Diversity up, Inclusion down – Business Impact & Solution
Let’s start with an existential question – why do we even exist as human beings?
An ultimate accomplishment is to have complete and unhindered self-expression. For most of humanity, this happens best in the context of love, respect and belonging since it makes us feel safe and courageous. We also know that the opposite of courage is not fear, it is conformity. And conformity suppresses creativity and self expression.
Honest D&I is an organization’s way of saying “I love you and I respect you” and leaders have the highest leverage and impact of anyone. For some time this has been a space where the answer to the question of being a company that believes in and practices D&I was “we think so”. It does not have to be that way anymore. People Analytics and in particular ONA (organization network analysis) is a tool companies can use effectively, at a relatively low cost in relation to ROI, to visualize, measure and constantly make increments. We will get to this a little later.
Diversity Doesn’t Stick Without Inclusion
As per HBR, “Diversity” and “Inclusion” are so often lumped together that they’re assumed to be the same thing. But that’s just not the case. I”‹n the context of the workplace, diversity equals representation. Without inclusion, however, the crucial connections that attract diverse talent, encourage their participation, foster innovation, and lead to business growth won’t happen. Numerous studies”‹ show that diversity alone doesn’t drive inclusion. In fact, without inclusion there’s often a diversity backlash.
As noted diversity advocate ”‹VernÄ Myers”‹ puts it, “”‹ Diversity is being invited to the party. Inclusion is being asked to dance.”
McKinsey has been researching this domain for numerous years. The findings below emerge from their largest data set so far, encompassing 15 countries and more than 1,000 large companies. They have incorporated a “social listening” analysis of employee sentiment in online reviews and their findings highlight that companies should pay much greater attention to inclusion, even when they are relatively diverse.
Diversity – Key Takeaways:
- Likelihood of outperformance continues to be higher for diversity in ethnicity than for gender – a substantial differential likelihood of outperformance””48 percent””separates the most from the least gender-diverse companies.
- The greater the representation of women, the higher the likelihood of outperformance; Companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30,
- companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability
- despite the awareness, there is a widening gap between D&I leaders and companies that have yet to embrace diversity; the representation of ethnic-minorities on UK and US executive teams stood at only 13 percent in 2019, up from just 7 percent in 2014
- In 2019, fourth-quartile companies for gender diversity on executive teams were 19 percent more likely than companies in the other three quartiles to underperform on profitability””up from 15 percent in 2017 and 9 percent in 2015.
Diversity without inclusion is a story of missed opportunities. Here are some key takeaways from McKinsey’s outside-in research using “social listening,” focusing on sentiment in employee reviews of their employers posted on US-based online platforms. While this approach is indicative, rather than conclusive, it could provide a more candid read on inclusion than internal employee-satisfaction surveys do
Inclusion – Key Takeaways:
- While overall sentiment on diversity was 52 percent positive and 31 percent negative, sentiment on inclusion was markedly worse, at only 29 percent positive and 61 percent negative.
- For the three indicators of inclusion””equality, openness, and belonging”” their research found particularly high levels of negative sentiment about equality and fairness of opportunity.
- Negative sentiment about equality ranged from 63 to 80 percent across the industries analyzed. Negative sentiment about openness ranged from 38 to 56 percent
- Belonging elicited overall positive sentiment, but from a relatively small number of mentions.
HBR research finds that employees with inclusive managers are 1.3 times more likely to feel that their innovative potential is unlocked. And therefore employees who are able to bring their whole selves to work (i.e. who feel included) are 42% less likely to say they intend to leave their job within a year.
Societal Context
Let’s zoom out for a second into a wider societal context. Over 9 million people in the UK ”“ almost a fifth of the population ”“ say they are always or often lonely. The Brits may not be the only ones feeling this way. The overuse of technology is a cause of depression, social anxiety and a lack of meaningful connections. And if we add to this lack of feeling included at work, what kind of a society will we end up creating? This impacts everyone – our own partners, kids, parents. With only a handful of aware individuals (leadership), a world of good can be created in society.
