Deloitte: the fintech community must drive gender equality
The company’s own research found that only 7% of finance-based startup founders were women, and, even though the same demographic was more likely to generate higher ROI, they are still being denied equal access to opportunities.
Deloitte is of the opinion that, should this deficit be addressed, an equivalent acceleration of innovation and development to that seen following the 2007-2008 financial crisis would be the likely result, as new ideas would flood the equalised playing field.
“To make that aspiration a reality, though, three key stakeholders in the fintech ecosystem—investors, founders, and financial institutions—will have to join forces and commit to change. They will need to work together to help enable equal access to all forms of capital: human, financial, and social,” said the report.
Calls to action
With regard to these three aspects, the company advocates the following courses of action:
- Investors, particularly venture capitalists, must confront their own potential bias and evaluate propositions purely from a consideration of value. Furthermore, diversity in the VC community should be accelerated too (only 12% of decision-makers are women).
- Women founders should view the currently displaced market as an opportunity to reshape old paradigms. Alternative sources of funding, such as crowdfunding, should be explored and mentorship programmes should be fostered to encourage the next generation.
- Financial institutions themselves should encourage diversity through corporate initiatives that bring greater access to capital and advisory services. Also, choosing to partner with women-founded fintechs can have a dynamic impact on diversity generally.
As a conclusion, Deloitte reiterates that, despite its undeniably deleterious global impact, COVID-19 could actually present an opportunity for women to achieve greater levels of equality. Its reasoning is this:
“As companies aim to recover from the financial impact of the COVID-19 pandemic, they will need to run a tight ship while exploring all viable options for growth. This should include investing in women entrepreneurs, who have proven themselves to be as capital-efficient and capable of generating high returns as are men, if not more so.”
Celebrating women in finance
As this exciting industry continues to shift in these challenging times, we will continue to report on the benefits that increased diversity is bringing to it.
The FinTech Show: Bitcoin, crypto mining, and payments
In episode six of the FinTech Show (originally broadcast live on 11 June at 2pm BST), Scott Birch and Will Girling discuss:
- El Salvador becoming the first country to make Bitcoin legal tender
- China's decision to clamp down on crypto mining operations
- The new developments in post-COVID payments, including the EU's decision to give every citizen a digital wallet
We also explore the newly released June '21 edition of FinTech Magazine, including a special look at our profile piece on HOOPP and the future of small business lending (guided by iwoca). Special thanks go to Valeria Simantob for providing the front cover of that issue.
Before you go! Follow us on LinkedIn and make sure to tune in on 25 June for the next FinTech Show.