Why we need to support female FinTech leaders during COVID-19
“FinTechs are clearly reshaping financial services.”
This was the admission that Visa president Ryan McInerney had to make on 13 January 2020 after confirming a $5.3 billion acquisition of FinTech startup Plaid - and just 18 days before COVID-19 first arrived in the UK.
This announcement is also the latest example of a financial services giant taking steps to protect their dominant position, as the industry faces up to the threat posed by FinTech - a market predicted to reach $460 billion by 2025.
However, while there's no doubt that technological innovation has caused significant disruption within financial services in recent years, data reveals that FinTechs still have a thing or two to learn from their more established counterparts when it comes to the value of supporting female leadership.
Only last year, research published in the Harvard Business Review found that women excelled over men in creativity around change, taking initiative, acting with resilience, practicing self-development and driving for results.
In this time of crisis we now find ourselves in, the requirement for these types of leadership skills could not be more crucial for emerging businesses, and the data clearly shows that we’re more likely to find them in women.
Paradoxically, there is currently a $300 billion annual credit deficit in funding for small businesses owned by women, which is expected to grow due to the economic fallout caused by COVID-19.
As a response, The Visa Foundation (the philanthropic arm of Visa) announced this week that it would donate $200 million to support small and micro businesses around the world, with a particular focus on fostering women’s economic advancement.
Other established financial services players have also sat up, paid attention to this type of data, and taken steps to get their house in order when it comes to growing and supporting female leadership.
For instance, Mastercard signed up to HM Treasury’s Women in Finance Charter with a promise to have 40% females on its UK senior team by the end of 2020. The payments giant was able to meet this target 14 months early in October 2019. In that same year, annual revenue grew by 12.9% to $16.9 billion.
Aviva has also increased the proportion of women hired into senior roles (the most senior 5% of employees), with a rise from 34% in 2018 to 38% in 2019. Last month, the insurance firm reported its operating profits were up 6% to a record £3.2 billion.
Now look to a FinTech industry, famed for adjective overkill like “disruptive”, “innovative” and “groundbreaking”, and we see a wanting sector when it comes to a) delivering gender equality within the workforce; and b) identifying the business value of female-led entrepreneurship.
Indeed, a recent survey by LendIt found that only 37% of FinTech workers are women, and just 19% are at C-suite level.
More depressingly, All Raise, which advocates for women in tech and investing, reported that just 7% of all VC deals in FinTech during 2019 had a female CEO.
“In terms of ethnic diversity, it tends to be better. In terms of gender diversity, it tends to be worse”, said Valentina Kristensen, director of growth and comms at Oaknorth, when asked by Forbes journalist Madhvi Mavadiyato to compare FinTech with other sectors she’s worked in.
This coronavirus crisis has transformed the idea of “working from home” from a luxury into a means of business survival.
At the same time, the epidemic has driven a massive 72% rise in the use of FinTech apps in Europe, according to research from deVere Group.
As a result, coronavirus confirms something we already suspected: a society now totally dominated by digital and online.
This unique situation provides an equally unique opportunity to flex the muscles of a more gender balanced-led work environment.
With both mothers and fathers now forced to work from home, we find ourselves on an equal footing, providing the perfect moment to evenly distribute family tasks and be more considerate in terms of each other's approach to work.
“I believe the lockdown imposed by COVID-19 will show many women that they can raise a family while also pursuing senior roles in their career”, said Romy Hughes, director of tech consultancy Brightman, in a recent article.
“In time, this will change the nature of business as we know it, as more women will have the confidence to pursue those top jobs, and more people will believe they can do them. Whether someone has, or plans to have a family or not, will not even enter into the equation.”
Some food for thought, then, as a conclusion:
It should come as no surprise that females comprise the vast majority of the world’s frontline health workers during this coronavirus crisis - 90% of the nurses and more than half the doctors in China.
And while usually equated with nimbleness and agility, it’s these very female-led skills and qualities that are essential if emerging FinTechs are to come out from the other end of this battle against COVID-19.