Not only it D&I is right from a humane perspective, but data not only suggests that it makes a good deal of business sense; organizations with the D&I”‹ esprit de corps’”‹ position themselves for business success by attracting the right kind of talent and making them feel like they are in the right place. This spurs safety, feeling cared for and as a result the release of the creative genie out of the bottle for out of the box thinking, non-conformist thinking and exemplary performance. The stats are above to make the business case.
Using Organization Network Analysis for insights into D&I to track and report progress
For some time this has been a space where the answer to the question of being a company that believes in and practices D&I was “we think so”. With Organization Network Analysis (ONA), it does not have to be that way anymore! ONA can be used not only to measure diversity but also to measure network activity and analyze the immersion of different employees across the organization
With ONA, you can map and analyze patterns of interaction across relationship networks of every employee, so Diversity & Inclusion leaders can understand where differences exist in specific groups of employee’s networks in different hierarchies.
Even relatively diverse companies face significant challenges in creating work environments characterized by inclusive leadership and accountability among managers, equality and fairness of opportunity, and openness and freedom from bias and discrimination. However with the right tools, technology and data, you can measure the impact of your various D&I initiatives and make required improvements on an objective basis.
Puneet Sachdev is International Director, Human Capital at The Singularity Lab. The Singularity Lab is an integrated human capital consultancy, helping technology companies achieve exponential results by attracting and retaining top talent and creating high performing inclusive cultures based on data, design and technology. Learn more about our”‹ ”‹ONA solution”‹ for D&I.
Mental Health in the workplace under COVID-19
Coronavirus is inevitably something which has affected us all. It has affected how we feel, how we work, and how we live. We want you to know that no matter how you are feeling during this time, you are 100% not alone. You are completely normal. You are acting like a fully functional human being reacting to threat, and we are all hardwired to do this.
So what is the hardwiring of humans that makes us feel anxious, irritable, and unmotivated during this worldwide pandemic? We explore what roles various parts of the brain have to play in our reactions to this threat. We are hopeful that by gaining an understanding of these functions, we can recognise and respond in ways that will work more effectively for us.
None of us really have any control over the coronavirus spread, or the economic situation. But we can act to help ourselves. We believe that through having structure and routine; acknowledging our thoughts and feelings; practicing mindfulness; becoming aware of our breathing; taking care of our physical needs; and considering our personal values, that we all might be able to take some steps towards improving our mental health during these times.
Below you can find our blog around Mental Health and how OK Positive can help with supporting you individually and your company.
Time to secure our emails
In February I wrote about the growing awareness of cybercrime targeting the financial services and the industry’s need ”“ and I would say duty ”“ to help protect consumers and businesses against this invidious problem which has been growing year-on-year. Little did we know at that point what was coming down the line.
The current crisis in which we find ourselves ”“ with the public fearful of the pandemic and businesses having to enable staff to work from home ”“ have made both even more vulnerable to cybercrime. Cybercriminals are playing on not only people’s fears around the Covid-19 pandemic but also the unprecedented need for staff to work from home, stretching companies’ communications channels and security systems.
Regulators, including the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), have issued warning statements on cybercrime and scams, a clear indicator of the seriousness with which they take this issue and the extent to which it is a problem ”“ see FCA: https://www.fca.org.uk/news/news-stories/avoid-coronavirus-scams/.
Incidences of scams, like phishing and smishing’ ”“ i.e. when criminals use emails or text messages to impersonate individuals or organisations to trick people into giving away their personal and financial information or money ”“ are reported to have increased notably over the past few weeks as the Coronavirus has taken hold.
At the same time, the need for data and information, including that of a personal and confidential nature, to move outside of companies’ security systems, has increased the risks for businesses, including that their communications will be intercepted.
