Toward a more inclusive fintech industry
I worked for seven years in a company run exclusively by men — no women on the leadership team at all. The executive suite was physically walled off, a literal boys’ club, and no matter how valuable my performance, I wasn’t going to be a “cultural fit” for the all-male back room. Even now, 84% of venture-backed companies lack even a single female founder.
Significant, rigorous research proves women in leadership make companies more profitable, and diverse leadership teams make better business decisions. Diversity must be about more than bolstering, or balancing, the decision-making of male-dominated leadership teams. Finance and tech’s “default setting” of male dominance requires that we be intentional about inclusivity.
Much of the gender disparity in fintech is attributable to “mirror-tocracy” — the tendency of white-male-dominated industries to reward and invest in other white-male-dominated businesses. We feel more comfortable with and trusting of people who look like us and business models we understand well. Those biases result in an inefficient distribution of investment and resources.
Why are finance and tech startups so far behind on such an obvious win-win? How can fintech, with its drive toward efficiency and profitability, seize the potential benefits of gender-balanced leadership?
See the recent Most Powerful Women rankings:
As a female fintech founder, I feel a strong responsibility to those who come after me to promote policies and products that minimize the distortions of bias and proactively pursue inclusion. In every aspect of our industry — from building inclusive products to decision-makers actively making inclusive decisions — we can ensure this situation isn’t one future generations have to endure.
We need inclusive products. Machine learning and other data-driven assessments — provided they are stocked with unbiased information — press us toward meritocracy. Our systems and services should be intentionally designed to be as “blind” and bias-free as possible. Fintechs should be wary of historical data that may contain baked-in bias: Professional women and female-owned businesses may struggle to catch up even decades after discriminatory policies change. We must take precautions to avoid perpetuating biases in our use of data.
We need inclusive decision-makers. Female perspective at every stage of the development process for fintech tools will increase their utility and relevance. It’s encouraging to see an increasing number of early-stage funds prioritizing lending to companies with female founders, including MergeLane, Valor Ventures, Fierce Capital, Felicis Ventures and the Female Founders Fund. Fintech products developed by and with women are likely to anticipate the needs of female end-users, allowing more women to bridge the gender gaps in investment, retirement, economic outcomes and shift the perception of entire generations. Every leadership team and C-suite needn’t be half women, but an all-female board should be as unremarkable as an all-male one.
We need inclusive policies. Institutional policies of transparency and open-door meetings offer all employees the opportunity to participate and improve gender representation. Diligent documentation and an appeals process provide the foundation for a data-driven meritocracy. Gender should never be the sole qualifier or disqualifier for leadership positions, but our industry must provide bias-blind advancement so anyone — especially those traditionally overlooked — can prove themselves objectively valuable.
Advancing fintech’s differentiators of innovation requires and inevitably leads to the increasing visibility of women in leadership. Improving diversity on executive teams is a good start for making changes in the industry, but it can’t stop there. Women in fintech must advocate for inclusion not just for leadership, but for each employee and end user of fintech products. The future of fintech isn’t female — it’s bias-blind.
Kathryn Petralia's BankThink post is part of a series that also features Keith Mestrich, the chief executive of Amalgamated Bank; H. Rodgin Cohen, senior chairman at the law firm Sullivan & Cromwell; LeeAnne Linderman, a former executive vice president at Zions Bancorp.; and Bob Jones, the CEO of Old National Bank.