Tuesday 27th October 2020

Day 1 of the Summit kicked off with an apt question from Alliance Chair, Ann Cairns: “How do we shift the paradigm?” Ann noted the need to create a movement on a global scale and to do that, we need to reach out and engage powerful people and create aspirational goals to galvanize action. In Mastercard’s case, Ann and the rest of the leadership team are aiming to include an additional 500 million to the formal financial system and to enable an additional 50 million SMEs—50 % of which will be women owned (vs the estimated 33% of SMEs that are women owned and led). Ann spoke about the need to get to at least 30% female representation on boards to shift the paradigm on what it means to run sustainable businesses. This topic teed off a discussion between leaders of the Alliance network on how their institutions are Championing the Female Economy.

Steven Puig, President & CEO Banco BHD León, shared the business case for the women’s market he has seen at BHD León, stating “over the past five years we’ve experienced a 13% annual growth in our female customers compared to 10% for our male customers. That’s good business.” Dimanthe Seneveratne, CEO NDB, elaborated on NDB’s strategic decision to target the women’s market with their comprehensive financial and non-financial services offering and the creative ways the bank has expanded these to support women through Covid-19. Julie Baker, Head of Enterprise & Community Banking at NatWest, shared the bank’s extraordinary success in supporting women owned/led SMEs as well as in galvanizing the UK’s financial services system to support. AXA’s Group Head of Comms, Brand & Corporate Responsibility Ulrike Decoene, shared the company’s progress on women’s markets and their latest research on the protection gap for women and how it is has been exacerbated by the pandemic, with close to 50% of women reporting that they have had to tap into their savings, 20% require the help of their families and 20% expressed significant impact on their stress and mental load (many members shared how they are supporting customers with emotional stress, as discussed in our recent Business Response to COVID-19 Series).

In the US, money is the number one source of stress for women. Building confidence is key across segments, including (and maybe particularly) in the wealth space, where the women’s market is virtually untapped. Wealthtech pioneer Sallie Krawcheck laid out the scale of the problem in the clearest of terms. “In the US women earn 82 cents for every dollar a man earns, but when it comes to how much wealth she ends up with, it is 30 cents for every dollar a man has —and its one cent if she has black or brown skin.” she said.

Given these striking numbers, it is clear that the financial sector is leaving many women behind. With Alliance members reporting that 39% of their customer base are women but receiving just 22% of credit volumes, more work needs to be done on both the supply and demand side. 

One of the most effective tools we have to support more women get more out of the financial system is to offer non-financial services—but the business case for offering NFS is not always clear. The new IFC and FMO research shows that integrating NFS into banking services for WSMEs yields positive ROI within one-to-two years. According to Jessica Schnabel of the IFC, the KPIs that are making business leaders stand-up and offer NFS to women are increased loan volumes and increased interest income derived from that; increased share of wallet; increased loyalty mainly measured by net promoter score and reduced portfolio risk & lowered risk cost. Naomi Ndele of KCB reported, “’We look at whether women are able to package financials to get a loan, so a key measure is growth in loan portfolio and NPL.” Four Alliance members, NatWest, Kenya Commercial Bank, Banco Nacional de Costa Rica and Santander Argentina, shared the KPIs that they are using to measure the return on investment in their NFS offerings.

Key to all of these success stories was tracking strong data on NFS, as this leads to smarter decision making and proves the ROI. 95 percent of banks surveyed in the IFC and FMO report that had sex disaggregated data tailor their NFS to Women SMEs; versus just half of those who do not sex-disaggregated their data. “Since we started tracking data on NFS in earnest in 2015, we’ve seen more and more support from leadership of the bank. We’ve also seen more divisions of the bank wanting to be involved in the women’s market. Being able to measure that was a real game changer. Track the data from Day 1!” was the advice from Yvonne Greeves of NatWest.

Means to scale NFS offerings include partnering with others in the entrepreneurial ecosystem including accelerators, training/consulting services providers and eCommerce platforms, three of which shared their work on upskilling MSMEs etc. “We build a lot of tools that SMEs can use; lots of programs that are high touch—community learning, off-line and on-line training; successful sellers telling others what they learned; also leadership coming in and telling them what’s new,” said Satish Upadhyay of Amazon Saheli. Some Alliance members have moved it up a notch by becoming ecosystem orchestrators. NatWest in the UK, under the leadership of CEO, Alison Rose, has mobilized 66 financial services companies including all the major banks to sign on to the UK’s Investing In Women Code.

Which gets us back to Ann Cairn’s original call-to-action in her opening remarks for day one—to enlist as many leaders as we can to continue spreading the word: there is a strong case for women-targeted financial and non-financial services, an imperative to strengthen women-owned SMEs to build the resilience of the female economy and a very blue sky for women-focused wealth-techs.