For the financial services industry, this risk has been exacerbated by the end of the tax year and the need to meet tax and investment planning deadlines, which has meant advice firms have needed to get client requests and information to platforms and providers in the most expedient way.
As you might expect, most communications are by email, particularly between adviser and client, because that is the most familiar, fastest and easiest channel to use.
As mentioned in my article in February, working with leading cyber security specialist Beyond Encryption, we have developed and launched a new encrypted email solution for the financial services industry, in particular aimed at protecting the communications between product providers, platforms, advisers and end clients.
So, to help financial advisers secure their email communications during the crisis, we’re providing two months free use of the Unipass Mailock premium service for our Unipass identity service users in advice firms. To take advantage of this, users simply enter a voucher code (2monthsfree’ via www.unipassmailock.com/) to get access and there is no automatic renewal and no payment information required to get started.
It is our way of helping the industry to tackle this particular issue which has been magnified by the current unprecedented crisis we are all experiencing.
I would add that in an industry where transmission of data is key, and emails are the primary communication channel and will remain so for the foreseeable future, now, more than ever, it is time to secure our emails.
COVID-19 ”“ New update from FinTech Scotland 28/04
As we enter the 6th week of lockdown, FinTech Scotland CEO, Stephen Ingledew, is giving us a two minute update on examples of what’s happening in the Scottish fintech cluster and beyond.
We’ve been delighted to see how Scottish fintechs have adapted to the situation and many are using their innovations to address the economic and social impact of COVID-19 on people, businesses and the economy including
Inbest, Castlight, Wallet Services, BePayd, DirectID, Amiqus, Sustainably, Modulr, Giftround, Float, Xpand Access, Soar are all rising to the challenge.
Nicola Anderson published a great blog highlighting some of the fintech innovation initiatives.
We’ve been working with colleagues from eight other European fintech hubs to draft a proposal to submit to the EU commission highlighting measures that could be taken at the European level to help the fintech sector through such difficult times and contribute to the overall effort with their innovative solutions.
In the video Stephen also gives a shout out to our friends at French fintech firm Worldline who organised a virtual running event to support the NHS front line teams.
We hope you and your families are safe and we’ll be back soon for more updates. Please keep in touch in the meantime
FinTech Scotland Team
COVID19 – Scottish Fintechs fight financial vulnerabilities
The past few weeks have been unprecedented, and as we continue to hear the developing views of what’s being described as the new norms’ it’s likely we’re going to continue to experience more turbulent and unchartered times ahead.
The impact of COVID-19 is being felt far and wide and is presenting so many challenges for everyone as we all work together on the immediate priority of staying safe and healthy. But for many people there is an increasing additional worry about money and finances as they grapple with the consequences of an unexpected income hit, closing a business or loosing their job. Many are facing extremely difficult circumstances, possibly exacerbating previous problems or exposing others to real financial concerns for the first time.
Since I’ve known it, the spirit in the FinTech Scotland community has always been about inclusion and better outcomes for people and business. In the last few weeks we’ve seen many of the fintech SME’s turn their attention to the impact being felt across society as businesses, and fundamentally people, look for help to access money, finance and help with basic essentials. It’s what these fintech businesses excel at and the results continue to inspire and impress.
Scottish fintech’s are using their data analytic capabilities and technologies to develop a range of propositions that address increasingly difficult issues. Alongside members of the FinTech Scotland consumer panel they are exploring newly developing priority issues to help people get access to services that help meet some basics fundamental needs.
These developing examples of access, access, access’ include:
InBest’s work with community leaders and the impartial debt adviser sector to help people understand if they may be entitled to social security benefits like universal credit within minutes. It’s using AI, Open Banking and data analytics to help pinpoint potential ways for advisers to help financially vulnerable people to maximise their income.
Soar’s is working hard across the with credit union sector, building on its experience of working with this important community service and helping them move to an online and digital platform. This is enabling more credit union customers get access to vital savings or credit from the community lenders that know and understand the local circumstances.
