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Exclusive: Despite Industry Support, Fintech Executive Boards Remain Low on Ethnic Diversity

Fintech’s came out en masse in support of the Black Lives Matter campaign, but the ethnic makeup of their executive boards reveals a lack of ethnic diversity

Amid the outcry over the killing of George Floyd in the US, fintechs were among a slew of corporates across multiple sectors which were vocal in backing the Black Lives Matter (BLM) campaign and its call for change.

The response from the fintech community, which came amid a pandemic that disproportionately claimed black lives, was varied.

Some fintechs publicly admitted their failings in recruiting black and, more broadly, BAME (black, Asian and minority ethnic) staff; some promised to recruit more diversely in future; others pledged to donate to organisations addressing diversity; and some guided customers to relevant BLM reading materials.

Morgan Mahlock, a BLCK VC representative, an organisation wanting to advance black venture capitalists, said: “We have witnessed an overwhelming response from industries across the board.”

Like many, TranferWise quickly responded to BLM but was aware that changes in the longer-term are also needed.

Ross Seychell, chief people officer at TransferWise, said: “Whilst we have made some immediate changes, our HR and other teams continue to listen and identify what work needs to be done long-term to build more awareness, and encourage even great inclusivity across TransferWise for everyone.”

Fintechs have some way to go

Despite the groundswell of support for BLM, evidence suggests that black and BAME voices are still not being heard at the senior end of fintechs.

A number of fintech executive boards surveyed by The Fintech Times have no BAME representation on them, even among those fintechs supporting the BLM campaign.

Juliette Souliman, a VC investor, said: “I think it’s super important that they are vocal. It is great that they put a statement out there, great that they give a bit of reading and educate people around those topics.

“But in my opinion, the most impactful stuff is to finally wake up and hire people in those demographics.”

Brand activism on the rise

 The demand for more ethnically diverse boards and workforces comes amid an environment in which consumers are increasingly demanding companies act with purpose- and take a stand on political, social, race and environmentally issues.

PensionBee’s fossil fuel-free pension fund partnership with Legal & General; LendinVest’s green finance initiative allowing borrowers a cashback option if they decrease energy usage and Dutch challenger bank bunq’s SuperGreen card which allow customers to plant a tree every time they use the card are just a handful of fintechs trying to act with purpose.

According to Accenture, 62 per cent of consumers want companies to stand up for the issues they are passionate about.

But companies also have to practice what they preach.

Adam Stones, a communication strategist told the BBC: “People are not naïve. A company which tries to earn their trust without the intent will be found out by customers and even investors.”

The demand for fintechs to make a positive contribution is particularly acute, as much of the demand is been driven by Millennials and Generation Z, a key customer demographic for fintechs.

What should be done to get a more diverse workforce?

BLCK VC co-founder Sydney Skyes told TechCrunch she was “more optimistic than I’ve ever been”. She said: “There’s a recognition now from the bottom up, a real grassroots effort to say, ‘you need to change what you’ve been doing because it hasn’t worked’. I think these companies have been and they will need to continue to react to what their employees and what their customers are saying.”

But much remains to be done. According to BLCK VC, more than 80 per cent of venture firms don’t have a single black investor while one per cent of venture-funded startup founders are black.

As diversity figures are now a key metric of how well fintechs are performing, more diverse talent should be coming through the door, creating a snowball effect with some of these going on to take on senior positions.

Ben Rosen, founder of recruitment firm Inspiring Interns, which places fintech candidates, said: “In my experience at InspsiringInterns over the past year, there’s been a diverse range of candidates hired for entry level jobs. What I have experienced is a lack of black candidates in more senior positions within the fintech space.

“So in my opinion problems can be solved by an opening and encouragement of a clear career progression path for any junior candidates to excel and get promoted.”

One way of raising the number of BAME executives on fintech boards would be through quotas, though these are seen as controversial.

The use of quotas differs around the world: Germany, for example, has a rule requiring large companies to allocation 30 per cent of seats on non-executive boards to women.

In the UK, targets to grow diversity on boards are encouraged, but are not enforced.

Critics point out that quotas can lead to reverse discrimination and the best candidate not getting the job.

Souliman added: “I think people should hire the best people in the market. I think saying there is no black talent or female talent out there is not true. There are exceptional talents that are not being put forward.

“I believe that diversity of thought makes the best products and the most relevant products for the customer base.”

The makeup of executive boards and response to BLM 
UK Region

Monzo
Board of directors
Ten executives including one from a BAME background.
Response to BLM
Monzo said it had a “responsibility to speak out against racism and inequity” and donated to George Floyd’s memorial fund. It also pointed Monzo users to resources, which address the race issue.

Starling Bank
Board of directors
Ten executives, none from a BAME background.
Response to BLM
Starling said “we know we can do more” and that it was “actively” looking at how it can support black colleagues. It has made donations to two organisations-Colourintech, a non-profit working to address diversity and inclusivity in the tech industry and the 4Front Project, a youth-led social enterprise wanting to reduce youth violence.

TransferWise
Board of directors
Six executives, none from a BAME background.
Response to BLM
Set up a steering group to support black workers; also fastracked mental health support and training for staff; introduced a paid volunteering day; and is looking for charities and causes to support.

European Region

Klarna
Board of directors
Six executives, none from a BAME background.
Response to BLM
Klarna CEO Sebastian Siemiatkowski penned a blog, which said “to be silent is to be complicit” and said “we can do better”. The CEO said Klarna was making donations to the ACLU (American Civil Liberties Union) and NAACP (National Association for the Advancement of Coloured People).
“Equally, we are exploring ways to ensure we use our platforms to amplify the voices of businesses that should be seen and heard much more,” the blog continued, which didn’t reference the BLM campaign directly. Klarna created a marketplace to amplify black-owned businesses in its network.

N26
Board of directors
Not available, as N26 does not collect ethnicity data, due to data privacy regulations.
Response to BLM
In a tweet, N26 said it “stands in solidarity with our employees, customers and communities against racial injustice toward the black community.”
It added: “We recognise our responsibility to speak out for a peaceful and just wold and believe in using our collective voice to bring about change.”

North American Region

Square
Board of directors
11 executives, one from BAME background.
Response to BLM
Square (and Twitter) CEO Jack Dorsey will make June 19, popularly known as “Juneteenth”, a permanent company-wide holiday in the US to show support for racial diversity. Dorsey also made a $3m donation to Colin Kaepernick’s Know Your Rights campaign, a group aiming to educate Americans about what rights they have when dealing with the police. Square also tweeted that he wanted “an end to systematic racism and police brutality”.

Stripe
Board of directors
11 executives, not know how many from BAME background.
Response to BLM
In a blog entitled, “Opposing racism”, Stripe founder Patrick Collison admitted that Stripe employees had been the victims of racism. Collison said: “Too many Stripe employees have themselves been the victims of unfair treatment, discrimination, harassment and bigotry.” Collison also pledged that Stripe would waive $1m of fees to non-profits that are combatting systemic racism.  Stripe didn’t address the BLM campaign directly.

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