Fintech is a sector well known for rapid growth and innovation, indeed that’s often why people have moved from tradfi to tech. However, the industry is currently weathering a challenging storm brought about by rising interest rates and jittery investors (although of late, there appears to be some light at the end of the tunnel). In years past, many fintech companies have relied heavily on external funding to fuel their expansion and, as mentioned, along the way attracting employees who sought refuge from the low-growth traditional finance industry. Fintech professionals are curious, often optimists, and very driven. In this turbulent environment, fintech leaders face the critical task of motivating and inspiring their teams to stay resilient, adapt to change, and to continue driving their businesses forwards when results may not be so obvious.

Fram has worked with a broad range of fintech businesses, and few parts of the industry have been immune from the slowdown. Fintechs have often been used to high growth driven by investor confidence and an appetite to invest in the next big thing. However, recent changes in market conditions, including rising interest rates and shifting investor sentiment, have created uncertainty and put pressure on fintech organisations. This in turn has created an uncertain environment for fintech employees.

In some ways, fintech isn’t a new industry anymore and the industry now has many experienced managers. However, some will have not worked through a downturn before, and experienced managers may need to brush up on their “leading through a downturn” skills after years of breakneck growth. Our experience of slowdowns is that teams feel them even if they aren’t aware of the full financial picture. This can cause huge levels of distraction and, understandably, uncertainty, and often gossip. Leaders need to be as open and transparent as possible and the current state of the business, challenges, and strategic adjustments required. This helps employees understand the broader context and fosters trust. Individual catchups, team meetings, and weekly or monthly status emails all help. It may also be a good time to prioritise well-bring with emotions being heightened at this difficult time.

It’s a good time to remember that people are often attracted to tech firms because of the purpose and innovation. Remind your team of the fintech's original mission and long-term vision. Emphasize the impact the company is making in revolutionising finance and disrupting the status quo. A reminder that the market has changed, but the mission hasn’t. Connecting employees to the greater purpose of their work can rekindle their motivation and refocus them. Encourage your team to think creatively, explore new solutions, and adapt to changing circumstances. Even during downturns, innovation can lead to unique opportunities and growth. Cross collaboration between teams and all employee grades will ensure that valuable information and best practice is shared.

In our role, we often meet people who lose faith in a firm during a downturn, as they feel their career has gone on hold. Now is a crucial time for investing in your team’s skill development. Offering training, courses, and opportunities for personal and professional growth not only improves individual capabilities but also shows your commitment to their long-term development. Also, whilst financial rewards may not be possible, focus on celebrating small wins and non-financial benefits such as flexible working or early Friday finishes.

We all know that the future for fintech is bright and the current environment is a phase. Key to capitalising on the recovery will be retaining and attracting the best people. Metrics in management are very important, but now is the time to double down on the human element of management while waiting for better times to appear.