UK fintech boards play a crucial role in driving long-term growth and innovation, but they face challenges in skills, experience, and gender diversity, according to a new EY and Innovate Finance report.
The report reflects interviews and discussions with more than 40 CEOs and chairs of a broad range of UK fintechs, who agree that diverse boards, encompassing a range of skills, gender representation, and experience, are crucial for fostering long-term growth and innovation.
However, a significant portion of survey respondents express concerns regarding skill gaps within their boards. While the majority believe their boards possess essential skills and experience related to Gen AI, 47 per cent feel these skills are lacking.
Additionally, only 42 per cent believe their boards have the necessary fundraising expertise. Gender diversity on UK fintech boards remains low, with just 22 per cent female representation among the top 50 fintech boards – falling below the FCA’s minimum 40 per cent female board representation.
Moreover, 37 per cent of UK fintechs surveyed have male-only boards, highlighting a need for greater gender diversity in leadership positions within the sector.
Recipe for success
Anita Kimber, UK partner and fintech policy and ecosystem leader at EY, outlines the vital role of diverse, long-term strategic guidance from boards in achieving scalable and sustainable growth for UK fintech.
“The core focus of UK fintechs is often on achieving short-term growth and rapid innovation as they grow and scale,” she says. “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.
“While the nature, role and construct of boards naturally evolve over the life cycle of a fintech, in all phases of growth, board members are most effective if they collectively hold a diverse and deep understanding of customer needs and market dynamics. This also helps as they advise and support the CEO to drive organisational purpose, deliver financial results, achieve good customer outcomes and meet regulatory standards.
“Our research finds without doubt that boards are key to UK fintechs achieving scalable and sustainable growth, and going one step further, that diversity of gender, skills and backgrounds can represent the difference between success and unrealised potential. The UK is home to a world-leading fintech sector, and there is much to lose if firms do not prioritise strategic guidance, purpose and diversity of all kinds.”
Report recommendations to accelerate progress
- Appoint a dedicated Consumer Duty champion within the board, ensuring a deep understanding of regulatory requirements and customer perspectives.
- Establish a strategic board-level focus on ‘purpose’ to positively influence activities, reinforce culture, and attract customers and investors. Prioritise diversity by resetting the tone from the top, promoting broader thinking, wider perspectives, and achieving growth.
- Make AI a central focus and a driver of business growth.
Janine Hirt, CEO at Innovate Finance, highlights the critical role of effective boards in sustaining the growth of the UK fintech sector.
“Today, eight out of 10 adults in the UK are now using at least one fintech tool on a regular basis. Nearly 60 per cent of all SME lending done across the UK is being done by fintech challenger banks, or alternative lenders and the UK boasts 10 per cent of global fintech market share. And despite a global downturn in investment, UK fintech continues to attract more investment than all European countries combined.
“To ensure UK fintech continues to grow from strength-to-strength, however, we believe it is important that startups begin to build effective boards from the beginning of their scaling journey, and continue to prioritise board effectiveness and diversity. This is one reason we are delighted to partner with EY on this important research confirming how critical fintech boards are for sustainable growth.
“This unique report identifies what the best practices are for building and managing effective boards’ and includes insightful perspectives and recommendations from industry experts. With this report we hope to make a difference in the ecosystem and shed some light on board effectiveness to benefit fintech businesses, their founders, investors and consumers to create a more inclusive and more transparent sector for all.”
