Are compassionate Fintech leaders becoming an endangered species?

The coming of Age of Fintech is a trendy topic already. Ghela Boskovich animated it brilliantly at Finovate London in March, and Theo Lau also covers it in the latest OneVision episode discussing with Raf De Kimpe ahead of the July Fintech week in London.

Fintech as an Employer has its own report by CFTE. The sector employs close to 300k people (as of the end of 2021) and at that time, there were 40,000 open positions from the top 225 fintech companies.

The war for talent has been well documented in the tech industry and as the CFTE Fintech job taxonomy report shows most of the Fintech profiles have a much larger tech skill set requirement rather than a Finance one.

Now FREEZE! Freeze most Fintech hirings. It is part of the business cycle. But as my father used to say to me when I was a teenager `it’s not what you do that matters but how do you do it` (referring to my dating practices).

Earlier this week Coinbase announced layoffs for 1100 employees — that is 18% of its workforce. Employees found out about their termination when they realized that they were locked out of all of the internal company systems. How can you and I, argue against the Coinbase insider statement `we have been led by children`.

Mismanagement in grown-up fintechs is on the rise. Coinbase was on track to grow its workforce to 6000+ people from 1250 in January 2021. This is a fivefold increase in less than 1.5 yr. Fast forward to today and this is abruptly reversed within less than 2 months. Hiring is frozen and over 1000 people are laid off. Without any proposal for a voluntary exodus, and with Tweets from the COO like “Quit and find a company to work at that you believe in!” as employees launched a petition to remove him.

The poor communication style of these layoffs that completely lacks empathy, reminds me of Revolut`s mishaps that sadly become a Fintech employer to look up to as to How not to Treat your employees.

The Coinbase layoffs follow an earlier announcement this month about the hiring freeze coupled with a company decision to rescind existing job offers. Where is any thread of compassionate Digital or in-person communication?

Revolut`s poor employee treatment, apparently also included bullying and `get shit done` culture, and an extreme employee turnover rates. During a specific 6month period in 2020, over half of the new employees hired quit.

Later that same year, insiders reported that several employees were pressured to voluntarily quit and therefore forego any severance packages that they maybe entitled to.

Still, I believe that keeps the crown up to now and beats Revolut and Coinbase in poor management communication towards employees. For those that have forgotten already, CEO fired 900 employees over Zoom and subsequently laid off another 3,000 workers (total workforce was around 10,000). As a result, the CEO was placed on leave.

Just recently, I highlighted a 2021 American Banker article that listed the Best Fintech places to work for and their 2022 updated list. If you look at the long Fintech list (50 in total), you don’t find many large Fintech names. Most Fintech employers that make the list, employ less than 500 people. Examples of such Fintechs of the c. 500 size that qualify are MX, Alkami, Cross River, Plaid. Larger size Fintechs are Envestnet, Upgrade, United Wholesale Mortgages, Jack Henry Associates.

For 2022, No 1 employer was Mpower Financing with 140 employees focused on student loans. For 2021, it was IntraFi Network a Banking tech provider. These rankings are all focused in the US market.

In Europe, Sifted EU publicized Employee satisfaction rankings for London Fintechs based on average scores publicized by Glassdoor in 2020. Rankings of course include a package of benefits and other metrics in addition to management ratings.

These rankings confirm Revolut`s poor rankings and also show that there are Large private fintechs like that rank very high, so it is not the size that makes it challenging to manage people and relationships. was valued (based on their last fund raised in Jan 2022) at $40B and according to Craft data, they employ over 1,800 people. Wise also employs c. 2,200 employees too and ranks high and was included also in the US-focused rankings of AB. Public employee data on Revolut is not up to date. Craft and others report c. 2,150 employees but as of Dec 2020.

Another Fintech employee ranking of the 2018 Forbes Fintech 50 was shared by efinancialcarees and compares them to Goldman Sachs and Deutsche Bank rankings. GS has a 3.9 ranking which is the same as Adyen and higher than Paypal, Credit Karma, Avant, Prosper, and Sofi. DB has a 3.3 ranking same as Markit, Lending Club, and GreenSky which is at the bottom. Remember these are rankings are after the 2016 Lending Club scandal and the governance struggles of the company. In 2018, nobody realized what Robinhood was up to behind the scenes. Alphacution first published Robinhood order flow figures in Q1 of 2019. Robinhood had around 3,800 employees as of Dec 2021 (sources, Craft, Owler, CNBC) and has announced 9% cuts to date. article

Just to put things in perspective, Alipay has around c. 3,000 employees and Paypal has over 30,000 employees.

In these challenging times, grown-up Fintechs need to demonstrate that their management has at least average emotional intelligence and can find better ways to take care of their employees. This goes beyond the financial benefits that may be included in employee compensation packages. It is more about creating a sense of community at work, a space to be heard, an alignment around the top values of the leaders.

Fintech leaders need to demonstrate that they are able to lead in a different way and as Duena Blomstrom would say, shift away from Command & Control. The ability of Leaders to communicate effectively is extremely important.

It is time for Fintech innovation to go beyond the tech stack, the user experience, the business model, and into the leadership style.


Coinbase Layoffs

How not to treat your Employees, Revolut

Revolut Employment Coronavirus

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