By Alisa DiCaprio on Wednesday 8 March 2023
AltFi asks five questions to R3’S chief economist Alisa DiCaprio on improving fintech’s gender bias problem.
With fintech’s two components – finance and tech – both being male-dominated industries, it is unsurprising that fintech has a gender bias problem, with women making up only 11 per cent of all board members and 19 per cent of company executives.
With this in mind, AltFi asks R3’s chief economist Alisa DiCaprio, a former Chair of the Fintech Committee at the US Department of Commerce and co-Chair of the Commercialisation Working Group at the International Chamber of Commerce, how she began her career and how the industry can encourage greater representation of female leaders.
Q1. How did you first gain an interest in beginning a career in fintech?
"Economics was always a focus for me. I studied it as an undergraduate and graduate. My particular interest was international economics because the intricacies of how global systems return to balance after a shock fascinated me. This led to a range of economics research roles in some of the top global financial institutions throughout my career where I got real insights into the way our financial systems worked."
"What then got me interested in fintech in particular was the digital transformation in banking that followed the 2008 global financial crisis. In the aftermath, international banks experienced a cascade of new regulations that no bank would have had the capacity to efficiently comply with without moving away from paper-based processing. By the early 2010s, when I was working as a trade economist, this digitisation was happening at a pace we'd never seen before."
"At that time, I was responsible for calculating the global trade finance gap for the Asian Development Bank and the International Chamber of Commerce. Fintech was just starting to come up as a possible solution to financial inclusion problems among small and medium-sized enterprises. Additionally, we were expecting that banks would increase their lending to these firms as digitisation reduced the cost of compliance. We saw inroads being made, but progress was slow."
"Then blockchain came along and it was the first time I’d seen a wholly novel solution being proposed to finance those firms that were being left behind. I was intrigued by the potential, and continue to be intrigued, especially now as we witness all industries scrambling to meet additional demand in the new Web3 era."
Q2. How has gender diversity improved in fintech over the past decade?
"There's certainly a greater recognition today that diversity is an important part of every team. This is a positive development that we should be proud of – however, it is also not enough to simply aspire to something, and the data shows us exactly that."
"Take venture funding for example, which most fintechs use. The proportion that goes to women-led firms is still only in the single digits in 2023! To be specific, in 2022, companies founded solely by women received just 2 per cent of the total capital invested in venture-backed start-ups in the US. Likewise, in the UK as of 2021, female-led fintechs make up only 4 per cent of the total investments in UK fintechs. While funding for women-led firms is rising, this shows the distance we still must go."
Q3. What are the main challenges that female leaders continue to face in fintech?
"The number one challenge for women leaders in fintech is the constant need to exhibit perfection. The women leaders we have in fintech are high achievers, extremely productive, well-networked and efficient. Male leaders are allowed to have more variation. Women leaders shouldn't have to be outstanding to become leaders."
"Another challenge is the still nascent networks among women in the workplace. This is a longer-term problem as these networks grow over time. Until there is a deep pipeline of women who are leaders and managers and heads of organisations there will still be a lot of demand to climb and not enough ladder rungs. The Web3 space is building many of these rungs with more women entering tech and tech-adjacent industries. This will provide everyone with more opportunities to prove their excellence without pressure to be anything else or more than their already talented selves."
Q4. How can the industry encourage greater representation of female leaders?
"I have a paper that will be published soon looking at the reasons for the relative absence of women heads of multilateral institutions (beyond the few superstars we can all name). In that paper, we find two things that also hold for fintech. First, the pool of applicants for leadership positions often only includes one or two women. We need to start with collecting wider, more representative applicant pools."
"Second, having a female leader once does not often lead to more female leaders in future rounds. Greater representation is something we need to constantly work on – and the responsibility to do so should not always and only fall to the women in those leadership roles. This is an effort that needs to be deliberate and actively cultivated at the level of the institution."
Q5. What advice would you give to your younger self at the start of your career?
"I would offer advice that holds for all genders. The most important thing you can do is to take ownership of your work. If something is difficult, don't wait for someone else to solve it - try it yourself. This is the kind of mindset innovative industries like fintech expect. Companies that work in the Web3 space are disruptive by design. They don’t assume that just because something always existed one way it must continue."
"Another key bit of advice is that the industry will constantly change due to the competitive environment it resides in. You need to be ready to pivot and embrace change in order to make the most of whatever opportunity is presented to you."
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