Long reads

Demystifying the role of the fintech CEO

Hamish Monk

Hamish Monk

Reporter, Finextra

This series of articles looks to demystify the various C-level roles within fintech companies today – exploring the career paths taken by top managers, their critical skills, daily responsibilities, challenges, and even how the Covid-19 pandemic has impacted their understanding of running a successful business.

Widely used terminology for describing the group of a company’s most senior executives, the C-suite, refers to any title that starts with the letter C, for ‘chief’ – including, for example, chief executive officer (CEO), chief technology officer (CTO), or chief operating officer (COO). The C-suite works together to ensure a company is run efficiently and successfully.  

This first instalment of the C-suite Series examines the highest C-level role, and the face of the company – the CEO.

In many ways, the CEO is the most influential member of a company – especially if the company is in an early stage of development. However, reaching the CEO echelon within a fintech is no mean feat. The competition is fierce, and the skills required are extensive.  

Finextra’s interviews with the CEOs of SteelEye, Diligent, and Surepay (which you can read about in the coming sections) reveal that the role demands a raft of drive, vision, and expertise – although, surprisingly enough, not always within the financial services sector. The true indicator of a successful fintech CEO is a passion to solve customers’ problems – be they businesses or individuals – with easy-to-use, innovative technology.      

The formative experience

When it comes to small fintech businesses, the CEO is often also the founder or co-founder. Typically, a founder’s business idea comes from a formative experience – or even failure – in the individual’s early career.

This is certainly true for Matt Smith, CEO of data aggregation RegTech firm, SteelEye: “When I was 17, I left Canada, moved to the UK, and began working for the Great North Eastern Railways’ catering division. I was seconded in a programme to deploy an enterprise resource planning (ERP) system, which was being used to manage the inventory and the sales process across the company’s network. I made a big mistake at some point and wiped out the company’s entire UK inventory. To rectify my mistake, the company had to go through and manually re-insert all the inventory back into the system. The experience taught me the true value of data – its accuracy is everything.”

Armed with this perspective early on, Smith ultimately became the leader of SteelEye, which helps Tier 1 banks, wealth managers, asset managers, hedge funds, commodity companies, and brokers bring together both structured and unstructured data – providing services such as communication surveillance, trade surveillance, and regulatory reporting.

Brain Stafford, CEO of governance, risk and compliance company, Diligent, also turned failure into opportunity: “I started out as an entrepreneur and built an e-commerce company, for purchasing automobiles and working with car dealerships, during the dot-com boom. We grew to $100 million in revenue, and 350 people very quickly. But, when the dot-com bubble burst, so did my company. Speaking candidly, the company was probably more hype than substance – like many others during that era. Eventually, I sold the business and moved to McKinsey to learn how larger companies were successful – I was obviously bit short of that knowledge,” said Stafford.

Other CEOs, like David-Jan Janse, CEO and co-founder of multi-domestic payments specialist, SurePay, allowed the development of his businesses to be led by his own research: “When we were developing the product, Marcel Rienties [SurePay’s co-founder and chief product officer] and I went to the local train station and separately interviewed tonnes of people about online banking, and what the hurdles, if any, they were experiencing. I still remember all of those interviews by heart, and remain involved in SurePay’s success management interviews today. If you are a CEO that is new to a company, you will have missed those kinds of insights. Of course, you can learn it from a PowerPoint in a meeting, but it's important to witness that whole journey, as a fintech CEO.” 

Critical qualities and skills

So, how do such experiences crystalise with time, and give rise to the distinct set of qualities and skills necessary to be a successful CEO? This is not an easy question to answer – it depends on a fintech’s geography, line of business, and size. However, there may be some objective standards we can appeal to.

In an article titled ‘The New Path to the C-Suite’, Harvard Business Review pointed out the importance of entrepreneurialism and leadership skills for CEOs: “In examining hundreds of executive profiles developed over the past decade or so…and interviewing numerous top managers about the requirements for senior leaders past, present, and future, we have seen…the necessary skills are increasingly about strong communication, empathy, collaboration, and trust building.” In other words, ‘softer’ leadership skills are key to doing well at the top of the C-suite.

This sentiment was echoed by Smith: “Being a CEO is about being able to empathise with employees, clients, and partners. Understanding the pains people are going through, and responding constructively, is critical. I think being able to foresee future changes, such as when we can return to work, is useful too.”

“As a CEO, you are a generalist”, added Janse. “As for me, I know a little bit about everything when it comes to SurePay. And, actually, that has been my role from the start. But of course, where Marcel and I once did everything ourselves, we now have a team to work with. Today, I’m focussed more on managing the company, and building the organisation, instead of just building the product.”

So, while hard skills, such as software developing, are important when building a fintech, soft skills, such as entrepreneurialism, seem to become increasingly important for a CEO as the company grows.

Evolution of the CEO: Leading teams through the pandemic

Many CEOs have been forced to re-sharpen their skillset – and even add new tools to the box – in order to keep their businesses afloat during Covid-19.