Amiqus continues to use its expertise to help people verify their identity in a digital environment to help them gain access to vital services and benefits. This team use their data and technology capabilities to help employers, banks, government and other vital services clarify an individuals identity in a virtual world.
Direct ID, a fintech data and tech expert is working to help give lenders, employers, landlords and others a means to adapt physical parts of their processes that depended on premises or branches being opened, to virtual and online systems.
History tells us that it’s the moments of crisis, or at times of emergency, that great leadership and innovation spark progress and change. COVID-19 has raised a number of issues that people need immediate help with. We must hope there will not be another crisis like this again, but must not loose the opportunity to address the experiences and needs we’re seeing as a result of this pandemic.
It’s time to rise to challenge, working to enable greater financial inclusion and access in unprecedented times feels like an opportunity not to miss. I’m privileged to work in fintech and with the Scottish community who are keen to progress this issue. If you’re interested in collaboration or hearing more please get in touch.
Research – Why 4 in 10 businesses abandon banking applications?
200 companies took part in this survey which tool place after the Chancellor of the Exchequer announced a £330bn rescue package to help UK companies through the Coronavirus situation.The results also show that companies plan to prioritise spending on cybersecurity over anti-financial crime compliance. Indeed, over 80% of firms said they were confident in their understanding of exposure to financial crime with the appropriate processes being implemented.
However, when looking at the data, just over 40% of them said they did not regularly put customers and suppliers through formal KYC processes and 60% of them hadn’t trained their collaborators on how to be compliant with the Fifth Money Laundering Directive (5MLD)
You can read the full research and more here.
COVID-19 – An update from FinTech Scotland
- Ongoing update by the Scottish Government on business support available. For question call 0300 303 0660
- ScotlandIS coronavirus hub with a number of resources to help tech businesses responding to COVID-19
- Deloitte are also providing useful information and webinars on their hub
- For legal assistance, Pinsent Masons are publishing content daily and are also running webinars
In the next few weeks we’ll be organising virtual drop-in sessions for the Scottish fintech firms.
How Fintech Will Shape The Future Of The Forex Market
Among mainstream investing opportunities that exist outside of the stock markets, forex trading has long been a popular option. Today, this market is the most liquid in the world, and handles a massive amount of trading activity. But it’s also a market that has evolved over the years with some thanks to technology ”” which makes it one to watch as we observe how fintech continues to develop.
The earliest sign of technology helping to expand the forex market, aside from the actual beginning of the internet age, was perhaps the emergence of smartphones and the accompanying apps. Home Business wrote a piece just two years ago covering mobile tech’s effect on the world of investing. Basically, the idea is that the connectivity phones now provide give investors unceasing access to financial markets, which in turn leads to greater liquidity and volatility. This is absolutely the case in the forex market, which traders tap into from all over the world at all hours of the day.
Alongside the involvement of mobile devices, investment markets have also seen the rise of a growing number of accessible tools and analysis that can simplify the trading process (and in some cases even make it easier to generate gains). For instance, the same article from Home Business pointed out that mobile algorithms and applications are now available, and can often provide automated glimpses of the best trading strategies. And regarding forex specifically, FXCM shows how readily available profit calculators can now provide near-instantaneous clarification of the profit and loss potential of any given trade. This enables investors to make mathematically strategic decisions far more efficiently than in the past.
These are all examples of tech’s increasingly large role in investments, and in the forex market in particular. And while they don’t necessarily fit into what we now think of as fintech, they helped to pave the way for some of the fintech-related changes we’re beginning to see in how the modern forex market actually functions.
For an existing example, we can turn to our overview of Fexco, which is currently one of the world’s most established fintech companies. Fexco includes foreign exchange sectors among the areas it provides services to, and specifically helps to facilitate cheaper and more reliable transactions. It does so, as we noted in the overview, via the PayDirect portal, which is certified for information security. In simple terms, this is an example of tech-based secure transfer enhancing the appeal of forex transactions.
