Over the past few years, we’ve seen the rise of fintech products that are specifically targeted at otherwise underrepresented groups.
Daylight is a U.S. neobank built for the LGBTI+ community, in which 53% struggle to maintain regular savings — despite having an estimated $1 trillion spending power in the U.S. Majority, another U.S. neobank, is built and designed for migrants to help them overcome the struggles associated with opening an account in the U.S. In the EU and U.K., Monese, Emerald Life and Wahed are all examples of fintechs that aim to serve underrepresented groups.
It’s no different when it comes to fintech products focused on women. From insurance to financial management and spending, European and Silicon Valley VCs alike are increasingly interested in what specialized women’s financial products have to offer.
But do women need or even want their own financial products? Isn’t money something that should be approached gender-neutrally? As the co-founder of a financial education platform focused on the financial empowerment of women and non-binary people, these are questions I’ve been asked a lot.
This shift can only happen once women are no longer seen as a ‘niche’ audience but rather are recognized as agents of change.
Right now, fintechs are built for men
Looking at the current state of affairs, fintech is an industry built by men, for men. And while that may or may not be a conscious effort from leadership, it’s undoubtedly a byproduct of a systemic lack of diversity throughout the technology sector. Women make up to just 30% of fintech staff, and when you get to leadership, that picture gets even worse. Just 1.1% of funding went to women-led businesses in 2021, worse than 2020, according to Atomico. The figures are significantly worse for businesses led by Black and Latinx women.
This lack of diversity ultimately influences the product. Any good technology company knows the power of user research in refining and optimizing your product. But if your product is made for the lived male experience, it will attract more male customers and so — yep, you guessed it — your user experience data – will also be biased.
A recent study into women’s experience of investing by investment management firm BNY Mellon found that almost nine in 10 asset managers (86%) say that their default customer – the person they automatically target when developing and communicating products – is a man. Likewise, “three-quarters of asset managers (73%) state that their organization’s investment products are primarily aimed at men, suggesting that they focus on the benefits and features that generally appeal more to men than women.”
With the current status quo, women are simply not seen as a target audience. As Caroline Criado Perez puts it 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 global population, after all – is seen as, well, niche.”
Do women even need their own fintech products?
I’ve often been told — primarily from men, I should add — that money is not gendered. It’s a topic that affects us all in similar ways.
Unfortunately, this is far from the truth. Money is gendered because, however frustrating, women’s and men’s experience of the world is different.
Sallie Krawcheck is the founder of Ellevest, the U.S. investment platform for women. She identified six money gaps that persist – – including gender gaps in wage, debt, investing, funding, issues with unpaid labor, and the “pink tax” (the higher cost of consumer products targeting women). Put simply, women face different financial challenges compared with men, so we’re on the back foot when it comes to finance.
There is also the topic of financial education and confidence, best outlined in Starling’s Make Money Equal campaign, which noted the vast disparities in the quality and breadth of financial information served in mainstream media. While 73% of financial articles targeting men focused on investing, 90% of the financial articles targeting women focused on spending less. We are receiving wildly different information and messages about finance.
Unfortunately, the fintech industry consistently fails to acknowledge the differences between men’s and women’s experience, values and motivations when it comes to finance. This leads to a disconnect between women’s financial priorities (which may be more focused on longer-term stability as opposed to short, risky financial gains) and what the financial services industry typically emphasizes.
The untapped market opportunity
If you’re an asset manager or working within fintech, not taking a proactive and informed approach to increase 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 extra $3.22 trillion of assets under management from private individuals today.
Furthermore, there’s a reason why women’s economic empowerment is one of the UN’s 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 that there would be an influx of $1.87 trillion of additional capital into investing responsibly if women invested at the same rate as men.
It’s not to say there haven’t been (often cringeworthy) attempts to engage with women by the fintech community. But efforts often rest around outdated stereotypes or assumptions. In these sorts of campaigns, women are targeted as a homogeneous group, rather than as a highly diverse set of people who have different needs, goals and spending habits. Within what is labeled in user data as “women,” you need to also take into account the unique experiences of non-binary people and ethnic minorities. Needless to say, we’re a diverse bunch!
In 2021, Revolut caught headlines by launching a campaign aimed to engage their female audience by offering to cover the cost of period care as part of their premium card membership. They received backlash for the trivializing nature of the campaign, which failed to truly understand the reality of women’s experiences with money. I don’t think this comes as much of a surprise, given there are just two women out of the 11 members on Revolut’s senior leadership team.
There is one area, however, where gendered marketing has excelled: debt. The opportunity for gendered marketing has been seized by buy now, pay later companies like Klarna, which experienced 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, catch on to the market opportunity?
Now is the time
With the wealth being generated from the rise in financial opportunity born from cryptocurrencies, now is the time for investors, founders and fintechs alike to start prioritizing the building of women-focused fintech and in the engagement of its female users. Else we risk amplifying the gender money gap for generations to come. Coin Dance, a company that tracks and provides statistics on bitcoin users, keeps a regular tab on the gender balance of the bitcoin community, noting that women make up less than 15% of investors.
The answer to engaging women in investment isn’t found in outdated gimmicks or pinkwashing. Women need to be built into the foundations of a business and prioritized by teams that are motivated to create financial products that truly reflect women’s unique needs and attitudes. At the very least, it’s about forming a connection with this highly diverse audience by understanding what motivates women to invest and what sort of communication they respond well to.
This shift can only happen once women are no longer seen as a “niche” audience but rather are recognized as agents of change. For this to happen, there must be a significant structural and cultural shift from every element of the fintech industry, from investment all the way through to user-facing copy.
Actionable steps to bring more women into fintech
- Make women part of your product, not just your marketing plan. Ensure women and marginalized genders make up an equal segment of your user data. Proactively seek out UX from female users and interview female customers and potential customers from a range of ethnic and socioeconomic backgrounds.
- Audit the language across your product and external-facing communications. Is it gendered?
- Diversify your teams to widen your pool of potential customers. Your product is in part a reflection of your teams. Set OKRs to make your team more inclusive across your teams (not just marketing) as a priority.
- Get clued up on the financial opportunity. By not prioritizing women-focused fintech, you’re missing out on an underserved market with a growing appetite for financial products and spending power.
- Bring more women into your team of VCs. The gender composition of investment decision-makers significantly impacts the allocation of investment capital. Lead the way for change.
- Voice your opinion. As a consumer, you have a lot of power. If you notice gendered language, gender stereotypes or a significant lack of diversity in your product, give feedback to customer support. In the world of customer-centered products, this goes a long way.
- Support fintechs who are leading the way. There are some great new pension, investment and money management platforms making inclusivity a priority. Try them out.
I would love money to be ungendered in the same way that I would love the world to be colorblind, but our societies and institutions have bias — unconscious or otherwise. Until that’s not the case, we need more fintech products built for women, by women.