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Behind the scenes of FinTech: superficial diversity

With its sorry superficial diversity, FinTech could well set back the entire finance industry’s efforts to close the gender gap.


Diversity: a $700 billion market

According to investment fund Digital Horizons, which has invested in InsurTech firms Cuvva and Lemonade, the financial services industry is missing out on $700 billion dollars of revenue every year by failing to meet the specific needs (either adequately or at all) of half the human race.
The fund makes the disheartening observation that women fall outside the financial industry’s preferred target audience in the investment, savings and deposit segments.
One might therefore logically expect to see FinTech firms attacking this incredible opportunity by using their ability to offer hyper-personalised banking services to cater for the needs of women. Except that the male-dominated FinTech segment is currently utterly incapable of doing so.

A regrettable family resemblance

If you’re not convinced, just have a look at some photos of founders and leaders of global FinTech firms and you’ll realise – very quickly – that there is a distinct shortage of women.
In 2018, out of 150 speakers at the Paris Fintech Forum, 92% were men. Two years later in 2020, the Paris Fintech Forum patted itself on the back for giving more prominence to female entrepreneurs… but continued to field all-male panels. All eyes will thus be on the 2021 event, which may perhaps also represent a shift in terms of debate and expertise.

The simplistic argument: FinTech is part of tech

One oft-quoted reason for the shortage of women in the FinTech sector is that its technological nature puts women off.
While no one is disputing the fact that women are, for the time being, significantly under-represented in the tech sector, this argument, parroted by the male-dominated world of FinTech, is, in my opinion, highly questionable.
The majority of the FinTech firms that have emerged in the last ten years are companies that have taken on the task of revolutionising behaviours. To argue that they are purely tech companies in the service of finance is simplistic, not to say spurious; above all, it is disempowering and does not come close to meeting the challenges facing the industry.
No, the main reason lies elsewhere.

FinTech is not boosting diversity

A report published by the British Business Bank – the United Kingdom’s public economic development bank – reveals that for every pound of venture capital invested, just one penny goes to start-ups founded by all-female teams, while ten pence goes to fledgling companies founded by mixed-sex teams and the remaining 89 pence to those founded by all-male teams.
Cynics will find further grist for their mills in recent statistics published by consulting firm Deloitte showing that start-ups founded by women – added to those co-founded with men – accounted for 12.2% of the 3,017 FinTech firms counted by the firm in 2019 (compared with 10.9% in 2010). However, when you count only those firms founded by all-female teams, this percentage falls to a pitiful 3.1%.

Investment funds need more women

The reason these statistics are not rising is linked to the small number of women in key roles at investment funds.
Unless and until these funds include more women in management positions, there is every chance that we will not see an increase in the number of women in senior roles in the New Finance. Some initiatives (such as FinTecHer in France, sponsored by non-profit organisation France Fintech) and collectives of female entrepreneurs (e.g. Sista in France) are working to an ambitious roadmap designed to shake things up. But such initiatives are few and far between. Geographically confined, they receive little feedback and struggle to coordinate their activities at the international level.
Unfortunately, this situation is not unique to the FinTech sector. According to Astia, an investment fund committed to supporting businesses set up by women, in 2020 a mere 2% of the world’s venture capital funding went to businesses run by women and only 9% went to businesses whose leaders included women.

The gender equality index: an opportunity for France

For French FinTech firms keen to do better, the gender equality index is an opportunity.
Companies with 50 or more employees must now calculate their gender equality scores and post them on their websites by 1 March every year. The 100-point index, mainly aimed at eliminating the gender pay gap, is a good indicator of whether fast-growing FinTech firms are mature enough to shoulder their social responsibility.

While I have not been able to find scores for pioneering companies like Lydia and October, which perhaps have not yet breached the 50-employee threshold, Qonto and Younited Credit are both playing the transparency game. Qonto is setting an example with a score of 83. Conversely, Younited Credit, with a score of 73 out of 100, must take corrective action to achieve at least 75 points within three years. These two iconic FinTech firms from the French ecosystem say they are ready to take up the challenge and scale new heights.

Fair enough, but for FinTech firms, this index is primarily seen as a tool to aid recruitment in an ultracompetitive environment. To find any mention of it, you have to visit the “Careers” pages of their websites – which just goes to show that gender equality is mainly seen as an issue of employer branding.


Romain Liquard, Group Economic Studies

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