Imagine that a company had the option of reaching 100% of the market but decided to cut that number by half and so lose 50% of the profit. While it might seem absurd, that is what the banks are doing in ignoring women; a market segment shut off from finances and the products and services offered by the sector, but that would like to take control and show that investing in women is profitable.
Men and women are very different when it comes to managing their money. For a start, women live longer than men, but earn less, in fact women earn almost 24% less than men. That means they save less for their retirement and, what’s more, they have different insurance needs. This situation affects financial planning: women are more about debit (managing what they have) than credit; they are more likely to have cards from shops they usually frequent; they take out more loans for studying and, when they are mothers, they prioritise the family.
"Women make up 52% of current account holders in banks and yet they do not feel served, understood or satisfied"
"It is paradoxical that women are responsible for 80% of purchasing decisions and make up 52% of current account holders in the world and yet they do not feel served, understood or satisfied by financial services or banks," says Gemma Cernuda, CEO of Ellas Deciden and author of #SheBanking, a White Paper developed jointly with the Strands company, which lays out everything that women want that the banks do not know.
A sector that is not ours
Why does it feel as if we are playing away from home? According to Cernuda, the female population feels disaffected by the culture, the jargon and the financial world in general. “The banks do not connect with women, they have a masculine approach; when they talk to a woman about finances, there is a powerful reaction of rejection.”
Commission, debt, interest, risk, credit, APR, loans, product... These are some of the words negatively associated with banking. "Words are very important, they are the main tool we have to communicate. We prefer they say 'take out' or 'put in' money, rather than 'withdraw' or 'deposit' cash," the author of the report argues.
Cernuda: "We prefer they say 'take out' and 'put in' money, rather than 'withdraw' or 'deposit' cash"
Don’t talk to me, listen to me
So, what can financial institutions do so that 51% of the population feels included in this sector that seems so masculine? Say nothing, and listen.
Relationship banking is a model that is much closer to listening to the client. You have to be able to put names and faces to the finances you are managing. Women are fed up of how bank’s talk to them when trying to sell them products and services and they need to change their tone. I want to help you, not sell to you, Cernuda offers as an example, adding that the keys are trust and sincerity.
Women’s financial needs
Agile, simple and easy. That is what banking designed for women should be like. The digital solution has to bear in mind that women are looking for a long-term relationship with the brand and to be offered services according to what stage of life they are in, such as motherhood for example.
Grouping expenditure into categories, deciding what the spending limit in each category is, viewing savings objectives or a financial calendar are some of the proposals that women value most, according to the SheBanking study.
A women-friendly bank
There are currently more than 14 banks around the world that label themselves Women-Friendly and that identify themselves as a brand for women. Yet, do we want banks for women? "No, we want banks with a feminine touch, that take our priorities and needs into consideration, which are more human and closer to us," says the author.
This strategy does not mean painting banks pink and applying the Pink Tax, but rather making the company client-centric. According to Cernuda, the formula should put women at the centre of the conversation and that is only credible if there are women at the executive level.
There are more than 14 banks around the world that label themselves Women-Friendly and that identify as a brand for women
"The financial sector has been very responsive, now the talk needs to be applied in practice," says the consultant, who adds that it is "positioning that all financial institutions should acquire, because Women Mean Business."
Erik Brieva, CEO of Strands, a fintech partner with more than 600 banks as clients agrees: "Banking is already almost 100% digital, now we need to think and act in a more feminine way and establish more personalised relationships. Thus, it is essential to segment by group and women are a very broad group that should help us to transform the financial sector."
Banks are ready for the digital transformation. But what about the feminine revolution?