Why is Diversity and Inclusion Important in Fintech? The Industry View with Finastra, NMI

This June at The Fintech Times, we’re focusing on diversity, equity and inclusion (DEI). No longer just a trending topic but an essential consideration to not only your business operations but in your offering as well, this topic feels more relevant now than ever before.

The fintech industry is known for its innovative, agile reputation, and yet it still faces a significant diversity problem that threatens to halt its growth and stop that innovation moving.

Here, we speak to key members of the fintech industry to understand the true importance of DEI and why fintechs need to embody it in everything they do.

Under-representation

Kate Hampton, chief strategy officer at embedded payments solutions provider NMI, said:

“Having worked in the technology and payments sector for almost two decades, I have gained a deep understanding of the critical importance of addressing DEI within the fintech industry. Women in the fintech industry are still significantly under-represented, especially at higher levels, and I have often found myself to be one of the few, if not the only, women in high-level meetings and discussions. I’ve had a very positive experience, supported by numerous mentors who encouraged me to dream big, however I recognise that many women in fintech do not share the same journey. That’s why it’s important to me to act as a mentor and set an example for other women in the industry.

“Fintech organisations must actively support and uplift women by creating enrichment opportunities, establishing mentorship programs, and providing a safe space for those seeking support and guidance. Advocating for women in fintech can drive meaningful change in the tech workforce, encouraging organisations to prioritise DEI efforts. This change must be championed by board members and C-suite leaders, ensuring it starts at the top. The fintech industry holds immense potential, and intentional DEI efforts will drive success for both organisations and their employees. Diversity at all levels creates undeniably better business results and success in DEI outcomes will also benefit fintech as a whole.”

The right thing

Tyler Menezes is the executive director at CodeDay, where he works to provide welcoming and diverse opportunities for under-served students to explore a future in tech.

He said: “For fintech companies, DEI isn’t just about doing the right thing – it’s also a strategic advantage. Embracing diverse perspectives can unlock new market segments.

“At CodeDay, we focus on helping students from diverse and low-income backgrounds find their place in the tech industry. Conversations with our students often reveal how different their financial experiences are from mine. For instance, about 25 per cent of low-income households don’t use traditional banking services. Many of our alumni have pursued careers in fintech, where they contribute to developing more inclusive products that attract a broader customer base.

“Most fintech products aim to serve a global and diverse audience. Teams that mirror this diversity are better positioned to understand and cater to the unique needs of various demographic groups.”

A moral imperative

Michael Bystrov, chief revenue officer at Noda, an open banking payments platform, said:

“DEI is essential for companies like Noda within the fintech sector as they drive innovation and creativity. At Noda, our team comprises individuals from all over the world, bringing a wealth of diverse perspectives that are crucial for developing innovative solutions in open banking. This global diversity allows us to better understand and meet the needs of a worldwide customer base, enhancing our competitiveness and reach.

“Additionally, an inclusive workplace boosts employee morale and engagement, leading to higher productivity and lower turnover rates, which are vital for maintaining high performance in a fast-paced industry.

“Complying with DEI helps Noda meet regulatory standards, enhancing its reputation and ability to attract partnerships, investments, and talent. Moreover, embracing DEI underscores Noda’s commitment to social responsibility, aligning with its role in promoting fair practices and contributing to a more inclusive financial ecosystem. Overall, DEI is not just a moral imperative but a strategic advantage that promotes innovation, workforce stability, and societal impact, essential for the success of any fintech company operating in today’s dynamic financial landscape.”

Finance for good

Simon Paris, CEO at financial software company Finastra said:

“A focus on DEI within fintech is crucial in helping advance finance for good, creating a world of more equal, accessible, affordable and inclusive finance.

“Open finance, underpinned by open technology and a DEI mindset and culture can transform societies, reduce biases and shape a progressive future. With fintech we can help bridge gaps to drive economic empowerment and better reach the unbanked and underbanked. It helps bring people out of poverty, for example, by creating more access to trade finance, lowering the cost of cross-border payments, reducing fraud and providing those first steps towards savings, wealth creation and financial management.

“With this type of societal change, the industry can champion more financial inclusion. By maximising digitisation and the power of connected ecosystems to transcend geographical and financial barriers, finance becomes more democratised. More people can access more banking services, whether they are in the poorer sections of society or niches with unique needs not sufficiently served by traditional banking. At the same time, with the power of open finance, the cost to serve is also reduced, making those new markets more attractive for institutions.

“We are fortunate to live in an age when finance is open. Banks and fintechs must continue to use this opportunity to work together and innovate to deliver outcomes that benefit all of society.”

Driving healthy culture

Bruce Lowthers, CEO at Paysafe said: “The best companies know the critical importance of having a diverse workforce. Study after study has highlighted the improvement in qualitative metrics for companies that encourage a healthy diverse, thinking culture. From a corporate standpoint, our obligation at Paysafe to drive a healthy culture is to provide the framework for people to feel comfortable and supported.

“When we do that through groups like our social networks, people feel comfortable throwing out ideas without worrying about how their colleagues will react to them. Creativity flourishes based upon trust and that’s when people are doing well, improving business processes, creating new products and that’s when a company is attracting outstanding talent.”

Strategy for Success

Elizabeth Hoemeke, CIO at digital payments platform, One Inc, said:

“In the fast-paced world of fintech where cutting-edge technology is key to business growth, diversity, equity, and inclusion acts as a supercharger for innovation. A diverse workforce made up of a varying set of backgrounds, experiences, and viewpoints brings fresh perspectives to the table and challenges to the status quo. This fosters creative problem-solving that allows fintech companies to tackle complex issues within the business.

“DEI has also been shown to enhance employee engagement. When individuals feel valued, respected, and empowered to contribute their ideas and opinions, they are more invested in their work. According to McKinsey, companies with strong DEI programs outperform their competitors financially because these programs improve employee morale, provide access to wider talent pools and ultimately lead to a more productive and collaborative work environment where creative ideas thrive.

“As a result DEI is not only a moral imperative but a strategy for success that strengthens the entire fintech ecosystem. However, building and sustaining DEI efforts is not a one and done initiative. It must be an ongoing process, which when not actively fostered can easily erode. A genuine commitment to DEI and actively contributing to a workplace where empowerment is felt by all is necessary for fintechs that that want to create a truly an inclusive and equitable work culture where everyone can thrive.”

Diverse teams are essential

Dr Gena Cox, organisational psychologist, executive coach, and speaker said: “The fintech industry, known for its innovative reputation, faces a significant diversity problem that threatens its ability to drive innovation, build trust, and compete globally. In the US, McKinsey reports a lack of race, ethnicity, and gender diversity at both the employee and leadership levels. The UK faces similar challenges, with women holding only 30 per cent of fintech jobs and 17 per cent of senior leadership roles, and ethnic minorities being significantly underrepresented.

“However, some fintech leaders, such as Mastercard, recognise diversity, equity, and inclusion (DEI) as a business imperative. They understand that diverse teams are essential for driving innovation, reaching underserved markets, enhancing trust, attracting top talent, ensuring regulatory compliance, and reflecting the diversity of global markets. As the industry faces increased scrutiny around fairness and inclusivity, embracing DEI is crucial for fintech to realise its transformative potential and set a new standard for inclusive finance.”