New Focus On Women In (Fintech) Start-ups

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This is a guest post from Marguerite Arnold.

It is not just the stunning reversal of fortune for Hillary Clinton at the beginning of November which has stimulated a renewed interest in more diversity in the world of start-ups, and FinTech in particular. The conversation has been underway for quite some time.

Part of the drive for diversity, to be honest, is caused by a failure of women to rise to the top in most large businesses – including the financial services, banking or tech industries, despite a generation (at least) of trying. However, the focus on gender diversity remains, just about everywhere there is a budding FinTech start-up community. And a lot of the calls for diversity are coming from not “just” women, but men.

In Frankfurt Germany, this conversation is absolutely at the front and centre of just about every FinTech gathering right now. The Frankfurt “scene” is absolutely poised to break out on to the global stage, just because of the presence of so many highly educated, financially savvy people –from all over the world. But, as is painfully obvious, at gathering after gathering, except those ostensibly “for women”, the faces are mostly white, and with very few exceptions, all male.

As a result, there is an increasingly dedicated push to change that and for reasons that extend far beyond “political correctness”. This being Germany, there is a push to fill at least 30% of management boards with women as required by new German law that came into effect earlier in the year.

FinTech and Insuretech, in particular benefit hugely from the presence of women in senior positions for many reasons. The first is that the most successful companies in the sector succeed because they are able to define niche markets and reach them in new and often more efficient ways. While men are not incapable of figuring out how to do this, of course, having a different perspective, including unique experience and gender diversity along for the ride, is one way to succeed at this even better (no matter the community being targeted or service on offer). However, beyond service provision itself, the promise of encouraging more women to enter the FinTech industry is the new range of products their insights and experience have the potential to create. Even in the ostensibly “established” world of financial services and banking, the idea of a company (or companies) that provide services tailored to what women want is absolutely exciting. Beyond this, of course, is a wide range of products that interact with the consumer in different ways. Women play a huge role in helping to define the consumer experience – from the services themselves to how users interact with the interfaces.

As a result, there is actually no better time to be a woman in the world of start-ups. And the women who are, despite speaking and pitching to audiences still mostly made up of men , are also finding that for the first time there is a new acceptance and eager willingness to welcome them into the ranks of one of the most exciting industries on the planet right now.

You go girl!

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: Bridging the Gender Gap)

Frankurt: Europe’s New Fintech Hub?

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This is a guest post from Marguerite Arnold.

Frankfurt is one of the oldest business centres in the world. From at least Roman times, the low-lying city, bifurcated by the welcoming River Main, has been a hotspot for global endeavours that changed the nature of many industries – including but not limited to banking. Mayer Rothschild, a courtier to the German king of Hessen at the time, used the famous freedoms of the city to launch a global banking empire in the 1760’s.

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These days, Frankfurt is not just Europe’s banking centre and home to the European Central Bank. It is also on the verge of leading another revolution – in Fintech.

Why?

The first is just geography. In no other city where Fintech has taken hold are the presence of financial types and large banks so concentrated in such a small place. Frankfurt is roughly the size of Charlotte, North Carolina (the second largest banking centre in the U.S.) However, its residents, few in number compared to other large and influential cities and banking hubs, are both highly international (40% of the city is from somewhere else) and highly financially literate.

Further, with Fintech taking hold as a revolutionary force in banking and insurance, the large banks here are considering how to transition in a digital world which will change their business operations and market footprint – and that is not limited just to corporate banks, but global powerhouses like the ECB itself.

Frankfurt is an increasingly dynamic hub of Fintech start-ups, with unparalleled access to large banks. Even in London and New York, both financial superpowers in their own right, Fintechs do not have the same ability to reach power brokers and decision makers so easily and directly.

Frankfurt is also home to a well-heeled group of investors – whether they be individual “angels” or family offices – who are looking, at this point, for the next digital growth story. That makes the city one of the best places to both live and pitch on a regular basis. The start-up scene itself here is relatively tightly knit but, critically, also open to newcomers. Most advertise meetings on the Meetup Platform. It is possible to go to (at least) one event every day of the week.

Cross promotion of different kinds of events is also beginning to happen as the scene begins to mature. While the opening of Accelerator Frankfurt marks the first of such entities, it won’t be the last. Free office space for promising start-ups is relatively easy to find.

