As businesses start to slowly reopen after being forced to shutter during COVID-19, many experts believe that FinTechs will play an important role in getting these firms—particularly SMBs—back on track.
During the height of the pandemic, many FinTechs saw a boost in usage as people transitioned to working and living largely at home during lockdown. European FinTech apps saw a 72 percent rise, while Japan and South Korea experienced jumps in usage of 85 percent from December of last year to March of this year. In the U.S., usage increased by about 35 percent.
Now that countries are easing restrictions, FinTechs could lead the way to recovery, particularly those led by women. After all, these CEOs know a thing or two about surviving a crisis – Catherine Wines, cofounder of WorldRemit, points out that women in the sector need to work twice as hard as their male counterparts to obtain recognition, and statistically deal with more rejections when trying to obtain funding.
Innovate Finance’s 2019 Venture Capital Investment Report revealed that women receive only three percent of VC FinTech funding. The coronavirus crisis could make that gap even wider, says Dr. Ruth Wandhöfer of Gauss Ventures. She explained that there is currently “a $300 billion annual credit deficit in funding for small businesses owned by women, which is expected to grow due to the economic fallout caused by COVID-19.”
The FinTech industry also has a noticeable lack of women in its ranks. A 2018 survey conducted by Lend Academy found that only 37 percent of employees in the industry are women, and only 19 percent of women are in executive roles. Only 16 percent of FinTech companies have a female founder or co-founder.
Yet, facing these issues is what has helped many women-led businesses thrive during troubling times. In fact, a report from Harvard Business Review called women resilient, results-driven, and better prepared leaders when dealing with adversity.
“Women will play a crucial part during the recovery phase because we make up 50 percent of the U.K. population. That statistic alone should be suffice to understand that women will be part of it,” explained Sylvia Carrasco, CEO and Founder of Goldex.