Tuesday 27th October 2020
On Day 2 of the Summit, we launched ground-breaking research into How fintechs can profit from the multi-trillion-dollar female economy. The report provided the framework for discussions throughout the day, interspersed with spotlight talks from female founders and capped off by the Alliance Hack finalist pitches and winner announcements.
Throughout the day, strategies outlined in the report to ensure that the fintech sector becomes gender intelligent were discussed. These include the need for fintechs to embrace the business case; to use sex disaggregated data to drive decision making; to take a gender intelligent approach at all stages of their business cycle; to partner with banks and community based platforms to scale; aligning investors around gender lens investing and advocating for an enabling regulatory environment.
Progressing towards a more inclusive environment seems more possible than ever in the wake of the pandemic, when we are witnessing a shift a pure efficiency to more sustainability-based models. This requires diversity upstream and downstream within financial services institutions—from the company founders, to the boards and C-Suite, to the customer. “Last year there were twelve Unicorns with a female co-founder, and of those, 10 had started a year before. Clearly companies with a diversity of thought, you will see better products. We just have to build the poster children and make it evident to all of us there is a value in thinking holistically,” remarked Sopnendu Mohanty of the Singapore Monetary Authority. At the macro level, he asserted, “we need to build public infrastructure to drive opportunity for all of us. Lot of policy work to be done, a lot of data to be collected, a lot of dialog to build a more diverse ecosystem.”
The business case for gender-intelligent fintechs is clear from our research; of the fintechs with access to sex disaggregated data, 95% reported CAC similar or lower for women and 86% reported LTV’s was similar or higher for women. Four fintechs—Tyme Bank, BPC, Wavemoney and Hiveonline—offered persuasive case studies. Some attribute their success to simple and efficient on-boarding processes such as Tyme, through their kiosks located in grocery stores accompanied by ambassadors who support the customer with the on-boarding process. Initially the company onboarded more men, but three-to-six months later they are seeing similar numbers for women to men and an exceptionally high NPS for women. Wave Money noted their CAC for women is half that of men, with women being significantly more likely to download and use the app after registering than men.
Data is, of course, key to making the business case. This was a reoccurring theme brought up by the investor panelists during the Investor Breakout, such as Shuyin Tang, CEO of the Beacon Fund, who said: “The starting point for us was just asking for the sex-disaggregated data. And both founders and funders have been quite receptive to that. When you talk about gender-lens investing, that can sound pretty theoretical. But if you frame it as simply an ask for data – a lot of fintechs run on data, so it makes sense to them.”
Of course, there are risks of relying heavily on data without interrogating it for bias. During the Data Bias Breakout, various biases were discussed including income bias in source data which penalizes women because of the gender pay gap which in turn impacts algorithm outcomes. Speakers stressed the importance of ensuring that the process of credit underwriting ensures that gender is considered as a variable in the process. “NPLs for women was half that of men, so we decided to create a specific algorithm to reflect this,” said Juan Saldarriaga, CEO of Juancho Te Presto. Another speaker gave the example of biases in communications—discovering when looking at sex-dissaggregated data for the first time that just 20 percent of those applying for financial products from his fintech being women.
Another big takeaway was the importance of an enabling ecosystem , with the APIX platform, which hosted our Hackathon being a great example. Created to support financial institutions and fintechs to develop solutions, it has reduced time to get to a Proof Of Concept from 6-10 months to 6-10 days.
The day ended with pitches and the announcement of the winners of the Alliance Hack, which, along with our research, marks our first effort to support the creation of a gender intelligent fintech sector.
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