Gemma Young, founder of DiversiTech Hub

FinTech“You are not investable”. That’s the argument I heard as a mum of four kids looking for funding for a Fintech, despite having 17 years of experience in IT banking.

I am not the first person who will be denied funding or a promotion because I don’t fit the stereotype and I will not be the last. Unfortunately, the FinTech industry is suffering from a big problem, bias.

The bias heritage of FinTech 

Albeit a relatively new sector, FinTech has its heritage in two industries: finance and tech. As one of the fastest-growing industries in the UK, it has managed to gather some of the best features in both – deploying AI to simplify what was bureaucratic and impersonal in traditional banking, for instance – but it also inherited the lack of diversity. Tech is slowly making progress in its efforts to rectify the lack of equality, but is nowhere near close to parity. Financial services face similar issues. Although there might be a lack of it, no one disputes it’s importance, 80% of CEOs interviewed by PwC recognize diversity as a key factor in new hires, to enhance business performance and strengthen brand and reputation.

In regards to where FinTechs stand, according to the 2019 edition of the EY UK FinTech Census, only 25% of businesses have at least one female co-founder, and the gender ratio is 70.5% male to 29.5% female employees. Compared to the first edition, from 2017, these numbers have barely changed. The issue is clear.

Bias is everywhere 

Bias isn’t just something that lives in boardrooms, it is now permeating the technology the industry uses. As financial services become increasingly digital, AI is opening doors we never thought possible. FinTechs investing in artificial intelligence are able to eliminate human error in banking procedures and understand and adapt to customer demands in unique ways. This rapid transformation also brought a new concern to the market: could the AI we deploy also be biased? When it involves personal data such as credit and payments history, decisions misguided by AI bias can be especially damaging. A FinTech that preaches diversity and financial inclusion could deny services to minority groups or have systems that favour the privileged without ever realising.

As a McKinsey study points out, AI can help reduce human bias, but it can also bake in and scale the bias we have. Unconscious bias is especially hard to identify once it affects artificial intelligence because leaders can spend their entire careers without ever realising they are making decisions based on them. When it comes to diversity, organisations must first tackle their own unconscious behaviours and patterns.

Take action, don’t just talk about it

Everyone is well versed in talking the talk, but if the sector wants to embrace diversity and inclusion for good, and stop AI from perpetuating decades-old bias, businesses need to walk the walk. The path towards more diversity is easier than you think, and its benefits go far beyond brand recognition. Gender and ethnic diversity in the workplace have proven to be correlated with profitability, especially when it reaches executive roles.

Business leaders in FinTech need to start hiring and promoting minority executives so that junior employees have mentors to encourage them, and supporting STEM programmes to bring new, more diverse talent to FinTechs. Even smaller steps, like showcasing an organisation’s support of inclusion in job opening websites can help encourage diversity in applications for FinTech roles.

Tackling the FinTech diversity bias will be critical not just for the social impact, but for the sustainable growth of the entire sector – and the time to make it a priority and act is now.

Gemma Young About the author

Gemma Young is the founder of DiversiTech Hub, a network of FinTech organisations promoting diversity and inclusion in the FinTech industry. Learn more about the Hub at https://www.diversitech-hub.com/.