A few weeks ago, I moderated a panel at the Money20/20 conference in Las Vegas. Amidst the many discussions and speaker sessions on the future of digital money, our panel addressed a very specific and burning issue, not only in financial services but across every industry and aspect of our lives: opportunities for women. In our case, opportunities for women to do their own financial planning, investing and management. “Designing FinTech for Women: Engaging with Financial Decision Makers Globally” assembled a cadre of fintech innovators to discuss the market demand and unique requirements for identifying, designing, educating and engaging with women financial decision makers globally.
Underserved yet again
As one can imagine, the female investor market remains largely untapped. Recent consumer research shows that women play an important role in household financial decisions, yet the financial services industry has been slow to respond. Our panel talked not just about why this is, but how to change it. As many studies have shown, diversity in workplaces and marketplaces is good business. Women represent a large and potentially profitable group of investing consumers, assuming the financial services industry is willing to open up the market to them.
Fintechs have an opportunity to lead the way, especially if traditional financial services companies choose to sit on the sidelines. As Amy Pressman, president and co-founder of Medallia, a customer experience management company, said during the panel: “The reality is women are a huge potential market for financial services companies. If the companies that exist today don’t address it, I guarantee someone will come in and be a disruptor.” Just look at Ellevest, a recently launched online investing solution specifically for women headed by Sallie Krawcheck, former CEO of Merrill Lynch Wealth Management and Smith Barney.
Just how big is the opportunity and the disconnect?
A 2013 Fleishman-Hillard study estimated that women will control two-thirds of the consumer wealth in the US over the next decade and be the beneficiaries of the largest transference of wealth in the country’s history. Juxtapose that with a Boston Consulting Group report from June of this year in which only 2% of wealth managers said they considered women to be a specific client segment and had adapted their service model accordingly, and you can clearly see the disconnect.
The financial services industry continues to view its customer base monolithically. Actually, the industry treats all of its customers like men, even though women have very different needs and attributes as investors. Women tend to save more and take a longer-term investing view—and they live longer to boot. But financial firms don’t seem to get it, and they are missing out on a major opportunity because of it.
Hope springs eternal
When you combine the industry’s dismissiveness with widespread stories of condescension in women’s dealings with male financial advisors and the depressingly low number of female leaders in financial services, it’s easy to assume that in an industry dominated by men—from financial advisors to venture capital mavens— nothing much will change.
But last year, I co-authored a study on gender diversity in fintech (thanks to an invitation from the innovation unit at Swift) and since then have conducted hundreds of interviews with female leaders in fintech—FemTech Leaders—highlighting their unique and inspiring stories. These persevering women and their commitment to progress renews my faith in our collective ability to make things right. By collective, I mean my male counterparts as well. Fintechbros, please read my recent article in American Banker for advice on being part of the solution, not the problem.
The reaction to our Money20/20 panel also gives me hope (read the Las Vegas Review-Journal article for a detailed recap). With 300-plus attendees and dozens of follow-up interactions with companies wanting more insights on the female investor opportunity, I’m confident that a good chunk of the fintech world is starting to get it. Let’s work together to keep that train rolling so we all can benefit.
Post Date: 1/11/2017