Fintech trends and the benefits of diversity in 2023

As part of our ‘Women in Fintech’ series, we interviewed two leading female executives about their role in Fintech, why they were inspired to work in finance, and who they find the industry to be in terms of inclusion, acceptance and encouragement.

Marie Downes is Chief Talent Officer at Adaptive Financial Consulting and Ying Cao is co-founder at Work in Fintech.

Tell us about your role and your company

Marie Downes: I’m Marie Downes, Chief Talent Officer at Adaptive Financial Consulting (‘Adaptive’) and have been with the company largely since its inception ten years ago. I have spent most of my career working in the fintech space and have witnessed the evolution of the industry, including most recently, the evolution of working time trends accelerated by the pandemic.

Adaptive builds and operates custom trading systems across asset classes for financial services firms that want to own their technology to differentiate and compete over the long term.

Ying Cao: I am a co-founder of Work in Fintech. Work in Fintech is an EdTech platform with a mission to inspire young professionals to a career in fintech and web3 regardless of gender, race or background. Before co-founding WIF with my partner Matt Cheung, I spent nearly 20 years on Wall Street driving digital transformation and fintech investments in global markets, seeing first-hand how the industry had evolved and benefited from a more diverse workforce and the talent gap that still exists. As a China-born immigrant and a business leader turned entrepreneur, creating a more diverse and democratized future in the fast-growing FinTech industry is close to my heart.

What trend has had the biggest impact on driving diversity in fintech in the past year?

Marie Downes: There are two trends that resonate. One is the realization that we can actually influence the number of women entering the fintech sphere. It doesn’t just start with having women as part of the interview team for female candidates or visible women in management (although they help); we can actually work at the grassroots level to encourage entry into technology degrees, apprenticeships, coding schools and the like. It’s really about understanding that we can make a bigger difference than we think by mobilizing our resources and working with schools, charities and higher education institutions to push for change.

The second is the increase in flexibility as a result of the pandemic. Despite many advances, women generally still pick up the slack when it comes to childcare, elderly care etc. and for some a demanding role in fintech was not a reality as it would be completely incompatible with these responsibilities. As more and more firms adopt policies to work from home, this barrier to entry and advancement has begun to erode, and so more women are interested in and open to working in fintech, as it is increasingly compatible with others commitments. A 2022 McKinsey report concluded that women are 10% more likely than men to leave a role if hybrid work is not available.

Ying Cao: There are many angles to diversity, such as age, gender, race, sexual orientation, etc. Given the increased use of digital banking and fintech services among the younger generation, we see that more young people enter and build a firm track in Fintech vs. traditional finance. The increased focus on technology and hard skills jobs in the fintech industry is also creating more opportunities for people from different races and backgrounds to join the relatively new and innovative sector. The global pandemic is also fueling the rise of telecommuting, creating a more level playing field for workers from diverse backgrounds to take part in FinTech. But with the large layoff, there is a wider gap for gender diversity with one in four women – compared to one in eight men – citing childcare as a reason for unemployment during the pandemic.

Which areas of fintech are seeing the biggest increase in female leadership and interest – and why?

Marie Downes: Interestingly, it is female fintechs that attract more female workers and managers. Visibility is clearly hugely important in terms of greater gender diversity.

Our own experience at Adaptive is that we are seeing an increasing number of female applicants to our early career program, which is an intense technical training program, so I would say that coding is seeing an upward trend. We believe this is due to a number of factors, including the fact that we strive to make Adaptive a more inclusive place – for example through our annual DE&I festival to educate our colleagues and challenge inherent bias – and that we break down barriers to entry – no degree is required for our early career program candidates; interviewers are looking for potential as opposed to completing a tick box exercise. These actions send the message to the candidates that we are an inclusive, welcoming organization where cultural additions are valued over cultural adaptation.

Ying Cao: The IMF published a working document in 2022 and concluded that women represent less than 10 percent of management – ​​both as founders and as members of the boards of fintech firms. The proportion of women in management positions is even lower than in traditional banking and technology companies. This is consistent with what we have observed in the fintech market in recent years.

In general, you will see more women taking leadership roles in more mature and established FinTech companies and the fledgling smaller startups. The former is largely due to the board’s focus on diversity measurements, and the latter is influenced by the fact that more women are inspired to become entrepreneurs and take on an entrepreneurial career that they just started in the workplace. And this is also strongly influenced by the generation’s digital competence and increased use of social media platforms among GenZ.

Which areas of fintech do not attract women – and how can this be resolved?

Marie Downes: Unfortunately, most areas of fintech are struggling to attract women – there is a lack of women in leadership positions, and unfortunately there is still the problem of presenteeism, and the “badge” associated with night walkers which, for women with caring responsibilities, can be a barrier to entry.

There are some simple “wins” that can make fintech employers more attractive to women with simple actions like writing job ads in a more neutral tone, i.e. not putting women off applying by using words like “rockstar”, “ninja” , “guru”. ‘ etc. However, this needs to be combined with analysis and development of the company culture to ensure that it is indeed a workplace that is welcoming and supportive of women.

Ying Cao: Sixteen women in the world are the sole founders of over 1,000 of the best-funded fintech companies. This is a shockingly low number, especially considering that 42% of all entrepreneurs are women. This is a top-down problem. Female founders, compared to male founders, are less likely to receive funding or additional funding even when they have similar ideas, largely due to unconscious bias.

And this problem at the top creates a trickle-down effect across the organisations. The discussion around this topic has lasted for years and little progress has been made. Dialogue alone is apparently not enough. Actions and accountability must happen to make real and lasting change. The good news is that there are more VCs focusing on female founders and more companies investing in D&I initiatives as they see adding more women to leadership ranks as not just a moral decision, but a business one as well.