6 Stereotypes About Fintech Leaders That Aren't (Always) True

The term ‘FinTech’ was coined in the 1980s. Since then, it has evolved into a thriving industry, with an estimated 86% of UK consumers using FinTech processes and solutions.

As with many emerging industries, the popularity of FinTech has led to certain misconceptions about start-ups and their founders.

In this article, we explore the 6 most common stereotypes about FinTech leaders and why they often don't hold true.

1. They Are Male

Although the financial services and technology sectors are often seen as male-dominated, many prominent female leaders are making significant impacts in FinTech.

For instance, Natasha Bansgopaul, Co-founder of DarcMatter, a research and networking platform for investors and fund managers, has grown their user base by over 60% and won a bronze award for Company of the Year.

Other notable UK-based female FinTech leaders include Urenna Okonkwo, founder of Cashmere, and Francesca Hodgson, co-founder of GoodBox.

2. They Are Tech-Minded

Successful innovations require thinking that extends beyond technology. Experts from Harvard note that the most successful FinTechs today aren’t just about cutting-edge tech; they use existing technology to drive social change.

Application Programming Interfaces (APIs) have been utilised for years, yet they are the core technology behind many recent advances in mobile banking and payment processing. FinTech companies leveraging APIs include TransferWise and Betterment.

3. They Are Young

According to MIT’s Tracy Mayor, when you think of FinTech, you might imagine young professionals trading stocks, using payment apps, and securing mortgages online.

However, this perception doesn’t match reality. Research by the Digital Banking Report shows that the average age of FinTech leaders is around 46, older than employees at many other tech firms.

4. They Aim To Remove Traditional Banks

While FinTech is often seen as a threat to traditional banks, many leaders understand that collaboration is key.

In fact, FinTechs and banks are increasingly working together. FinTechs benefit from banks' regulatory and structural frameworks, while banks partner with FinTechs to keep up with digital transformation.

In the US, 71% of bank executives are interested in or already partnering with FinTech firms for digital account opening.

Additionally, 47% seek partnerships for fraud and risk management, 41% for mobile wallet capabilities, and 33% for data breach and ID protection services.

5. They Are Untrustworthy

Despite traditional banks being more commonly used, trust in FinTech firms has grown significantly over the past decade.

One study found that although only 23% of respondents actively trust FinTech companies, 48% are neutral on the subject. This ambivalence offers an opportunity for FinTechs to increase awareness and build trust.

Akarsh Sanghi, an engineer and designer, emphasises the importance of integrity and empathy in managing other people's money. Leaders who embody these qualities and remain transparent about their goals are crucial for growth.

6. They Are All About The Money

While FinTech firms often focus on financial management like payment processing and online banking, the sector is much broader.

There are various sub-sectors within FinTech, each addressing different needs, such as:

• Security: Including authentication, encryption, and secure messaging capabilities, for example, Mailock.
• Insurance: Including underwriting and claims processing, for example, Cytora.
• Investment management: Including robo-advisers, automated brokers, and micro-investment networks, for example, Kensho.

References:

FinTech: The History and Future of Financial Technology, The Payments Association

UK FinTech Adoption Report, Digit.fyi

Meet the Women Founders Leading the FinTech Revolution, The Stack World

Five Important Trends in FinTech and What They Mean for You, Harvard Professional Development

FinTech Explained, MIT Sloan

Tech FinTech Age Comparison Study, The Financial Brand

Interest of Banks in FinTech Partnerships, Statista

FinTech Trust and Awareness, Morning Consult

Akarsh Sanghi: FinTech Leader, Silicon Republic

9 Most Common Myths and Misconceptions About FinTech, dashdevs

Reviewed By:

Sabrina McClune, 19.06.24

Sam Kendall, 19.06.24