Fear­less fin­techs: Women poised to in­herit the world as gen­der gap con­tin­ues to nar­row

The East African - - BUSINESS -

80 per cent of pur­chase de­ci­sions are at the dis­cre­tion of women. Ig­nore them at your own peril.”

Usu­ally at a fi­nan­cial con­fer­ence, the line for the women's room is the shorter one.” — Over­heard at “Fear­less in Fin­tech”

In­deed, a jest made to pass the time in the long ladies' room line dur­ing this past Mon­day's “Fear­less in Fin­tech” event sadly epit­o­mises fe­male rep­re­sen­ta­tion from both the sup­ply and de­mand sides of the fi­nan­cial in­dus­try.

Per­haps most as­ton­ish­ingly, while the nee­dle has moved in ab­so­lute terms, the gen­der gap in terms of rel­a­tive ac­count own­er­ship hasn't budged, and has been firmly planted at 7 per cent since 2011. Nearly one bil­lion women re­main un­banked glob­ally.

There are a num­ber of struc­tural bar­ri­ers that in­hibit women's full par­tic­i­pa­tion in fi­nan­cial ser­vices. In the ab­sence of ef­fec­tive in­ter­ven­tion from fi­nan­cial in­sti­tu­tions or gov­ern­ment bod­ies, there is space abound for a new ac­tor to step in as the story's new pro­tag­o­nist.

Could that be Fin­tech? Fin­tech start-ups have the op­por­tu­nity to pop­u­larise, com­mer­cialise and in­sti­tu­tion­alise the idea of the fi­nan­cially em­pow­ered woman by widen­ing her ac­cess to fi­nan­cial ser­vices and usurp­ing the nar­ra­tive over her self-per­cep­tion.

Fi­nan­cially ca­pa­bil­ity

First, let us get the facts straight. 72 per cent of men world­wide have bank ac­counts in com­par­i­son with 65 per cent of women. In de­vel­op­ing coun­tries, this seven-point gap ex­pands to a nine-per­cent­age point dif­fer­ence. The num­bers for fi­nan­cial lit­er­acy are worse (for both par­ties). While only 35 per cent of men are fi­nan­cially lit­er­ate, women have an even poorer show­ing at 30 per cent.

The strength­ened fi­nan­cial in­clu­sion of women — here de­fined as ac­cess to sav­ings, loans, trans­fers and more through ei­ther a for­mal in­sti­tu­tion or mo­bile money provider — cor­re­lates with more in­de­pen­dence, a re­duc­tion in fe­male poverty and bet­ter con­trol over their eco­nomic re­sources.

In­vest­ments in fi­nan­cial lit­er­acy then en­sure that prod­ucts are ap­pro­pri­ately and prop­erly lev­er­aged. Busi­ness case con­sid­er­a­tions for such ini­tia­tives are not far be­hind.

Master­card re­cently cal­cu­lated that 80 per cent of pur­chase de­ci­sions are at the dis­cre­tion of women, while 75 per cent of the world's wealth will be in­her­ited by them in the next 20 years. Ig­nore women at your own peril.

Bar­ri­caded: De­vel­op­ing coun­tries in the spot­light

In de­vel­op­ing coun­tries, ob­sta­cles to achiev­ing mean­ing­ful gains for women in fi­nan­cial in­clu­sion range from phys­i­cal lim­i­ta­tions to cul­tural ones. Phys­i­cal bar­ri­ers — like the dis­tance to and from the bank branch — ren­der us­age dif­fi­cult.

This is com­pounded by a lack of agency in lo­ca­tion choice.

In 31 coun­tries, women are pre­dom­i­nantly ex­cluded from the de­ci­sion-mak­ing process of where do­mes­tic roots are put down. Phys­i­cal bar­ri­ers can be ame­lio­rated by mo­bile money ser­vices, but a gap per­sists in mo­bile con­nec­tiv­ity as well.

On av­er­age, women in de­vel­op­ing coun­tries are 26 per cent less likely to use mo­bile In­ter­net and 33 per cent less likely to use mo­bile money.

Out­right le­gal de­ter­rents, en­cap­su­lated by 943 gen­dered poli­cies span­ning 173 in­ter­na­tional economies, are not only un­sightly and dis­crim­i­na­tory but im­pact on fe­male fi­nan­cial in­clu­sion rates.

In 10 of those economies, ac­quir­ing iden­ti­fi­ca­tion is not equal-op­por­tu­nity, and in two of them, women are ex­plic­itly barred from open­ing an ac­count. Norms around sex­ism and misog­yny are also of­ten cod­i­fied into the busi­ness prac­tices and op­er­a­tions of fi­nan­cial en­ti­ties.

Should it be any sur­prise that women rou­tinely feel dis­com­fort when deal­ing with a male bank agent?

More of the same in de­vel­oped economies

The sup­ply and con­sump­tion of fi­nan­cial ser­vices by women, while still an is­sue, is less pro­nounced in de­vel­oped economies. In­stead, the fight has mi­grated to the gen­der im­bal­ance of the work­force (es­pe­cially in ex­ec­u­tive or man­age­ment po­si­tions).

Women hit the ceiling ear­lier and are passed over for men, in part due to the gen­der con­fi­dence gap.

The con­fi­dence gap demon­strates that men over­es­ti­mate their abil­i­ties while women con­versely un­der­es­ti­mate their own.

Due to this dis­crep­ancy, male in­ter­vie­wees are per­ceived as more con­fi­dent in their ca­pac­i­ties than fe­male com­peti­tors, even when the fe­male can­di­date has years more of ex­pe­ri­ence un­der her belt.

Women, too, en­gage in riska­verse be­hav­iour more of­ten than men, and there­fore re­quire more data (ergo, some­times more time) to ar­rive at an ev­i­denced-based con­clu­sion.

