Of FinTech & Finding Skilled Talent
Is Google Pay your go-to payment method for daily needs? Digital transactions are now used to buy stuff off the street, even if it’s just for a few bucks. Well, that indicates the expotential growth of the Fintech sector (financial technology) in a data-driven world that we live in today.
Fintech’s growth catapulted during the pandemic, with the number of fintech startups standing at 7,500 across the globe. During 2014 to mid-2022, this sector received more than $30 billion in funding. Innovation in client acquisition, underwriting, pricing and collections, along with customer service has been the reason for FinTech’s growth along with a rapid surge in digital transactions.
Meanwhile, favorable macroeconomic and demographic factors, including rising middle class population with higher disposable incomes to buy, borrow, save and invest more; increasing mobile access and digital adoption; abundant financial services and technology talent in the country; availability of equity and debt capital; and above all, government initiatives and regulatory efforts to create a conducive environment to go digital, have contributed a lot to this sector’s rise.
Big Data, Blockchain rules the Roost
The technologies supporting the fintech business models vary significantlly. They include Blockchain Technology, Artificial Intelligence (AI), Machine Learning, and other big data functions like Robotic Processing Automation (RPA). In such a rapidly changing tech landscape, TechDoQuest also explores how the gender balance in the FinTech workforce is skewed.
Like most of the sectors, fintech is yet to strike a gender balance Studies show that, last year less than 30% of the UK’s FinTech workforce were females. The gaps are faced at 3 different levels:
Few Finance Graduates & Recruits
This issue arises from the entry level. Employers are often complaining that women applicants are very scarce during the recruitment process. The exisiting low employment ratio is what keeps most of the women from applying. This also has a lot to do with few women opting for finance related education streams.
Few Female Leaders & Founders
The numbers see a steady decline when it comes to the count of women in leadership and managerial roles in the sector. As per the FinTech 50 report, men reigned the leadership roles with a total of 118 leaders while women at leadership positions stood at less than half of that, at 50. The issue is because there are less number of women in STEM careers.
Few Women Users of FinTech
Well, men use fintech apps more than women. Given that most of the financial decisions are predominantly made by men, the trend seems to have less female users who invest/save or use apps for banking or financial management. ,
Emerging Tech, Emerging Cyber Attacks
With cyber frauds and scams skyrocketing, Cybersecurity is one of the pressing issues with respect to the use of FinTech. The success of a digital platform and good customer experience are largely dependent on the security and encryption provided by FinTech firms. Some of the major risks and challenges estimated for fintech companies are ransom attacks, open source risks, and cloud security threats.
Additionally, ransomware attacks are becoming more organized and advanced, posing a challenge for experts to identify and neutralize the threat. Moreover, risks identified in open source and third-party softwares have been on the rise along with the challenges connected with cloud security.
Data breaches have had the biggest impact on the cyber security space in the past 12 months. Over 4,100 publicly disclosed data breaches occurred in the year 2022 which meant that 22 billion records stood exposed. As per the Cyber security publication Security Magazine, the numbers for 2023 are expected to exceed this figure.
Demand for Skilled Talent Up
As more user information, financial credentials seem to be out in public with e-commerce and retail companies using this information and tech firms making the most of this data, it is clear that trends that will drive FinTech in the future shall be: 1) To bring more transparency in transactions; 2) More user-friendly personal financial apps for investing, trading, etc which the GenZ too is currently using; 3) Financial management is becoming a key skill and hence, the sector is set to undergo huge disruption; 4) Finance in Enterprise Tech & Insurance; 5) More encryption in Fintech infrastructure.
With FinTech firms always remaining at the forefront of using emerging technologies, the global FinTech market is expected to reach $332.5 billion by 2028 from $221 billion in 2021. This reflects the growth, not just in numbers, but also in terms of skilled talent that is required to support this tremendous growth.
(Author: Alisha Fernandes is an inquisitive learner & content writer at TechDoQuest)