Investment Week | Why we need a female lens to design fintech solutions for female clients
Technology is a game-changer for the investment industry – a statement of the obvious.
Because technology is accessible for the majority of people, it opens up opportunities that have not been available to many before. For sure, technology has the potential to democratise who can invest. But it also has the potential to allow us to decide how and where to invest.
However, despite the explosion of fintech solutions – including a plethora of investment apps – is technology really delivering as expected?
Our vision of leveraging technology to broaden access to financial services is certainly admirable but is it happening in practice? The harsh reality is that men dominate the fintech industry – a recent report from Deloitte revealed that fintechs with female founders or co-founders comprise only 12.2% of the total start-ups.
Fintech solutions run the risk of being largely designed by men, for men, possibly leaving many female investors out in the cold.
Women and the financial industry – already a fractured relationship
Historically, the financial industry has done a poor job at connecting with its female clients. Many women report feeling disengaged from personal finance and often patronised or talked down to by banks and financial advisors.
Research indicates that financial confidence can also be an issue, with too many women having the self-perception that ‘investing is not for them’. This comes as no surprise when you look at the way that both the industry and mainstream media communicate with women about money. Studies indicate that we often portray women as excessive spenders, in need of guidance to help them save and restrict.
All of this matters because women are not investing to the same extent as men, saving less for retirement and parking more in cash.
The gender investing gap results in a significant financial shortfall in the longer term. Of course, the gender pay disparity compounds the shortfall, but it also means that women are missing out on making the money they do have work better for them. Women end up having less wealth and retiring on much less than men. It is worrying when you look at the numbers – for example, in the UK, a woman’s pension pot is expected to be two-thirds that of a man.
Technology to the rescue?
The good news is that we can use technology to turn the situation around.
In particular, fintech can offer us a pathway to connect and communicate with women in different ways from the past. While a broad range of solutions are called for to close the gender investing gap, technology is a core enabler.
To get there it is imperative that we employ a female lens when designing tech-based investment solutions for female clients. We need to customise investment products and services that fit best for what women are looking for today.
Pink-washing simply will not cut it.
A good example is sustainable investing. We know that women care about where their money is invested and now have overwhelming evidence that women are highly motivated to think about impact and non-financial returns in their investment decisions. Research from Moxie Future found that 83% of women surveyed care about where their money is invested, while 69% of women surveyed feel a sense of urgency to invest responsibly.
This presents the industry with an important opportunity to develop tailored products and services that address this emerging trend.
Done right, tech can support financial experts in demystifying sustainable investing, as well as making it easier and more affordable for female investors to build and manage their sustainable investment portfolios.
One good thing to come out of the pandemic is that many women are more focused on their financial futures.
A survey on women and money from UBS found that 63% of women felt that Covid has affected how they think about money, and they’re more likely to discuss issues such as financial reviews and investing with their spouses and children.
Reflecting on this trend, and with women now owning over a third of the world’s private wealth, their direction of travel has the potential to completely reconfigure the investment industry.
This requires us to listen more closely to women’s investment needs and preferences, rather than using a male lens as default, and reflect this in the tech platforms that we develop. If we do this well, we have an exciting opportunity to close the gender investing gap – and this is a prize worth chasing.
Jessica Robinson is a leading expert on sustainable finance and responsible investing, and author of Financial Feminism: A Woman’s Guide to Investing for a Sustainable Future
ORIGINALLY PUBLISHED ON INVESTMENT WEEK AND REPRODUCED WITH PERMISSION.