“Before the pandemic, I mirrored the manager role; walking around an eavesdropping on coffee machine conversations, to see how people were interacting with each other,” said Janse. “When the pandemic hit, I had to ask myself how we could maintain those invaluable coffee machine conversations over Zoom. We decided to implement daily morning stand-ups to stay close to the team. At the end of the day, we scheduled cooldown sessions to discuss purely personal matters. Adopting that structure has been helpful in many ways.”

Arguably, the CEO of Diligent experienced an even more drastic shift in his daily duties, in the wake of Covid-19: “During the pandemic, my management responsibilities have included fixing breakfast for my kids, and taking them to school,” said Stafford. However, he added that leading during the pandemic created unforeseeable challenges. “In terms of the team’s wellbeing, you must be sensitive to the challenges staff face – being home alone in a small apartment, or being a parent dealing with kids not at school. Many people have lost loved ones over the course of the last, 12 or 16 months. It’s been an isolating time. So, being a good CEO has become about identifying ways to not just lead the business, but occasionally pick people's spirits up. That element is what makes the role of the CEO unique.”

Also speaking to the practical challenges created by COVID-19, Smith commented: “Would SteelEye have done better without the pandemic? Yes. Did we do well despite the pandemic? Yes. Did the shifts in the RegTech ecosystem, catalysed by the pandemic, help our cause? Absolutely. However, in practice, this world is built on personal relationships – not being able to directly engage with the team and clients definitely slowed things down.”

Challenges and rewards

Clearly, the pandemic has been a challenge for fintech CEOs, but the consensus seems to be that the stresses associated with leading a team through unchartered waters are far outweighed by the rewards.

“The most rewarding part about being a CEO is building teams, building awareness, building a brand, and getting people excited about the product,” said Smith. “My job has always been about ensuring people feel proud of what SteelEye is doing as a business.”

“Every now and then you have you have tough days, but you also have exhilarating days,” added Stafford. “The most rewarding part of the job is seeing the faces of our team when they’ve made a client happy, and seeing our products having a positive impact on the world. That’s the stuff that makes your day.”

David-Jan Janse, CEO of SurePay, shares this passion for his work: “The most rewarding part for me is our purpose-driven ethos. We truly want to help our customers, and beat the fraudsters. It’s in our DNA.”

The investor revolt

Indeed, the role of the CEO seems to be engrossing. When asked what his daily responsibilities at SteelEye are, Smith replied: “Everything. I am involved in sales, integrations, support, engineering, human resources, legal. I am the CEO – so, ultimately, I am accountable for everything.”

Stafford echoed this: “I lead our team of 1,500 people globally. I am involved in technology, sales, marketing, finance, human resources, the legal panel – and, ultimately, charting an ambitious direction for the company.”

Since CEOs often occupy such stressful and high-stakes roles, they are usually rewarded with high compensation packages. Yet, despite this, the tide seems to be turning when it comes to the board’s attitude toward CEO pay.

In recent weeks, a number of Financial Times pieces have been published, reporting on how the boardroom revolt against executive pay – particularly in the US – is reaching record numbers. “Many backlashes stem from plan changes to ensure bonuses were paid out during pandemic,” argues the article.

Commenting on the issue, Stafford pointed out how this trend is part of a wider change in how C-suite members, and their boards, operate: “We need to look at how the role of the boardroom has evolved in the last five to 10 years. Back then, board members would show up four times a year, have an in-person meeting, and then a couple of nice dinners. Over time, these gatherings, behind mahogany doors and smoke-filled conference rooms, of largely non-diverse groups of individuals, have evolved into super dynamic environments. I don’t think there is any FTSE 100 board member around today that doesn’t spend time every month, if not more frequently, keeping up to date with the company, or dealing with issues such as regulation, the environment, cyberthreats, political complexities, macro-economic trends, diversity and inclusion and more recently – the pandemic,” said Stafford. “Yes, CEO pay will be under pressure going forward, and compensation will be tied to more than just share performance of the company.” 

Arguably, then, the boardroom revolt at least indicates a growing progressive sentiment within corporations.

The gender disparity

As Stafford points out, another glaring issue to be tackled when it comes to the role of CEOs, is gender inequality.

“Historically, only men occupied top management positions in firms. Over the past few decades, this has changed a bit”, notes a 2020 Oliver Wyman report. However, women still “hold only 20% of executive committee positions and 23% of board seats. Among Fortune 1000 companies, 94% of chief executive officers are male, and just 6% employed are female CEOs.”

There are, however, initiatives underway seeking to tackle the issue. To learn more, read this Finextra article on the benefits of gender lens investing.
Looking to the future

While there is no defined route for reaching the top of the C-suite, having a strong vision and being passionate about delivering value to clients, of all shapes and sizes, is critical. In any case, graft, and even a brush with failure, is more useful than meets the eye.  

For the ambitious fintech CEO, the future is always synonymous with growth and improvement. “I believe the next 20 years, are going to be the era of stakeholder capitalism”, said Stafford. “Issues like climate change, sustainability, and diversity will start to matter more and more. Boards will increasingly set compensation targets for the C-suite that are tied to these non-financial metrics.”

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