In the near future, we may see more examples like this, including some that take advantage of newer and more innovative pay transfer technologies. Specifically, it’s become increasingly likely that banks and private companies facilitating forex trades are going to take advantage of the blockchain. Business Insider spoke about this last year, making a note that HSBC had already “settled $250 billion in FX trades” using the blockchain in 2018. That’s an almost shockingly large number that would seem to indicate that this method of transfer is well on its way to widespread use. And the blockchain, some would argue, is the very definition of modern fintech.
As we look forward, there’s no reason to suspect anything but a deepening relationship between fintech and the forex market. Traders will continue to use the devices, tools, applications, and algorithms made available to them to make smarter and more informed decisions. And the investments themselves will continue to be carried out via the most secure and efficient technological methods.
Getting the Banking Balance Right
When we hear about the work that FinTech Scotland facilitates, it excites us at Verimatrix. It wasn’t long ago that our Scottish operation was a start-up called Metaforic, trying to find its way into the ”“ then emerging ”“ world of Fintech. The community that FinTech Scotland is building would have been valuable to us then ”“ just as it is highly valuable now.
Of course, the Fintech community in Scotland isn’t just start-ups. We have a proud and established financial industry – the Global Financial Centres Index (GFCI) ranks Edinburgh 7th in Europe and the top 30 globally.
It’s this mix, coupled with building the right community, that gives Scotland the right balance to build a strong and sustainable Fintech industry. Start-ups can learn from the experience and industry-reach of more established players. The established players ”“ now increasingly competing with the tech giants ”“ can benefit from the agility and fresh ideas developed on their doorsteps.
For Fintechs, another area to get the banking balance right is security. There’s no getting away from the need to secure your products and solutions.
When Fintech emerged as a sector in its own right, it had the luxury of playing on the edge of the financial space. That meant, in most cases, Fintechs were out of the scope of financial regulation. Over time, this has changed for two reasons:
- Fintechs are increasingly seen as partners of established players;
- Regulation has caught up with the evolving finance market.
So, what does working in partnership with banks and other established players mean for your security needs?
First, it means raised expectation levels. Services that are sold or resold by banks come with an implied trust associated with them. That trust has been hard won over centuries and is easily lost. As a partner of a bank, you gain some of that trust, but you are also expected to maintain it.
Second, it means being able to demonstrate that you’ve meet your new partners’ security “check boxes”. Through any procurement or partnership discussion with a bank or large financial institute, there will be security hoops to jump through. Being ready for these hoops not only makes the process easier, it also demonstrates to your new partner that you are a credible organisation.
What has changed with regulations and legislation?
The biggest changes are the new open banking regulations ”“ requiring banks to open up their platforms to third parties. We see this in Europe through PSD2, and similar changes are happening around the globe. These changes can be seen as legitimising Fintech.
Of course, with legitimacy comes responsibility and Fintechs increasingly come under the scope of financial services’ regulation. Though this can be seen as adding short-term burdens to Fintechs, these regulations also offer mid and long-term opportunities. The regulations aren’t in place just for fun, they exist to protect consumers. For Fintechs to become long-term sustainable and credible companies, this is something they need to be doing anyway.
The open banking regulations have emerged in parallel to tougher consumer privacy legislation. In Europe, GDPR is certainly the buzzword; and just as with open banking, we see similar trends around the world.
Open banking regulations aren’t something to be feared, and neither is consumer privacy legislation. These changes in regulation are all about doing the right thing. We’d argue that rather than be a burden, the legislation actually gives Fintechs a framework to guide their security thinking.
Read more on Verimatrix’s thoughts on GDRP and PSD2
Where should you focus?
Balance is key. The security required by Fintechs shouldn’t become an overloading burden. It’s about taking sensible steps while allowing your organisation to focus on the fun stuff”” building exciting products.
