Remaking traditions to reinvent industries
Many businesses strive to be innovative. The reason, as an MIT Sloan Review outlined, is straightforward: the more ideas a company generates, the faster they grow. Innovation is the gateway to the creation of new economies, services, models and products, and those companies that can successfully exploit these new ideas are bound for success.
Yet innovation is hard. It requires a culture, systems and processes that not only support dynamic change, but actively embrace it, that seek out new ways to work, to upend old processes.
Creating the right environment
How do businesses create that sort of environment, where ideas can flourish, and innovation delivers results? According to McKinsey & Company, the answer is simple: with diverse leadership teams. The study outlines that “companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians.”
This is because having greater diversity across cultures, genders and abilities means more perspectives and a broader range of experiences from which to generate ideas. And, in the words of the McKinsey study, diverse businesses “are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns.”
For a sector like fintech, continuing to be innovative is important. The whole industry is focused on finding innovative ways of delivering services and products in traditionally rigid finance, and there is significant scope for that.
Take payments, for example. With everything from reinventing how small businesses take payments, to paying freelancers quickly, or providing innovators with new ways of building their platforms, it is a part of the sector that runs the full gamut of users, customers and services. Provided by companies like Divido, Paid and Paybase, the services are changing how both organisations and individuals make and take payments, with innovation at their core.
Missing the opportunity?
Yet at the same time, this all sits in the context of finance and technology – two industries that are less diverse than others.
It is perhaps unsurprising therefore that women currently account for less than a third of UK fintech employees, according to a New Statesman article, dropping to 17% of executive roles. To take it further, Innovate Finance says that just 3% of venture capital funding for fintechs went to female founders.
There are a number of reasons why that is the case, from structural issues relating to education and perceived career choices, to ingrained cultural challenges.
It is also true that having a gender diverse company is not the sole route to innovation. However, the data continually suggests that to not address these issues is a huge error. Fintechs with female leadership delivered notably higher Internal Rate of Return from the latest funding rounds than other businesses of a similar age. Those diverse companies are creating value as they grow, making money by innovating.
Taking the right steps forward
Things are changing. Accenture recently announced that it had welcomed 50% more female founders to its eighth Fintech Innovation Lab, helping pave the way for future industry leaders.
Then there are those already helping to remake the sector. From Clare Gambardella, Chief Customer Officer at Zopa, Cordelia Kafetz, Head of the Bank of England’s Fintech Hub, Devie Mohan, co-founder and CEO at Burnmark, Monzo’s CTO Meri Williams to Charlotte Crosswell, CEO at Innovate Finance and Anne Boden, founder and CEO at Starling Bank, some of the leading and most influential brands in fintech include women in their leadership teams.
Diversity and innovation – together
If fintech as an industry is serious about continuing to innovate, to push the boundaries of what is possible and use the power of technology to have a real impact on people’s lives, then having diverse leaders and companies is critical.What we know is this: the companies that are inclusive and innovative, will continue to lead the charge. They are the future unicorns and industry titans of tomorrow.
By Paybase CEO, Anna Tsyupko