by Erin B. Taylor and Anette Broløs
Historically, few financial tools have been developed with women in mind or marketed to them directly[i]. Today, however, new financial services are appearing on the market that respond to practical everyday economic needs including design and marketing. Currency converters, financial management apps, investment apps, and alternative credit sources, are now being developed specifically for women, or primarily marketed to them. A plethora of websites, blogs and podcasts for women offer advice, information, and educational courses on finance. Many of these are community-based initiatives and aim to create a dialogue with women.
But do women really need their own financial services? What can these new fintech products offer women that gender-neutral products can’t? We explore these questions in two new publications. One is a book chapter called “Financial technology and the gender gap: Designing & delivering services for women” (in Malefyt and McCabe 2020), and an industry report called Female Finance: Digital, Mobile, Networked (EWPN/Keen Innovation 2020).
The financial gender gap exists for many reasons, including income inequality, women taking time off for child-rearing or caring for a family member, fewer investment opportunities for women, and the tendency for women to manage daily budgets while men tend to take care of long-term financial management[ii]. Lower (or different) financial literacy, lack of confidence in financial knowledge, and differences in investment behavior can limit women’s ability to achieve financial security[iii]. And in some areas of the world poverty, limited access to technology and legal restrictions hinder women’s access to financial tools and confidence in using them[iv].
However, to our surprise, we discovered that there is neither an overview of existing financial solutions offered to women, nor an overview of research on women’s engagement with their finances. Through our work as co-organizers of research activities within the European Women Payments Network (EWPN), we also noticed that industry professionals are not very aware of what the market in fintech for women looks like. Few professionals could name any fintech products designed specifically for women.
So we set out to discover what this market consists of, how extensive it is, what kind of women it serves (as well as where they’re located), and – most importantly – how fintech products claim to serve women. Along with the EWPN and Keen Innovation, we identified as many fintech products for women as we could. This is a very new field: most of the companies we found were founded during the last 5-10 years). The resulting report not only maps out these products, but also begins to analyse how they serve women in five areas: payments and credit, financial management, insurance, investment, and capital for entrepreneurs.
Common features in services for women
- Storytelling in a language that speaks to women's life contexts
- Accessible solutions that are digital and mobile
- Learning opportunities (blogs, support, "academies")
- Social features (mentors, events, networking, communities)
Through our analyses of the concrete product and service offering, we realized that women tend to engage with finances differently to men. They value financial services that understand their life situation (young professionals, young families with housing and children on their minds, single parents or women establishing their own company to allow more flexibility in their daily lives). They prefer services that are readily available, uncomplicated to use, and provide a fast overview of economic transactions and decisions. Women are increasingly investing money, and their investment decisions are often based on a broader range of criteria than investment advisers usually take into account. They look to understand how their wealth can best be invested to ensure fulfilling their wishes over time, and tend to focus on social issues such as sustainability, local development and inclusion.
Indeed, this social aspect of finance is critical to understanding how women can differ from men. Women appreciate being able to work and learn with experts and like-minded people. We suspect that is a reason why Voleo, a new investment club app that allows users to interact, has 40% female customers while not even being directed particularly at women. Similarly, Nav.it, a money management app, tries to harness women’s preference for social proof to encourage women to engage more with their finances. The app’s founder, Erin Papworth, claims that women lack the “financial vocabulary” to talk about money in ways that are relevant to their lives and goals. The financial system is still geared towards men and tends to exclude women, who, Erin says in a
Nav.it podcast, are not confident discussing things like investing and compound interest. Thus the goal of the app is not only to help individuals manage their finances, but change the ways women engage with finances and build a system “that has the feminine experience integrated into the overall system”. Women’s socioeconomic situation is rapidly changing, she says, and women now have the “power of the purse” to effect broader change.
