According to a report from Boston Consulting Group released last year, women now control 30 percent of the world’s private wealth. With more women than ever taking the reins of their household’s major financial decisions, are financial services companies prepared to tap into the rapidly growing female market?
The Financial Communications Society (FCS) recently hosted a luncheon on “The New Wisdom of Women & Wealth,” at which panelists discussed what brands and communicators need to know to adequately address the underserved financial needs of women. The most salient takeaways from the discussion included:
- Don’t base strategy on stereotypes. A 2016 study from WorthFM found that only 10 percent of women believe that Wall Street pays equal attention to men and women. Throughout FCS’ panel discussion, the conversation often came back to one key question: How can financial services companies be sure they’re effectively communicating to and meeting the needs of women, without basing their strategy on overly-broad gender stereotypes? Financial services companies don’t assume all of their male clients have the same level of investment knowledge or the same financial priorities. As women begin to control more and more of the world’s wealth, financial services companies need to be implementing more inclusive marketing strategies that reach beyond their historically male-dominated client base, but also need to be sure these efforts don’t come across as pandering to gender stereotypes.
- Crowdfunding is still for the wealthy crowd. One of the more widely-discussed obstacles for women in business is the massive disparity in venture capital funding for female entrepreneurs. As a result, women often seek the necessary capital to launch their businesses through online crowdfunding platforms like Kickstarter. For Karen Cahn, founder of iFundWomen, a crowdfunding platform catering solely to female entrepreneurs, this trend revealed another roadblock. “Crowdfunding today is still for the one percent,” she noted during the panel discussion. She shared insights from her work with women-owned small businesses, emphasizing the socioeconomic barriers preventing innovative business ideas from getting off the ground. Women who are able to secure adequate funding through their existing networks are by definition already part of a network with significant expendable income. To help close this gap, Cahn has started an accelerator pool that allocates funding to the most transformative business ideas from low-income female entrepreneurs. Identifying and helping to eliminate these kinds of barriers to entry will not only create more opportunities for women, but will increase competition and bring more innovative ideas to the marketplace.
- Think globally, but also regionally. As financial services companies look to engage more women globally, that may mean taking a closer look at how women in various countries and regions prioritize budget items and to what degree these choices are influenced by their broader culture. In some countries, women have only limited access to lines of credit or insurance, while in other countries they have difficulty opening a savings account. While often this is due to local or regional legal barriers, often there is simply a lack of information or access for women to financial services products and advice. The panel also touched on the importance of understanding the practical budgeting decisions women are making, particularly in emerging markets. For example, when financial services companies market their products, they often only consider how their value proposition stacks up against their traditional competitors, when in reality they may need to consider how they can demonstrate their value over spending on home improvements or appliances like washing machines or dishwashers.
Ultimately, as financial services companies continue exploring new ways to engage more women, it’s crucial they keep in mind that over half the world’s population cannot be over-simplified, and that reaching them will require listening as much as it will communicating. As one barrier is solved for, often another will present itself – and unrelenting efforts to overcome these barriers will determine the most successful financial services companies in the decades to come.
Meaghan Knox is an account executive, Financial Services Sector, Edelman New York.