A study by Lus­gardi and Mitchell found that women will an­swer “I do not know” more fre­quently than men.

Men, in con­trast, will at­tempt to make an ed­u­cated guess, even if they have lit­tle to no prior knowl­edge over a sub­ject.

Ex­ploita­tion in play?

The fi­nan­cial in­clu­sion gen­der gap is un­for­tu­nately per­pet­u­ated by in­dus­try lead­ers who have, at times, ex­ploited the lack of fi­nan­cial lit­er­acy among their cus­tomer base.

Du­bi­ous busi­ness prac­tices usu­ally man­i­fest as add-on fees and ob­tuse pric­ing, and more of­ten than not, the con­sumers conned are women. Fi­nan­cial in­sti­tu­tions have also mis­used le­gal and cul­tural bar­ri­ers to side­line women.

In Zam­bia, his­tor­i­cal cul­tural prece­dent in­sists that prop­erty doc­u­ments are writ­ten in the hus­band's name, even though some cred­i­tors re­quire women to show proof of ad­dress in or­der to en­gage in fi­nan­cial ac­tiv­ity.

Where art thou gov­ern­ment?

Gov­ern­ment-driven ini­tia­tives to elim­i­nate the gen­der gap have been slow-mov­ing and in­ef­fec­tive — but ex­cep­tions shine through. In­dia is one of a hand­ful coun­tries that have seen sig­nif­i­cant changes in their pre­vi­ously large gen­der gap, shrink­ing from twenty per­cent­age-points to six per­cent­age points be­tween 2014 and 2017 (fe­male ac­count own­er­ship jumped con­cur­rently from 43 per cent to 77 per cent).

In­dia, how­ever, has alarm­ingly high fi­nan­cial dor­mancy rates, thereby giv­ing a false im­pres­sion as to what those num­bers ac­tu­ally com­mu­ni­cate.

Ac­cess does not nec­es­sar­ily trans­late into us­age, and farther strides in fi­nan­cial lit­er­acy ap­pear to be needed not only in In­dia, but in many other coun­tries that wit­nessed rapid ac­count own­er­ship trans­for­ma­tion.

Fin­tech to the res­cue?

If fi­nan­cial and govern­men­tal in­sti­tu­tions are fall­ing short, fin­tech should step up to use its plat­form as a means of ed­u­cat­ing and pro­vid­ing ser­vices to women. Fin­tech lead­ers need to be cu­rat­ing ef­fec­tive so­lu­tions to the gen­der gap prob­lem.

“Fear­less in Fin­tech,” an event for lead­ers in fi­nan­cial ser­vices to dis­cuss dis­rup­tion us­ing in­clu­sive and in­no­va­tive strate­gies, saw thought lead­ers propos­ing fin­tech so­lu­tions for chang­ing the fi­nan­cial sta­tus quo.

Wendy Kearns of Davies Wright Tre­maine, a tech­nol­ogy con­sul­tancy in Seat­tle, USA, sees the in­te­gra­tion and col­lab­o­ra­tion of fin­techs and fi­nan­cial in­sti­tu­tions as the so­lu­tion to spear­head wide­spread fi­nan­cial in­clu­sion.

Fin­tech has the power to dis­rupt the mar­ket and in­tro­duce ideas that can change the tra­di­tional mind­set of in­cum­bent fi­nan­cial in­sti­tu­tions to pro­vide greater and more mean­ing­ful ac­cess for women.

In her opin­ion, while fi­nan­cial in­sti­tu­tions do not have the same adapt­abil­ity or ap­petite for risk as fin­techs, fin­tech start-ups lack the sway of a re­spected es­tab­lish­ment fig­ure. There­fore, part­ner­ship is the golden ticket.

Grameen Foun­da­tion's CEO Steve Holling­worth, em­pha­sised the im­por­tance of con­cep­tu­al­is­ing these is­sues through a gen­dered lens.

Un­der­stand­ing the bar­ri­ers that women face world­wide is im­por­tant for per­son­al­is­ing the strat­egy of ex­pan­sion for fi­nan­cial ser­vices.

Mr Holling­worth added that it is cru­cial that fin­techs un­der­stand the power re­la­tion­ships present in ev­ery woman's life in or­der to bet­ter un­der­stand their ac­cess to fi­nan­cial ser­vices.

Fin­tech has the power to ex­pand in­clu­siv­ity in the pro­fes­sional sphere as well.

Amy De­berg of R&P Group, a fin­tech re­cruit­ing agency based at Sioux Fall in the US, en­cour­ages women to cher­ish their wom­an­hood and use it to their ad­van­tage.

She rec­om­mends that women take ini­tia­tive in cre­at­ing their own fin­tech start-ups, as any­one's good idea to­day could be life-al­ter­ing for oth­ers to­mor­row. Ms De­berg noted that it takes spe­cial peo­ple to look to­ward the fu­ture with hope and pas­sion, and those peo­ple should be (or at least not pre­clude) women.

The space be­tween what ex­ists and what should be in re­la­tion to fi­nan­cial in­clu­sion is a per­fect space for fin­techs to work to close the gen­der gap and en­sure equal ac­cess to fi­nan­cial ser­vices.

Part­ner­ing with in­cum­bent fi­nan­cial in­sti­tu­tions and pri­ori­tis­ing the spe­cific needs of women across mar­kets will en­sure fin­techs' suc­cess, even when shad­owed by the legacy of oth­ers who have failed.

Pic­ture: AFP

The suc­cess of ath­letes like US Open ten­nis cham­pion Naomi Osaka can help break down stereo­types that are cru­cial to open­ing more doors for women in the work­place, says IMF chief Chris­tine La­garde.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.