So, do women need their own financial services? The answer is both ‘yes’ and ‘no’. The financial gender gap is persistent across cultures and income groups. While financial services designed for women are unlikely to increase women’s incomes and close the gap, they can provide some very useful tools to help women manage their finances better and a way that suits their preferred modes of engagement. Women need their own financial services because existing solutions do not cater to their economic needs and expectations. And delivery is just as important as design: a financial tool may be theoretically perfect for women to use, but if it isn’t delivered in a way that speaks to women’s needs it will likely fail to reach its target market.
However, we should warn that women are a very diverse group and experience both the financial gender gap and financial services themselves in diverse ways. Women’s financial practices therefore cannot be studied without taking into account the surrounding cultural, economic, legal and educational factors that make up the context of women’s lives. Moreover, what counts as “women’s lives” is in a constant state of change. For example, women’s investments are rising much faster that men’s. Women increasingly start their own companies or raise crowdfunded capital for their projects. Family patterns and job circumstances are also changing fast. When designing financial services for women we cannot treat women as a static, homogeneous group. We need nuanced research to feed into the intelligent design and delivery of financial services.
There is plenty more to be done. We plan to develop new empirical research on women’s engagement with finances, covering issues such as how women engage with finances on the move, what services and products they use to grow their wealth, and how the digitization of ‘financial inclusion’ services such as microfinance impacts women. We particularly encourage companies and researchers to engage with women in practice by providing well-designed research that can contribute to the design of financial services that fit with women’s preferences, values and contexts.
We also plan to update the overview of financial services for women to follow progress and changes in the market over time. A more complete analysis of financial services from different perspectives, focusing on factors such as economics, digital development, education, history, religion, consumer behavior, and more would be useful to build a more nuanced picture of women’s needs and the differences between women.
And, most importantly, we need to be having broader conversations about these issues. Join us at the EWPN Research Network LinkedIn group to share your own ideas with industry professionals and academics who are working on these issues. You can also share your favorite books, articles, and white papers on the subject, or suggestions for companies we should look into and to include in our overview of the market. Above all, let us know if you agree with us or not. The more diverse and dynamic the conversation, the better placed we will be to understand why, and under what circumstances, diverse women may need their own financial services.
Endnotes
i Burton, Dawn. 1995. Women and financial services: Some directions for future research. International Journal of Bank Marketing 13(8): 21-28; Roderick, Leonie. 2017. Financial services brands ‘ignoring’ women in advertising. Marketing Week, 17 October, https://www.marketingweek.com/financial-brands-ignoring-women-ads/
ii E&Y. 2017: Banking on Gender Differences: Similarities and Differences in Financial Services Preferences of Women and Men in a Digital World; Hira, Tahira K. 2008. Gender differences in investment behaviour. In Handbook of Consumer Finance Research. Jing Jian Xiao, ed. 253-270. New York: Springer; Liébana-Cabanillas, Francisco José, Juan Sánchez-Fernández, and Francisco Muñoz-Leiva. 2014. Role of gender on acceptance of mobile payment. Industrial Management & Data Systems 114(2): 220-240; Morsy, Hanan, and Hoda Youssef. 2017. Access to Finance–Mind the Gender Gap. EBRD Working Paper No. 202.
iii Almenberg, Johan and Anna Dreber. 2015. Gender, stock market participation and financial literacy. Economics Letters 137 (2015): 140-142; Bannier, Christina E. and Milena Schwarz. 2018. Gender-and education-related effects of financial literacy and confidence on financial wealth. Journal of Economic Psychology 67: 66-86; Driva, Anastasia, Melanie Lührmann, and Joachim Winter. 2016. Gender differences and stereotypes in financial literacy: Off to an early start. Economics Letters 146: 143-146.
iv Morsy, Hanan, and Hoda Youssef. 2017. Access to Finance–Mind the Gender Gap. EBRD Working Paper No. 202; Servon, Lisa. 2017. The Unbanking of America: How the New Middle Class Survives. Houghton Mifflin Harcourt.
