How the fintech and blockchain industry can tackle its gender imbalance

AltFi asks R3’s Chief Economist Alisa DiCaprio five questions about improving fintech’s gender bias problem.

Image source: Pexels/Alexander Suhorucov

With fintech’s two components – finance and technology – both being male-dominated industries, it’s not surprising that fintech has a gender bias problem, with women making up just 11 percent of all board members and 19 percent of company executives.

With this in mind, AltFi asks R3’s Chief Economist Alisa DiCaprio, a former chair of the Fintech Committee at the US Department of Commerce and co-chair of the Commercialization Working Group at the International Chamber of Commerce, how she began her career and how the industry can encourage greater representation of female leaders.

Q1. How did you first become interested in starting a career in fintech?

“Economics was always a focus for me. I studied it as an undergraduate and graduate. My particular interest was international economics because the intricacies of how global systems return to balance after a shock fascinated me. This led to a number of economic research roles in some of the best global financial institutions throughout my career, where I gained real insight into the way our financial systems worked.”

“What then made me particularly interested in fintech was the digital transformation in banking that followed the global financial crisis in 2008. In the aftermath, international banks experienced a cascade of new regulations that no bank would have had the capacity to comply with effectively without moving away from paper-based processing. In the early 2010s, when I was working as a trade economist, this digitization was happening at a pace we had never seen before.”

“At the time, I was responsible for calculating the global trade finance gap for the Asian Development Bank and the International Chamber of Commerce. Fintech was just beginning to emerge as a possible solution to financial inclusion issues among SMEs. In addition, we expected the banks would increase their lending to these firms as digitization reduced the cost of compliance. We saw interventions, but progress was slow.”

“Then blockchain came along and it was the first time I saw a completely new solution being proposed to fund the companies that were left behind. I was fascinated by the potential, and continue to be fascinated, especially now that we’re witnessing all the industries that are trying to meet further demand in the new Web3 era.”

Q2. How has gender diversity improved in fintech over the past decade?

“There is certainly a greater recognition today that diversity is an important part of every team. This is a positive development that we should be proud of – but it’s also not enough to simply strive for something, and the data shows us just that .”

“Take venture funding, for example, which most fintechs use. The share going to women-led firms is still only single digits in 2023! To be specific, in 2022 companies founded entirely by women received only 2 percent of total capital invested in venture- backed start-ups in the US. Similarly, in the UK from 2021, women-led fintechs account for just 4 per cent of total investment in UK fintechs. While funding for women-led firms is increasing, this shows the distance we still have to go.”

Q3. What are the main challenges female leaders continue to face in fintech?

“The number one challenge for women leaders in fintech is the constant need to demonstrate perfection. The women leaders we have in fintech are high achievers, extremely productive, well networked and effective. Male leaders are allowed to have more variety. Female leaders should need not to be outstanding to become leaders.”

“Another challenge is the ever-emerging networks among women in the workplace. This is a long-term problem as these networks grow over time. Until there is a deep pipeline of women who are leaders and managers and leaders of organizations there will still be a lot of demand to climb and not enough steps. The Web3 space is building many of these steps with more women entering tech and tech-adjacent industries. This will give everyone more opportunities to prove their excellence without pressure to be something else or more than their already talented selves.”

Q4. How can the industry encourage greater representation of female managers?

“I have a paper that will be published soon that looks at the reasons for the relative absence of female leaders of multilateral institutions (beyond the few superstars we can all name). In that paper we find two things that also apply to fintech. First, the applicant pool to management positions often include only one or two women. We need to start by gathering wider and more representative applicant pools.”

“Secondly, having a female leader once does not often lead to more female leaders in future rounds. Greater representation is something we must constantly work on – and the responsibility to do so should not always and solely fall to the women in these leadership roles. . This is an effort that must be consciously and actively cultivated at institutional level.”

Q5. What advice would you give to your younger self at the start of your career?

“I want to give advice that applies to all genders. The most important thing you can do is take ownership of your work. If something is difficult, don’t wait for someone else to solve it – try it yourself. This is the kind of mindset innovative industries as fintech expects. Companies working in the Web3 space are disruptive by design. They don’t assume that just because something has always existed one way, it must continue.”

“Another important piece of advice is that the industry will constantly change because of the competitive environment it’s in. You have to be ready to embrace and embrace change to make the most of the opportunities that come your way.”