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Business Case

THE BUSINESS CASE FOR FINANCIAL INSTITUTIONS TO INVEST IN THE FEMALE ECONOMY IS SIMPLE 

Across the Alliance network of 100-member financial institutions (and counting), women represent an increasingly important share of the customer base and revenues, with impressive year-over-year growth rates.

When women save and borrow, financial institutions’ liquidity goes up, and risks go down When women bank, financial institutions grow.
 Across the Alliance network, women customers represent 33% of deposit volume
And they pay their loans back at greater rates than men: 2.7% WSME loan default rates, compared with 4% loan default rates among men SMEs
 Across the Alliance network, women customers represent 29% of loan volume
When women account-holders are well-served, financial institutions gain loyal and enthusiastic customers.
 When women bank, financial institutions grow.
2.9 products per customer for WSMEs compared to 2.8 for men SMEs
75% of Alliance members report women have stronger net promoter scores than men
And when women have equal representation in financial institutions’ workforces and leadership, these institutions prosper. When women bank, financial institutions grow.
Firms with gender-diverse C-Suites are 21% more likely to have above-average profitability and 27% more likely to have greater long-term value creation (McKinsey).
Teams are 158% more likely to understand their market when team members represent the end user (CTI).

But despite the powerful business case, women remain underserved by financial services providers.

>$1.4 T finance gap for women micro, small and medium businesses, with more than 68% of small women-owned firms reporting inadequate or no access to financial services (IFC 2023; EIB)

For financial institutions savvy enough to be paying attention, this means that WOMEN’S MARKETS represent a VAST, UNDER-UTILIZED BUSINESS OPPORTUNITY.

In fact, Women’s Markets are surging, with a growth trajectory in the FEMALE ECONOMY slated to outpace the combined GDP of China and India in the coming years.

  • of married millennial women involved in financial decisions compared to 29% for female baby boomers (BCG 2020)
  • of global household spending controlled by women (Deloitte)
  • of private businesses owned by women, with a 10% annual uptick in women’s entrepreneurship (World Bank, GEM)

To capture this potential, financial institutions need to understand that WOMEN ARE NOT A MONOLITH

They are 51% of the world’s population and REFLECTIVE OF EVERY ASPECT OF THE HUMAN EXPERIENCE.

Old, middle-aged, and young. Rich, middle class, and poor. Grandmothers, mothers, and daughters. CEOs, professionals, and entrepreneurs. Farmers, fishers, and low-income wage earners. City dwellers, suburbanites, and rural villagers…and beyond.

Women’s banking behaviors align with their distinctive journeys, which typically differ from men’s. Financial service providers that overlook these differences, continue to pursue gender-neutral approaches, and fail to address unconscious bias in interactions with women customers may struggle to capitalize on the opportunities that WOMEN’S MARKETS represent.

64%

of women respondents in one survey said that their bank needed to improve its value proposition for women. (BCG, 2020)

30%

of women investment clients responding to the same survey reported that their relationship manager talked down to them. (BCG, 2020)

For financial institutions that want to grow, thrive, and compete in a world where women’s economic influence is on the rise, the question is not: SHOULD we invest in Women’s Market’s solutions? Instead, the question is: HOW? How can we capture this potential?

What’s needed is a SEGMENTED APPROACH—a holistic WOMEN’S MARKETS strategy that accounts for different women customer archetypes and drives the development of solutions tailored to their specific needs. The Financial Alliance for Women helps its member institutions do just that—harness the power of the FEMALE ECONOMY.

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