Over the past few years, we have seen the rise of fintech products specifically aimed at otherwise underrepresented groups.
Daylight is an American neobank designed for the LGBTI+ community, in which 53% struggle to maintain regular savings – despite an estimated $1 trillion purchasing power in the United States. Majority, another US neobank, is built and designed for migrants to help them overcome the difficulties associated with opening an account in the US In the EU and UK, Monese, Emerald Life and Wahed are all examples of fintechs that aim to serve underrepresented groups.
It’s no different when it comes to female-focused fintech products. From insurance to financial management and expenses, European and Silicon Valley VCs are increasingly interested in what is specialized financial products for women have to offer.
But do women need or even want to their own financial products? Isn’t money something that should be approached in a gender-neutral way? As the co-founder of a financial education platform focused on financial empowerment for women and non-binary people, these are questions I’ve been asked a lot.
This change can only happen when women are no longer seen as a “niche” audience, but are instead recognized as agents of change.
Right now, fintechs are made for men
As it stands, fintech is an industry built by people, for people. And while this may or may not be a conscious effort on the part of leaders, it is undoubtedly a byproduct of a systemic lack of diversity across the tech industry as a whole. Women just make up 30% of fintech staff, and when you get to leadership, that picture gets even worse. According to Atomic. The numbers are much worse for businesses run by Black and Latina women.
This lack of diversity ends up influencing the product. Any good tech company knows the power of user research to refine and optimize your product. But if your product is designed for the male lived experience, it will attract more male customers and therefore – yes, you guessed it – your user experience data – will also be biased.
A recent study on women’s experience in investing by investment management firm BNY Mellon found that nearly nine in 10 (86%) asset managers say their default client – the person they automatically target when developing and communicating products – is a man. Similarly, “three-quarters of asset managers (73%) say their organization’s investment products are primarily aimed at men, suggesting they focus on benefits and features that typically appeal to men.” more men than women. »
With the current status quo, women are simply not considered a target audience. As Caroline Criado Perez says in her book “Invisible women“, “The result of this deeply male-dominated culture is that the male experience, the male perspective, has come to be seen as universal, while the female experience – that of half the world’s population, after everything – is considered, well, niche.
Do women even need their own fintech products?
I have often been told — mostly men, I might add — that money is not gendered. It is a subject that affects us all in the same way.
Unfortunately, this is far from the truth. Money is gendered because, frustratingly, women’s and men’s experience of the world is different.
Sallie Krawcheck is the founder of Ellevest, the American investment platform for women. she identified six money gaps that persist – – including gender gaps in wages, debt, investment, finance, unpaid work issues and the “pink tax” (the higher cost of consumer products targeting women). Simply put, women face different financial challenges than men, so we lag behind when it comes to finances.
There is also the theme of financial education and confidence, best described in Starling’s Make Money Equal Campaign, who noted the wide disparities in the quality and extent of financial information disseminated in the mainstream media. While 73% of financial articles targeting men focused on investing, 90% of financial articles targeting women focused on spending less. We receive wildly different information and messages about finance.
Unfortunately, the fintech industry fails to recognize the differences between men’s and women’s financial experience, values, and motivations. This leads to a mismatch between women’s financial priorities (which may be more focused on long-term stability rather than short-term, risky financial gains) and what the financial services industry typically emphasizes.
The untapped market opportunity
If you’re an asset manager or work in fintech, failing to take a proactive and informed approach to increasing women’s engagement in investing means you’re missing out on a huge market opportunity. The same BNY study found that if women invested at the same rate as men, there would be at least an additional $3.22 trillion in assets under management with individuals today.
Plus, there’s a reason why women’s economic empowerment is one of the United Nations’ Sustainable Development Goals. Increasing women’s engagement is good for the planet and society. Women are more likely to make investments that have positive social and environmental impacts, meaning there would be an inflow of $1.87 trillion more capital to invest responsibly if women invested at the same rate as men.
That’s not to say there haven’t been (often zany) attempts to engage with women by the fintech community. But efforts are often based on outdated stereotypes or assumptions. In these types of campaigns, women are targeted as a homogenous group, rather than a highly diverse set of people with different needs, goals, and consumption habits. In what is labeled in user data as “women”, you also need to consider the unique experiences of non-binary people and ethnic minorities. Needless to say we are a diverse bunch!
In 2021, Revolut made headlines when it launched a campaign to engage its female audience by offering to cover the cost of menstrual care as part of their premium card membership. They received backlash for the mundane nature of the campaign, which didn’t really understand the reality of women’s experiences with money. I don’t think that’s so surprising, given that there are only two women out of Revolut’s 11 management team.
There is one area, however, where gender marketing has excelled: debt. The opportunity for gender-responsive marketing has been seized by companies like Klarna, which have seen huge market success. with its pastel pink logo and partnerships with brands like H&M & ASOS. When will fintechs offering the expansion of wealth, rather than diminishing it, seize the market opportunity?
The time has come
With the wealth being generated from the increase in financial opportunities born from cryptocurrencies, now is the time for investors, founders and fintechs to start prioritizing building a female-centric fintech and empowering women. commitment of its users. Otherwise, we risk amplifying the monetary gender gap for generations to come. Coin Dance, a company that tracks and provides statistics on bitcoin users, keeps a regular eye on the gender balance of the bitcoin community, noting that women make up less of 15% investors.
The answer to women’s engagement in investing does not lie in outdated gimmicks or pinkwashing. Women must be integrated into the foundations of a business and prioritized by teams motivated to create financial products that truly reflect the unique needs and attitudes of women. At the very least, it’s about connecting with this very diverse audience by understanding what motivates women to invest and what type of communication they respond well to.
This change can only happen when women are no longer seen as a “niche” audience but instead are recognized as agents of change. For this to happen, there needs to be a significant structural and cultural shift in every element of the fintech industry, from investment to user copy.
Concrete measures to attract more women in fintech
- Include women in your product, not just your marketing plan. Make sure women and marginalized genders are an equal segment of your user data. Proactively research user experience with users and interview potential customers from diverse ethnic and socio-economic backgrounds.
- Check the language of your product and external communications. Is it gendered?
- Diversify your teams to expand your pool of potential customers. Your product is partly a reflection of your teams. Set OKRs to make your team more inclusive within your teams (not just marketing) as a priority.
- Ask about the financial opportunity. By not prioritizing female-focused fintech, you are missing out on an underserved market with a growing appetite for financial products and purchasing power.
- Bring more women into your VC team. The gender composition of investment decision makers has a significant impact on the allocation of investment capital. Paving the way for change.
- Express your opinion. As a consumer, you have a lot of power. If you notice gendered language, gender stereotyping, or a significant lack of diversity in your product, report your feedback to Customer Service. In the world of customer-centric products, this goes a long way.
- Support fintechs that are leading the way. There are some great new retirement, investing, and money management platforms out there that are making inclusivity a priority. Try them.
I wish money wasn’t gendered the way I wish the world was colorblind, but our societies and institutions have biases – unconscious or not. Until that’s not the case, we need more fintech products designed for women, by women.