The challenges and vast opportunities of being a ‘Woman in RegTech’
The numbers of women in RegTech sector have been historically low, but recently have surged and now account for up to 35% of the industry’s workforce, which compares favorably to the fintech industry, where 29% of roles are held by women. There are a few reasons why the Regtech industry has seen such an increase in the number of females taking up various positions within the industry in question. And while the numbers seem to be very optimistic, as mentioned by Victoria Martin, the head of risk of 11:FS, despite considerable changes within the industry there is still a massive way to progress especially when talking about young women coming into this industry by supporting women to be able to move up the career ladder and take on managerial and c-level positions.
So, what were the major contributing factors that brought in more women into the Regtech industry? While there are some general reasons such as women getting more and more interested in technology and seeking employment in better-paid industries, there are also some personal traits that make females equally well or even better equipped at handling compliance-related issues than men. Victoria Martin sees the relevance and the contribution women can make in this industry by having great advocacy skills and also having the capacity to have a more holistic approach to regulatory issues. What is more, she believes that women tend to be a lot more risk-averse compared to their male counterparts. Finally, as evidenced by studies, such as the one published by the US labor department, the field of compliance has been one of the fastest-growing branches for women in the last two decades, a field that has brought in a lot of talent to Regtech.
Separating RegTech and fintech, an important distinction
It is crucial to make an important division between Regtech and Fintech which frequently get compared or what is worse, equaled to. To have a better understanding of both, it is valuable to look into definitions provided by local and international bodies. The Financial Stability Board (FSB) defines fintech as “technologically enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.” Whereas the UK’s Financial Conduct Authority (FCA) defines Regtech as “a subset of fintech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities.”
While these two subfields of the financial market might share some similarities or joint fields, they focus on two different, yet intertwined domains which is regulation and finance, conjoined by the power of technology. Regulatory technology, or RegTech, was born after the financial crisis of 2008 when technology stepped in to prevent a repeat situation. It is the management of regulatory processes within the financial industry and its main functions include regulatory monitoring, reporting, and compliance. This is done by helping businesses improve and automate their AML and KYC compliance processes.
While the Regtech market is vast in its offer, choosing a reputable partner such as Kompli-Global that can provide accurate and comprehensive intelligence on organisations and their people to empower regulated entities to make informed decisions and safeguard their interests. Kompli-Global also helps companies to better understand the intricacies of regulatory and compliance-related responsibilities, using their vast knowledge and years of experience collaborating with large financial institutions.
The challenges faced by women in RegTech
There has previously been little in the way of nurturing talent for women, whether through opportunities or mentorship programmes, that would indubitably increase the level of education and joint success of both genders. This should begin at the classroom level when young women are starting to make big life choices about their future careers and be continually available for them as they harness their passions and step into fields that have previously been male-dominated.
Campaigns such as the one organised by MullenLowe London show the massive importance of how children’s perception can limit their horizons and how gender stereotypes might already be determined at the age of 7 because of the preconceived notions presented by the media and society. This has a massively detrimental impact on the lack of education and aspirations for women who may not be tempted to pursue certain careers due to such perceptions. Regtech organisations themselves are frequently culprits amplifying these notions by not gratifying nor celebrating women’s talent especially those contributing to the success of companies they work for.
The Regtech industry much like the financial market may actually suffer from the same ailments, and that is failing to see the massive benefits that women can bring to the table. Another issue might be stemming from the educational part which fails to entice women to pick up technology during their education. While this trend is primarily visible within the programming and IT community, Regtech having been grounded in technology can pose the same threat.
Time for growth and time for change
In 2019, the UK added 60,000 new tech roles but only 16% of those were filled by women. Furthermore, 17% of fintech founders are women and only 3% of investments go to female-founded firms. Meanwhile, the global RegTech market is expected to grow from 6.3 billion USD last year to 16.0 billion USD by 2025, so we would expect the number of female-owned roles to keep climbing in the years ahead. Not only because there will be increasing opportunities, but attitudes are becoming less archaic too. Compliance has also seen a great increase of women of various professional backgrounds who join the industry successfully utilising their skills and talents. This has been further supported by the recent launch of industry body Women in RegTech, which already boasts a substantial group of devoted women who believe in equal opportunities within the Regtech industry.
Women in Regtech has appointed Jane Lee, the CEO of Kompli-Global to be a member of the advisory board and to be part of the initiative, and to bring in more insight into how women can contribute to the field of Regulatory Technology. Apart from that WiR itself aims at growing investment, the audience, and providing education for future female members of the Regtech world. Finally, it targets to increase the number of women in the sector, by spreading the word around the globe and changing perceptions that have long haunted the financial market.
A diverse company is one that prides itself on giving equal opportunities to all people regardless of their age, gender, religion, or skin colour. As proven by research, the benefits that arise from implementing diversity into your workforce are plenty. Numerous statistics prove that such organisations not only perform better but are also more likely to be more financially successful. What is more, they frequently seem to be portrayed more positively by the public thereby having easier access to potential customers, business opportunities, and partnerships.
Organisations such as FCA put a lot of effort to convince companies to be more open and promote equality. The sad realisation however is that the financial industry by large is not diverse and the consequences are dire for everyone. The FCA’s mission is to show based on its own example how to implement diversity and inclusion within employment, regulations, and in its efforts as a public body, and to share these findings with others to understand the great changes these steps make in the organization.
What does the future look like?
So what does the Regtech industry stand to gain by allowing more women into its ranks? As it turns out, there are plenty of benefits, but most importantly, ways to complement what is currently considered adequate. Regtech, just like any other dynamic new-age industry, strives for perfection and reliability, both aspects that women can bring to the table. The area of compliance has proven itself to be an ideal place for women from various fields like law, fraud prevention or risk management, that have a keen interest in delving deeper into “the art of fixing regulatory issues” through technology. They frequently come equipped with excellent legal skills, regulatory knowledge, and an open mind to grasp the intricacies of implementing these into software-based solutions.
What is it then that has to be done, to shift this obsolete point of view and start seeing real change and openness in the Regtech industry, that could then permeate into other fields that have so far been heavily dominated by men? As mentioned by Marisol Lopez Mellado, Global Head of KYC Services at IHS Markit it is crucial to retain women within the industry and that creating a diverse environment is imperative. She also mentions the fact that the industry needs to change as a whole and women need to have career progression possibilities. So it is not just about bringing in more females but allowing them to have a clear path of progressing and reaching C-level and leadership roles which is where women are scarce.
The conclusion is really simple. This should no longer be a battle of egos, a battle of sexes, or a battle at all. Women should not have to parade with billboards trying to draw attention, because their assets are what should make them visible in the industry. As Carlos Ghosn the Chairman of the Renault-Nissan Alliance said: “hiring and promoting talented women is the right thing to do for society – and it’s an economic imperative”.
