FINTECH: Two-sided Ageism

Source: WSJ,  CMO

Source: WSJ, CMO

Last week we talked about how Fintech (and startup culture in general) has a deep Femtech failing that needs to be addressed. So let's talk about the other diversity problem in the industry -- ageism. In a recent survey, Fintech Circle Institute found that (1) 94% of financial services professionals suspect their colleagues of using buzzwords like “Blockchain” and “Artificial Intelligence” without understanding them, and (2) 84% said colleagues with advanced digital skills and 5 years of financial experience are more deserving of promotion than those with poor digital skills but 10+ years of financial experience. Tearsheet has a great article on framing the problem: Senior executives have to retrain for a Silicon Valley-inspired financial services industry or square off against younger, cheaper Millennials that come digital first. These issues are turning into institutional hiring/firing decisions, which in turn lead to age-discrimination lawsuits against firms like Bank of the West, with ajudgment of ~$1mm awarded to a wrongly terminated 61 year old executive.

On the other hand, take Jamie Dimon's unexamined proclamations on cryptocurrency (Laura Shin of Forbes does a spectacular job of parsing where he goes wrong). The future is built on a different DNA, and yet Jamie is using his global platform to stubbornly perpetrate outdated thinking. Or look at the mind-boggling ease with which former senior bank executives are raising money for startups with minimal traction. Former Barclays CEO Antony Jenkins received £34m for his bank-as-a-service infrastructure play, with support from Oliver Wyman and Ping An. Sallie Crawcheck raised $35m for Ellevest, which only has $55m in assets under management, far less traction than what FutureAdvisor, Wealthfront or Betterment had to show for a similar size check. If the firm you led perpetuated the problems in the industry, why should venture capital go to your new company, and not to a Millennial with a moonshot idea?

There are no easy answers, but here is an attempt. Build teams that understand your customer, both where they are today and where they will be in the future. Smart thinking and a desire to innovate have nothing to do with age -- as this 94-year old inventor of the lithium-ion battery teaches us. But the half-life of industry experience and knowledge is getting shorter and shorter, so an open mindset that encourages changes in the status quo is required of us all.