Like other corners of the financial services industry, the payments world struggles to attract, retain and promote women as well as people of color. In 2020, the U.S. House of Representatives Financial Services Committee documented those disparities in one of the first attempts to compile data on the issue from the nation's banks, which are often a proxy for what's happening in the financial services realm generally.
"Banks and other financial services firms claim to agree with the underlying premise that diverse, inclusive organizations can be more profitable and productive," the House report said. "But despite the known benefits, the financial services industry, including our nation’s banks, remains mostly white and male."
Nonetheless, there are some encouraging signs, with women in payments somehow rising to top roles despite a lack of entry-level jobs for them, according to a report from the consulting firm McKinsey last October.
"Payments has the lowest share of women in the entry-level, manager, and senior-manager ranks, but among the financial-services industry, it is the closest to gender parity in the C-suite (where 39 percent are women)," the McKinsey report said. "Women of color make up 9 percent of the C-suite in the payments industry — the highest representation among all financial-services industries."
In the second edition of the CEOs Sound Off series, we interviewed three payments CEOs who know firsthand how difficult it can be to overcome gender and race barriers to succeed in the field. Below are insights on how the industry can increase diversity in its ranks from Suneera Madhani, the co-founder and CEO of payments processor and fintech unicorn Stax; Melissa Smith, CEO of payments software company Wex; and Bala Janakiraman, CEO of payment disbursement services company Onbe.
PAYMENTS DIVE: How has your personal experience in rising to the top post of a payments company informed your perspective on diversity in the industry?
SUNEERA MADHANI: Especially as a female CEO in this space, and a woman of color in this space in a very male-dominated industry, it's hard to find your own (way) because you are doubted. I will say it's been very evident – the discrimination, the judging environment, just the naysayers. There is a lot of that that takes place for women, but I will say I'm really fortunate to have not let that stop me. I've just always found a way and I think that's been one of the biggest driving factors, is my relentless approach to not taking "no" for an answer, being very solution-oriented, leaning into my gut and my people and my customers. And I will say, I've probably had to fight harder than most and that's the story for many female entrepreneurs, and it shouldn't be that way, but I didn't let that stop me.
MELISSA SMITH: I have always felt like I could be myself here (at Wex). And that the things that made me different were part of the strengths that ended up putting me in the role of CEO. When I leave the walls of Wex and I work in the rest of the world, which I do every day, I am always conscious of the fact that I’m one of a few (CEOs) and that hasn't changed much in the period of time that I've been in business. Although some things have changed, like the way that people talk has evolved, the numbers have gotten a little bit better, but not materially different. So, I do think that I'm aware of the fact that I'm different. Over the years, I’ve translated that, in my mind, into the fact that that makes me memorable, and that instead of a negative that actually can be a positive.
BALA JANAKIRAMAN: Coming from India, my accent was fairly thick, and I was still not very conversant with how to talk to an American audience. So I had to make conscious efforts in making sure that I can communicate better. So I wouldn't say this was a hurdle, but this was a growing opportunity for me to say, "I’ve got to customize my approach to the audience in front of me,"…I get that I came with a good degree, and I had a great job, and I had a supportive mentor. All of those things won't be true for everybody that's looking for a job in the market. So, the onus is really on management to make sure they can create that environment that if there is a person like me — a Bala who arrived in 2002 — that they actually feel nurtured and supported in Onbe to achieve their full potential.
PAYMENTS DIVE: How could the industry attract, retain and promote more people of color?
MADHANI: We have to do the work and the work includes everything from our messaging on our website to where we're recruiting to the job description to looking at our organization and taking actions, but making it measurable for the team, and having a clear focus on it...We should be holding companies accountable not only for diversity within their companies, but also doing business with diverse companies. That's the ask, too…I'm here to take on the good old boys club, and I'm already disrupting it and it's exciting. I'm not going to stop until we're at the top.
SMITH: There are two pieces to that. One is making sure that we're bringing in talent that is diverse. The second part is making sure they feel included...I see industry organizations that are geared in payments specifically towards women. I haven't seen such a thing, and it may exist and I just don't know about it, where it’s geared towards diversity of color. And so I think that there's an opportunity to band together to effect change.
JANAKIRAMAN: We all have to think about process for how do we sign up new employees. So it starts, in my view, with the job description. Do we have involuntary biases coming through in the job description? I'll start with myself, I didn't realize that there are several words that we use that kind of make the job description gravitate towards one segment of the population or over the other. I was looking at data from one of the providers we utilize which said that if you over-index on the term "drive" in your job description, more than likely you're going to get more male applicants than if use you start to sprinkle in the word "create."
SMITH: We put a lot more rigor around who became an intern, meaning that they actually had to fit certain qualifications that couldn't be based on the fact that they're connected to somebody….What we learned from that is going on to college campuses is important, but part of attracting talent is pay. We pay our interns at a market rate that's higher than what other people do, and if needed, we provide housing assistance. And then we give them real work. They know that when they come here they're not going to be schlepping coffee. They're actually going to be doing meaningful work.
PAYMENTS DIVE: How do you think payments companies could attract, retain and promote more women in the industry?
MADHANI: It starts from the top because when you have women in leadership then women will support other women rising up. Also a huge part of success is seeing success. So, as a woman, if I never see other women in my space winning then that deters me from even trying…All the way from the top down, let's hold entire organizations accountable to put women in leadership to be driving decision-making.
JANAKIRAMAN: When it comes to promotion, I think it starts with including people, making sure that people have a voice…understanding how the company strategy is trickling down the objectives and tactics. Letting them shape how they want to go after some of those goals will start to drive results that are no longer concentrated in certain segments of the population.
SMITH: I know you don't see a lot of people like me, so that probably affects my need to make sure that I’m seen more, physically. I want people to see the physical representation. When you are one of not many, it’s really important to people and there's a lot of pressure for performance. You want to be able to show that you can do it.
PAYMENTS DIVE: How is the current dynamic, disruptive change in the payments industry — with so much venture capital fueling startups — affecting the industry's ability to attract and advance women and people of color?
SMITH: A lot of what creates innovation are people who think differently and so that creates an opportunity for diversity. At Wex, our ability to innovate has only increased, and some of that innovation comes from the fact that we have people that look at things from a different lens and diversity plays into that. There are a bunch of startups out there in the marketplace and it keeps everybody on their toes in a positive way.
JANAKIRAMAN: If (companies) don't take this opportunity to differentiate themselves, on how to attract people of color and women, we might never get a chance like this. The dislocation that has come with COVID and with all the stuff that we see about Great Resignation, it creates an opportunity to go figure out how we can source talent across the entire country.
Editor’s note: This interview has been edited for clarity and brevity.