There are no two opinions about the roaring growth of financial technology (Fintech) space in India powered by young and agile firms blending the best practices of both the worlds of the modern economy – finance and technology – upending last-mile delivery of credit to the under-banked and unbanked segment of the population.
It may be a euphemism to say that this new breed of firms has disrupted the payment and settlement system in India beyond recognition in a short span of a few years’ time. A series of studies including those by the Reserve Bank of India (RBI) has chronicled and documented their achievements unequivocally and set new goalposts for the segment going forward.
The consensus view says fintech market will hit the $ 2.4 Bn mark by next year and is central to the plot of making India a $ 5 Tn economy by 2024. However, as the fintech companies roll on to the new growth frontier, they are also facing new challenges that need new strategies and calibrated effort to address them.
One such challenge that both the policymakers and the fintech industry should continue to prioritize is the issue of gender diversity, which can be articulated at three different but connected levels.
- First is the broader trend of lower participation ratio for women in the workplace.
- Secondly, this is also reflected in fewer women entrepreneurs in the space.
- Third is the broader social impact issue of lower women user base for FinTech companies.
Was This A Predictable Sign?
Arguably, this was predictable since fintech was borne out of the marriage of two segments – finance and technology – that have traditionally had a skewed workforce. However, this trend can be positively influenced to become more inclusive if the policymakers and the industry put their best foot forward.
For starters, fintech firms could make a fair move by driving a strong diversity agenda as part of business-critical imperatives, given its noted importance in driving innovation. Since innovation is at the core of fintech firms’ business models, this becomes only too critical. It may be important to remember that diversity of thinking underpins how fintech companies see and understand unmet needs in less penetrated markets.
The second question relates to the representation of women in leadership. Though no India specific numbers are available, going by the global trend women get less than 30% of the space in that coveted corner offices in fintech firms.
Research has proven that women-led enterprises deliver 25% more in profitability which drives home the criticality of diversity in leadership. Policy and government support can create a massive impact by encouraging and promoting women entrepreneurs to move into the fintech space. The Union Budget for 2019-20 roots for `nari to `narayani’ paradigm meaning more roles for women in economic activity.
Finally, there is said to be a huge gender disparity in fintech user base, though no numbers are available to support this view. However, even if the issue exists, it may autocorrect since women are no laggards when it comes to the use of digital platforms. Again, the Union Budget for 2019-20 with its big focus on women empowerment has proposed to set up a high-level committee to suggest more ways for the financial inclusion of women.
It is true that there will be no silver bullet to solve the issue of gender diversity in FinTech space. However, some necessary, if not sufficient, steps need to be taken to level the field. A start should be made at the firm level with FinTechs rebalancing gender inequality at different roles including top management and board level. Supporting structures like enrolling more women in the field of Stem (science, technology, engineering and mathematics) discipline should come from the Government.