Fintech needs more women

By Aisling Finn on Monday 8 March 2021

OpinionAlternative LendingDigital BankingSavings and Investment

Female CEOs should be a norm and not an exception.

Fintech needs more women
Image source: CoWomen/Pexels.

In a piece also published this morning I took a deeper look into the world of fintechs and IPOs and how the long-promised but yet to materialise fintech IPO boom will not include enough women.

In fact, as it stands there are more FTSE 100 CEOs called David than there are female CEOs of FTSE 100 companies—and don’t even get me started on the number of Steves.

But why is it that an industry that has been so groundbreaking for so long is still so behind the times? 

In a recent phone call a seasoned fintech veteran pointed out to me that in terms of gender diversity, fintech seems to be an imperfect marriage of the bad bits of ‘fin’ and ‘tech’.

We know that both finance and tech are massively dominated by middle-aged, straight, white men so it’s no wonder that their younger sibling, fintech, is marred by the same issues, right?

The concept of ‘that’s just how things are done’ is simply not good enough anymore. 

Female CEOs shouldn’t be headlines 

It’s also simply not good enough to put female leaders and CEOs on a pedestal. They should be the norm, not the exception. 

The industry is not doing enough to ensure that the fintech ecosystem is actually representative of the world around us and not just this imperfect marriage of tech and finance, i.e. straight, white, men. 

The fact that there has never been a female founder take her company to IPO here in the UK should horrify and outrage everyone, not just those in the industry.

I don’t know about you, but I can almost count female fintech CEOs in the UK on two hands and founders who still play an active role in their companies on one. 

Fintech can’t hold itself to this higher standard of innovation and groundbreaking technology when it is just more of the same when it comes to diversity.

If we take a look at the wider financial industry, there is still a lot of issues surrounding diversity, but there have been massive steps taken in the past few years.

Now I know I’m about to put female CEOs on the pedestal that I have just lamented but, for the first time ever the British Business Bank has a female CEO, Catherine Lewis la Torre and Judith Hartley is the CEO of its two subsidiaries, British Business Investments and British Patient Capital.  

But, in the spirit of calling a spade a spade, it still isn’t good enough and more needs to be done. 

Why aren’t there more female founders?

There are not enough are female founders in fintech, not an opinion just a fact. But why is it that women struggle to found their own companies without a man to help them along? The short answer is, I don’t know and the long answer, well that’s a whole new kettle of fish. 

When looking at female-founded companies you’ll be hard-pressed to find one that wasn’t somehow helped along by a man—sisters are trying to do it for themselves, but systemic gender discrimination keeps getting in the way. 

Take Starling for example. Anne Boden is a pioneer in digital banking, she was the first woman to try and even attempt to set up her own bank and it wasn’t without an uphill battle.

After initially losing the entirety of her founding team, including Monzo co-founders Tom Blomfield, Jason Bates and Jonas Templestein, Boden had to start back at square one and without the same technical knowledge as her ex-co-founders.

In her book Banking On It, Boden revealed the extent to which she had to make concessions just to get back off the ground again.

Boden sold a majority stake in Starling to Bahamas-based investor Harald “Harry” McPike, who founded investment group QuantRes.

Originally only looking for a £3m boost, Boden was instead faced with a three-part £48m investment that would see McPike gain control of two-thirds of Starling. I wonder if Tom Blomfield was ever offered such a deal?

Instead, Blomfield turned to one of the most prominent female VCs in the industry, Eileen Burbidge of Passion Capital, a firm that Boden refused to work with because Passion’s co-founder Stefan Glaenzer was on the Sex Offender’s Register after he attacked a woman on the Tube. 

Now, I’m not trying to drag anyone’s name through the mud, but, I am simply asking if a man would have been backed into a corner just as a woman was and the answer is probably not.

Glass V-Ceiling 

One of the main reasons why female founders often find it so hard to get off the ground is that they just can’t access the same amount of funding that their male counterparts can.

Data from Diversity VC, in collaboration with the British Business Bank and BVCA, show that for every £1 of venture capital funding in the UK, less than one penny went to all-female founded teams. 

But why is this? Well, 83 per cent of venture capital firms have no women in their investment committees, despite the fact that about a third of the VC workforce is female.

And it’s not as if the men are better suited to the job. On average female venture capitalists are more educated than men according to Diversity VC.

Women in senior investment positions hold 1.5 degrees, compared to 1.3 for men, with ten per cent of senior women holding postgraduate research degrees, including PhDs too.

So, it’s not like we’re uneducated, it’s just that men are making decisions and I guess they want to stick to what they know.

Despite only being in the industry for a little over a year now, the distinct lack of diversity is unsurprising, yet troubling. 

As an industry that prides itself on being at the forefront of technology and democratising access to finance shouldn’t be behind when it comes to diversity. 

There needs to be more women in fintech, period. But, the distinct lack of support currently in place is hindering fintech’s chance to be world-leading and groundbreaking in something as simple as equal opportunity. 

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