Exploring the drivers of investment in Fintech: Board composition and home bias in banking

This paper explores the determinants of banks' investment in fintech innovation, deepening the role of the board of directors and country home bias. Using board data of the listed banks in the US, EU and UK and fintech companies' investment rounds, we create the home bias variable by measuring the distance in kilometres separating the bank and fintech's headquarters. We find two main results. First, boards with higher female presence, higher members' network and younger directors are more likely to invest in fintech companies. Second, banks tend to invest in fintech companies that are geographically closer to them, showing the existence of the home bias in the fintech innovation investment. Overall, the paper suggests that bank board structure and geographic position of target companies are relevant factors of fintech investments.