5 Ways FinTech Is Changing the Banking Game for Women!

Financial technology (FinTech) has been lauded as a game-changer in almost every sense of the term. Can it, however, change the way banks servicewomen? At the present, female customers are realizing that financial institutions are failing to meet their specific needs. 

The Boston Consulting Group discovered that, of all the businesses that have an influence on their daily lives, women are most unsatisfied with the financial services industry, both in terms of the products they receive and the services they receive. Women who took part in the survey also reported a strong desire to switch to a provider who better understood their requirements.

This has substantial financial ramifications for banks that fail to display empathy for the special situations and needs of women in the course of running their houses and businesses (oftentimes happening simultaneously). It's crucial to realize that we're talking about half of the world's population here, which represents a tremendous amount of change — especially for self-employed women.

Women entrepreneurs, a highly profitable and financially engaged segment of the population, have a distinct set of needs that the mainstream economy has historically failed to provide. According to Goldman Sachs, women-owned small and medium-sized companies (SMEs) represent a $235 billion untapped potential market for banks!

In light of this, why haven't women's needs been prioritized in so many aspects of banking?

How does FinTech help the Financial Services Industry provide more Effective Services to Small Company Owners?

Instead of listing additional ways that women's requests aren't being met (see the Boston Consulting Group research), let's focus on practical suggestions that banks can implement right away to make banking inclusive and simple for women who own and manage small and medium-sized enterprises (SMEs).

The European Bank for Reconstruction and Development recently tasked WB, a New York-based nonprofit that promotes financial inclusion for women around the world, with developing a set of global best practices to serve as guidance for banks seeking to capture this significant and easily addressable market. WB is a participant of the Women's Financial Inclusion Network.

Strands agree with these best practices and want to share them with you since they are related to and resonate strongly with both our corporate principles and our product value proposition, both of which we feel will benefit you. Here's what the WB came up with, followed by an examination of how banks may utilize FinTech to better serve women in their communities.

1. Organize your data by gender!

Banks are sitting on a treasure mine of data that they are rarely able to use. When it comes to gender, most financial institutions (FIs) are unable to tell the difference between male and female consumers, particularly if the customer is a company. So, the first step is to collect, analyze, and then segment consumer data — in this example, by gender — in order to create enticing value propositions for female customers.

Following that, it is vital to evaluate performance using data-driven solutions to ensure that it remains on course. Business financial management solutions in the form of a sophisticated back-office will provide banks with the critical monitoring and analytical skills required to derive relevant and actionable insights from this key data.

2. Know your market and your customers!

Market research can assist you in determining the size of the opportunity in your local market, the key constraints that female entrepreneurs face (for example, social or cultural biases, property or inheritance laws, a relative lack of business acumen or managerial expertise), and the best way to segment your customer base.

Banks are gaining a far better understanding of their markets and clients as a result of the data-driven insights offered by FinTech solutions such as business financial management. However, just because you utilized pink for your user interface and other (stereo) types of condescending "feminine branding" doesn't mean your work is over.

Use technology to categorize your client base based on their actual online activity and incorporate that feedback into subsequent releases to better meet the needs of female consumers.

3. Separate out Women-owned Small and Medium-sized Companies (SMEs).

According to the study's results, women SME owners place a high value on being treated with respect as entrepreneurs, and they view their banking relationship as including more than just transactional terms. It is critical to tailor your brand strategy to appeal to women-owned small and medium-sized enterprises (WOSMBs).

Giving customers the option to buy digital things and services that are algorithmically targeted to specific groups depending on their behavior is a great way to achieve this aim in practice. Women's World Banking discovered that women prefer to think about banking in terms of relationships, which is exactly what financial management apps do by transforming an incomprehensible mess of transactional data into actionable insights. 

These insights are relevant and personalized, making financial data easier to understand and much more useful for both the user and her financial institution. A calendar or heat map showing income and expense data, for example, is a far more visually appealing and clear tool than a long list of transactions. Alternatively, a user's savings goals can be changed to reflect true life events or business milestones that the user has attained, rather than meaningless numbers.

4. Build internal capacity!

Technology may be a wonderful tool for teaching customer-facing personnel to become better brand ambassadors. It is vital to have the backing of the board of directors and C-level executives. Another key step is to train your customer-facing employees to be outstanding brand ambassadors for the women's market.

Because it is an all-in-one, easy-to-use dashboard for business financial management, Business Financial Management (BFM) may be utilized as a practical tool to transform bank branch workers into more successful ambassadors for the women's market.

In this case, too, more personalized and accessible data presentation facilitates education and learning about corporate financial management.

5. Make available to women a comprehensive range of financial technology products and services!

Offering a wide range of services, such as platforms for both personal and business financial administration, makes it easier and more comfortable for women to manage their finances in a single, convenient location. As a result, the service provider FI is more likely to be identified as the "primary bank" for its female consumers, whose increased loyalty makes them more likely to seek other services from the provider.

When women have faith in a certain institution, they are more likely to entrust more of their business, both personal and commercial, to that organization. Cross-selling is a successful tactic for banks that have won the trust of their consumers. As a result, product and service delivery paradigms should be altered. Some bank personnel at specific branches provide extra attention to female customers. Others accept collateral in the shape of household items or jewelry.

The Bottom Line

Banks that have not traditionally focused on servicing female customers may find it advantageous to use a combination of established criteria, such as credit scoring, as well as relationship-banking methods to achieve success.

FinTech technology, when combined with relationship-banking approaches, may enable a customized, data-driven evaluation of SMEs' previous performance and future projections, allowing financial institutions to detect risk and opportunities more precisely than before.