A few weeks ago, I was invited to speak at an event called Women Techmakers, an event in Barcelona, and part of a Google initiative to provide visibility, community, and resources for women in technology. While preparing my speech (and after listening to other women driving this initiative), I have become much more aware of the necessity to bring more female talent to the tech world, and especially to encourage women to join the fintech race. The main reason is because of the giant contradiction I see in fintech, that while 80% of household spending and financial management decisions are taken by women, only 7% of fintech organizations employ female executives.
What is fintech’s mission?
Fintech is a new way of delivering financial services using technology. Either by serving customers directly (B2C) or by providing banks with innovative white label solutions (B2B), fintech companies strive to create a more transparent and engaging user experience while dealing with finances. This can be anything from exchanging currency (think TransferWise), to making payments with mobile wallets or managing personal finances.
In order to deliver that superior customer experience, you would start with identifying your end-user and figuring out their customer journey. During the first steps of this research, you would discover some interesting stats:
- Women make or influence up to 80% of household buying decisions worldwide.
- 73% of women globally report dissatisfaction with their banking services.
- HBR found that the most lucrative business opportunities arise at life transition points or milestones such as marriage, divorce, childbirth, and a job change, because women are most likely to make significant investment decisions around such events.
- 80% of women-owned small and medium enterprises with credit needs are unserved or underserved, according to the Global Banking Alliance for Women.
Apart from the research, think about who in your family would plan for the holidays and gradually put some money away, making sure there’s enough budget for the whole family, or decide how much to spend on weekly grocery shopping, search and ask around to find a cheaper service to make currency exchange, or compare different banks in search of a higher deposit rate? I guess you will think first of your mum, sister or yourself (if you’re a woman). In my case, my mother immediately comes to mind (dad would never bother!).
The fintech contradiction
It’s clear that there’s a large percentage of female fintech users. Let’s dive into the composition of the teams that design, develop and communicate about these new products. You may be surprised (or not) that the dominant part are men, and that also goes for tech in general: the 2016 Stack Overflow Developer Survey reported a ‘dramatic’, ‘shameful’ gender disparity between men and women in tech, with 93% of more than 50,000 respondents being male.
Women are also underrepresented within executive talent pools. Of the 100 fintech companies that raised venture capital funding in Europe in 2015, only five had female chief executives, and of their total 364 key executives, only 7% were women, according to an FN analysis of Dow Jones Venture Source and Factiva data.
As one fintech journalist points out: “Spend enough time on the fintech conference circuit and you are likely to grow used to the sector’s idiosyncratic male-only panels, sea of suits and longer queues in front of the men’s restrooms.” I can totally verify this observation, as I attend a banking conference like that at least once a month.
All of this demonstrates the inherent contradiction within the fintech mission. If the objective is to revolutionize the financial services industry and to better understand and serve customer needs (which, as we’ve seen, are largely held by women), then shouldn’t those that create these products and services involve women at all stages? Yes. Because we have a lot to contribute to any organization, be it a startup or an established company, especially in the fintech sector.
What she brings to the table
I would highlight the following three added values of female talent:
- Deeper understanding of customer insights. Besides the fact that women can bring in more accurate insight into what our female peers may need, or how they behave when dealing with finances, we also tend to have a more holistic, 360º view on things. According to US consultant Jane Curtis, a woman takes into account nine more factors than a man when making a decision. This could be to our disadvantage when choosing from a menu, but it definitely gives us an edge in analyzing customer behavior.
- Collaborative spirit. Women tend to be good team players. When we strongly believe in a course of action, we see the initiative all the way through. We often go beyond our direct responsibilities striving to achieve common well-being. Here at Strands, it’s mainly girls who organize corporate team-building events, hackathons, and so on, which our male peers tend to enjoy very much.
- Different leadership style: cause-driven consensus and not just financial benefit. According to a recent study by Daniel Goleman (author of Emotional Intelligence), the most effective leaders are not those with a higher IQ, but with elevated emotional intelligence abilities. Women tend to score higher on conflict management and teamwork, empathy and organizational awareness, and adaptability. I also found a great comparison of leadership styles between men and women in the book Ellas deciden by Gemma Cernuda. What resonated most with me are the following three contrasts Cernuda draws:
- He is structured, she is intuitive
- He wants his way, she wants the best way
- He looks for status, she looks for strong relationships.
And most importantly for shareholders, gender diversity has a direct financial correlation. McKinsey recently found a 15% increase in financial returns above their national industry median for companies with higher gender diversity leadership numbers. The study also noted that this financial impact isn’t realized ‘until women constitute at least 22% of a senior executive team’.
Making femtech real
This can only become a reality when employers (mainly male) understand our value and create flexible working policies. The good news is that a gradual shift in this direction is already happening. At Strands, I can definitely see this being put into practice.
Also, a few days ago while at a banking conference in Singapore, I had an engaging conversation with two banking leaders from two different continents: Mr Jay Sidhu (CEO of Customers Bank & Bank Mobile in the US – served in the board of directors of Santander) and Mrs Kim Downs from Australia (innovation leader at ANZ). They shared their insights on something they noticed: as more women take leadership positions, those companies introduce more flexible policies for women and men when the time to have kids arrives.
Jay said: “Whereas before, when companies were interviewing a woman in her late 20s or early 30s, the first thing they would think was, Watch out, in a few years she is going to be pregnant and all the investment in her is going to be wasted. Now, more and more companies are shifting away from this macho prejudice. If a women has the right skills and experience, great – join us and when you need time to take care of your kids, it’s OK, we will be waiting for you to come back when you’re ready.
This is very promising, especially coming from a man who has been in the traditional banking industry for many years, and who is building a totally revolutionary banking model with fast growth projections, hence an employer for many women and men.
All this analysis and personal experience has made me strongly passionate about the femtech movement. Here is my CTA to women: get more involved in fintech, be more confident and demonstrate your value with great results!