A newly published report by EY and Innovate Finance, titled Setting the pace or keeping up – are FinTech boards future-fit?, offers a crucial examination of the state of UK FinTech boards.
According to FinTech Finance, key findings suggest significant gaps in essential skills, particularly in AI and fundraising capabilities. Notably, 47% of FinTech board members admit to a lack of GenAI expertise, which is critical as AI continues to revolutionise the financial sector. Furthermore, only 42% of boards are equipped with necessary fundraising skills, with 30% highlighting it as the most significant deficiency.
Gender diversity is another area where UK FinTech boards are notably lacking. The average female representation sits at just 22%, considerably below the Financial Conduct Authority’s recommended minimum of 40%. This lack of diversity not only challenges regulatory expectations but may also impede the sector’s growth and innovation capabilities.
The report underscores the strategic importance of boards in navigating companies towards long-term success. It stresses that while the immediate focus for many FinTechs may be rapid scaling and innovation, strategic guidance from well-rounded boards is indispensable. These boards need to embody a diverse mix of skills and perspectives to adeptly support CEOs and align with customer and market demands effectively.
To bridge the current skills and diversity gaps, the report proposes several actionable steps for FinTechs:
- Appointment of a Consumer Duty champion on the board to ensure the regulatory and customer perspectives are prioritised.
- Strategic emphasis on ‘purpose’ at the board level to enhance company culture, attract investment, and improve customer engagement.
- A reset in board diversity approaches to broaden viewpoints and foster inclusive growth.
- Making AI integration a central business strategy to leverage technology for competitive advantage.
EY UK Partner and FinTech Policy and Ecosystem Leader Anita Kimber emphasised, “The core focus of UK FinTechs is often on achieving short-term growth and rapid innovation as they grow and scale. However, CEOs of UK FinTechs emphatically told us that long-term advice and strategic guidance from their boards – underpinned by diverse skills, perspectives and ideas – is vital to the ultimate success of their firms.”
Innovate Finance CEO Janine Hirt noted, “Since 2008, the FinTech sector has played a crucial role in democratising financial services. Today, 8 out of 10 adults in the UK are now using at least one FinTech tool on a regular basis. Nearly 60% of all SME lending done across the UK is being done by FinTechs, challenger banks, or alternative lenders and the UK boasts 10% of global FinTech market share. And despite a global downturn in investment, UK FinTech continues to attract more investment than all European countries combined.”
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