Bitcoin, disruption and women in fintech…
There is a lack of women in fintech and the problem has not been addressed yet. This imbalance has occurred for a number of reasons. One is that the industry can seem impenetrable to outsiders.
The word ‘fintech’ sounds quite scary. It’s probably because of the combination of finance and technology. They’re both industries that feel shrouded in mystery, and thrive on the trade of information guarded fiercely by insiders.
It doesn’t help that there are multiple definitions of fintech. Investopedia describes it as:
“Any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.”
The financial industry is now a digital industry, just like almost every other area of business.
There are two sides to the fintech revolution. One involves governmental or business initiatives that push at the boundaries of innovation. The other revolves around disruptive alternatives to what many see as a corrupt financial sector.
Fintech as societal change
Fintech can sound like a remote concept, but it is already creating huge changes in our daily lives. First, there is the growing number of alternatives to traditional banks, which the internet has disrupted.
Most people consider using online banking standard practice. We can now pay for lots of things using contactless technology in our bank cards, or even using our mobile phones. Many people have used PayPal to pay for products and services online.
Bitcoin has also been touted as threatening the traditional dominance of high street banks.
Fintech as disruption: bitcoin
Blockstream’s Eric Martindale has said:
Bitcoin is one of the most significant innovations of our time.
The internet has enabled the first digital currency, bitcoin, involving only peer-to-peer transfer based on blockchain technology, to grow rapidly. Before the rise of the internet, any real change in the banking industry would have seemed impossible.
Financial institutions played a big role in the 2008 financial crisis and subsequent recession. This catastrophe left many people disillusioned with the banking industry. The appetite is big for alternative financial services.
People want to be free of being forced to use banks as intermediaries for financial services, as well as for other reasons. International transfers can be costly, for example.
Bitcoin is plagued by its reputation of being associated with criminal activity, which is one reason why many consumers outside of the tech sector have been slow to take up the digital currency.
Some companies dealing in bitcoin offer to pay their employees in the cryptocurrency. Bitcoin has not become widespread yet, but there are some hipster cafés that already take payment in bitcoin.
Liverpool actually has a digital currency called the Liverpool Local Pound. You can download the Colu app and use it to buy from lots of independent businesses, keeping money within the local economy and strengthening your community. It only launched very recently, so now is the time to get in there early!
Fintech startups and the banking industry
It’s understandable that traditional banks have struggled to keep up with the fast pace of technological change. Legislation for data protection on information held by banks is very strict.
It can also be difficult for fintech startups to access the data they need to build their operations because of the need for consumers to remain private.
Many banks are jumping on the startup bandwagon, and partnering with companies that can operate under more agile business models without being constrained by legacy systems (older technologies that it would be costly and lengthy to integrate with new technology).
It’s time for banks to embrace the technological revolution and put customers first, following the startup model.
Women in fintech
It’s typical for men to dominate new technologies. In tech, women have often stuck to more obviously ‘people-related’ areas like marketing, but the truth is there’s no reason for them not to get involved in more technical roles.
In the emerging fintech industry, girls and women must take their places as leaders now to help shape it and give it direction. It’s important to educate them so they understand that fintech is an exciting field for women to work in.
At the moment, fintech boards are made up of only 7% women, while only one of the top 50 EU fintech startups of 2016 was led by a woman.
The problem is partly due to gender stereotyping. Women can often lack confidence in areas like finance and technology because our society reinforces them as masculine fields.
With a lack of women already working in the financial sector, few female professionals possess the critical experience and insider knowledge needed to progress in fintech.
Written by Catherine Heath