Our first recommendation is to build a “security as usual” culture from day one. It’s hard to make the change later, so make it everyone’s responsibility from the start to consider security as you build your products and services. This makes it a low level, non-disruptive activity rather than something forced upon the organisation down the road.
The second recommendation is to choose the right security. Take the time to understand what your valuable assets are and then choose Friendly Security solutions to protect them. Friendly Security means security that is trustworthy, mature and proven; but is also low impact to implement.
This is where Verimatrix can help. Our Software Shielding products are designed to protect the code, data and services in any mobile app you develop, all the while being easy and straightforward for your development teams to apply. We take this to extremes with our recently launched ProtectMyApp service.
These are exciting times for the Scottish Fintech industry; and it is critical that the community Fintech Scotland is building up establishes the right balance for long-term success.
The Importance of Innovative Fintech in Smart Cities
Photo by Kostiantyn Stupak from Pexels
According to statistics from the UN, 55% of the world’s population lives within an urban environment. This is expected to spike to 68% by 2050 and most of these metropolitan residents will be under the age of 29.
It’s no secret that today’s population, youth or otherwise, live fast-paced, digital lives with a sense of urgency about their day-to-day, which is only expected to heighten in time.
The only way to tackle modern-day challenges such as ageing infrastructures and to keep up with the expected trajectory of our hurried digital lives is to develop these urban territories into Smart Cities.
What is a Smart City?
Smart Cities were once a hot topic in the media, but despite the need for them becoming more prevalent, the media buzz and conversation has died down.
A Smart City utilises the latest innovations in IT and technology to enhance the efficiency and performance of modern metropolises, and improve the ease and quality of life for the inhabitants of the city.
The focus is on combatting the obstacles or downfalls that exist in modern society and urban environments as we know them. This includes using technological advances to better transportation, energy, utilities, waste management, resource consumption, public services, overall costs and much more.
The cost of implementing and enabling Smart Cities is expected to almost double within a four-year window. The International Data Corporation estimated Smart City costs in 2018 at US$81 billion, and this is set to drastically rise to US$158 billion by 2022.
What is the Vital Role of Fintech in Smart Cities?
Some of the best Fintech innovations were purposely designed to simplify procedures that have become unnecessarily complex over time – such as banking – or services that no longer satisfy consumer demands or needs; online shopping and international money transfers, for example.
Fintech start-ups always have the same end goal in mind. That is to provide consumers with a product or service that allows them to achieve the same outcome, but in less time, with fewer steps, for cheaper and with more transparency than previous solutions.
Whilst there are many benefits of Fintech in a Smart City, two standouts are quicker and simpler payments make for happier residents, and better international transfers and banking broadens the city’s access to a global market.
How Some Cities are Using Fintech
London
The most glaringly obvious entry route into Fintech for the city of London is with their transport systems.
Transport for London (TFL) had a full digital shift across all transport systems in July 2014, and the organisation has been a cashless operation ever since. Since the switch to contactless payments only, TFL has become more efficient with far fewer delays, cheaper journeys and made the process of boarding much faster for passengers.
Singapore
Fintech is central to Singapore’s ambitions to become a Smart Nation with a “Smart Financial Centre” at its heart. Part of the country’s continued efforts to achieve a Smart Financial Centre includes using innovative technology to create new opportunities, increase efficiency and better manage the country’s financial risks. Singapore also strives to eventually become a cashless nation.
Estonia
Estonia is possibly the most forward-thinking in their approach to becoming a Smart City thus far. They have abandoned traditional methods of identification and they now offer government-supported digital identities. The E-Estonia movement has been linked to many of the country’s financial institutions and companies to provide easy and convenient banking services to residents.
While we still might be some years away from our first fully Smart City, many are definitely making waves and on the right path to becoming truly smart.
A common thread between each advanced city that is leading the way for others is their use of Fintech. Incorporating innovative Fintech is a must in order to become a Smart City, it enables easy international business, makes daily life more convenient for residents and encourages the efficient, economical and eco-friendly operation of a nation.
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