In the US, female financial advisers make 56c to every dollar a male financial adviser will make. This is assumed to be because financial advisers are paid by commission, and people tend to get financial advice from those they already know, and who are just like themselves.

For fintech, the combination of both technology and financial services, two industries with significantly high pay gaps, it is even worse. Globally, less than eight percent of fintech directors are women and in Australia, this trend persists.

While it remains significant, comparing it to just a few years ago shows a change for the better. There has been a sharp increase over the past few years of hiring women, not only in fintech, but in financial services as a broader industry. More and more women are being hired, and more and more women are moving up the ranks, into managing positions, for more and more diverse boards of directors.

The issue needs to be addressed because women make up over 50 percent of the population. Financial services are mostly geared towards men, despite the fact that the majority of women manage their household finances and on average, spend more than males.

A lot of fintechs are facing this challenge and trying to change things, offering new and varied services which are geared towards both men and women, and which goes outside of traditional banking and accounting. The pay gap is slowly closing, with more varied management boards, and with more female voices and perspectives to be heard.


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