Unlike Berlin, Frankfurt also promises to be a city that promotes the growth of more B2B financial endeavours. While there are digital entrepreneurs here with start-ups of every kind, the mix in Frankfurt promises to see an increasing slate of innovative business models challenging every part of the banking and insurance business (which in Germany are more tightly linked than almost anywhere else in the world).

The impact of Brexit is also likely to give the Fintech start up scene here a boost, although it is uncertain at this juncture how much of one and in what form. What it is likely to do, however, besides sending a flood of British expats, is create a banking industry itself that is ripe for change and innovation.

Frankfurt is also (relatively speaking) far cheaper to live and work in (certainly comparable to Berlin). There are regional trains, subways that line up with station platforms and even street trains (plus busses) that make this little gem on the Main a potential start up paradise.

Four hundred years after Rothschild revolutionized banking, therefore, on the banks of the Main, another age dawns that promises innovations that are just as earthshattering, albeit this time, digital.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: Wikipedia)

Brexit & The Future of Startups In Europe

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This is a guest post from Marguerite Arnold.

Since 1972, Britain has been part of the European continent. I remember the opening very well. I was a kid, living in London. The new openness meant we could afford oranges from Spain. Every week, an old French farmer would also peddle through London with strings of onions hanging from his bicycle. I thought the arrangement was unbelievably cool and more than romantic.

Fast forward forty years, and the situation is now reversing, and that is not only a shame, but I predict it will have dire and unforeseen consequences for the British.

The England I knew as a child was a fascinating place. It was a country struggling to keep together the concept of a social state, still wounded by the war, and losing the last pieces of its Empire. You could still travel to central parts of London and see unreconstructed bomb sites left over from the war. I will never forget seeing one, incongruent with the bustling scenes around it, and asking my father what it was from. He answered “The Blitz.”

Today, of course, London is a different city, and England is a different country – transformed, much like the U.S. into an economy which may be again calling itself “shared” – but in fact is premised on something very different.

After WWII, most European countries, as well as significant parts of the U.S., believed the future was only attainable by creating a strong social platform upon which the other parts of life would work. “Regular” jobs. A middle class life. A steady pay check. A system to take care of the sick. Retirement funds to take care of the old.

That system is gone now – or at least fading, and we are on the cusp of something else. Thus the explosion of start-ups, start-up culture and the new entrepreneurialism. This is part of the reason that start-ups have thrived in the U.K. – particularly high tech start-ups. The country has been, for a generation, trying to define itself. There is no way the island can survive independently. No country can. The British train system uses German trains. The auto industry is hurting. Oil is an uncertain energy source. Overpriced British real estate in London fueled by foreign investment does not an economy make. Britain, right now, is much like the U.S. Casting off the old very quickly in an attempt to create something that works better (although for whom and how many is still an open question).

However start-up culture is not the same everywhere.

Across the Channel, things are different. There is more social integration and infrastructure. Every country east of France still has a streetcar system that works. There are still national healthcare systems which strive to provide health care for the oldest and sickest. And the approach to start-ups is a lot more cautious – in part because things still work the way they were designed to. People here just do not understand how, for example, a presidential candidate who did not pay his taxes for 20 years can even be credible.

This reliance on a broader superstructure, which the Europeans are loath to destroy in search of something “new”, does not mean there is no innovation. As a professor of mine said to me recently, mobile payments (a particularly hot area of Fintech innovation elsewhere) are just not a priority in Germany because of the continual upgrades and improvements to the customer banking experience (also known as SEPA), that has already created a workable middle way.

However, Europeans in general and Germans in particular, are not deaf to innovation. They too are looking for ways to innovate as the older systems become increasingly outdated. It is just moving a bit more slowly here – and frankly a bit more humanely. Chaos might provide a lot of exciting booms, but that is not a place where most people want to live their lives. And as Britain shuts its doors to the rest of the continent, there are many now who are looking increasingly to both Berlin and increasingly Frankfurt, to be a new platform for innovation.

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In Frankfurt, there is a steadier (and much cheaper) platform for innovation in the form of cheap rent, transportation and an overall standard of living. And it is provided by the security and infrastructure that comes when countries do not throw the baby out with the bathwater in search for “something” if not “anything” new.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: BBC and Tripadvisor)