Thursday 27th May 2021
Alliance research into fintechs and women markets in 2020 showed a strong business case for fintechs already targeting the female economy — but it also revealed that this opportunity has been largely overlooked by the sector thus far. The report’s recommendations fell into six areas, each forming the backbone of our six-part #FintechFridays series. The first looked at the business case and the value of partnerships between incumbents and fintechs to serve women. What we learned:
Women have high usage rates if they have access to gender-intelligent products and services. In our survey, 64 percent of fintechs that collect sex-disaggregated data found that female customers had similar or higher usage rates compared to men.
According to Tyme Bank’s Chief Growth Officer Rachel Freeman, women are a natural fit for their solution. “Digital banks are most sustainable when many transactions are made within the same platform. This lends itself very well to women, who tend to be time-poor, because it’s easier for them to get everything done on one app.”
Fifty-three percent of Tyme’s customers are women, and its NPS score for female customers is 69.
Women have similar or higher lifetime values compared to men. In our survey, 86 percent of fintechs with sex-disaggregated data reported that female customers have similar or higher LTVs compared to men. When asked why this might be the case, fintechs reported that women are more loyal, have better repayment rates — a trend we see every year in our Measuring the Value of the Female Economy report — and refer more customers.
Alliance member Mujer Financiera, an app-based financial literacy service for women in Latin America, is seeing this play out. Founder Sabrina Castelli told us, “One competitive advantage we have is that women are really the door to the families. While our app is targeted exclusively at women, 8 percent of our users are now men. That’s because they are the partners, brothers and fathers of women customers.”
Niche markets offer great opportunities. #FintechFriday guest speaker Debbie Watkins is founder of LUCY, a platform that offers a range of financial services, including low-cost remittances, no-interest salary advances and nonfinancial services to low-income housemaids (many of whom are migrants) with the aim of building their entrepreneurial opportunities, demonstrating that designing for a niche market with very specific needs builds choiceful value propositions.
Fintechs have huge potential to help banks support WSMEs, and vice versa. Yvonne Greeves, Head of Women in Business at NatWest, shared examples of how the bank has integrated fintechs to support the female business owners her program serves, including an integrated accounting solution that’s a win-win for both the client by enabling stronger financial management and for the bank, enabling easier underwriting.
Joel Yarbrough, VP APAC at Rapyd, concurred on the bank/fintech win-win: “What we [fintechs] can bring to the table are use cases that are often very difficult for banks to address directly from an underwriting standpoint,” he said.
And Iana Dimitrova, CEO of OpenPayd, added: “There are several aspects of what banks do — including client onboarding, risk underwriting and client origination — that are today taken care of by fintechs through their superior technology. And all fintechs are reliant on traditional banks. It’s important that incumbent banks do not see fintechs as competition.”
NatWest’s fintech accelerator takes collaboration to the next level in supporting female entrepreneurs: More than 50 percent of participating fintechs in NatWest Group’s fintech accelerator are women-owned or women-led. Climate Propositions & Engagement Lead Darren Pirie attributed this to the networking opportunities and peer-to-peer learning model, which women are more likely to take advantage of.
Inspiring more innovative ways to close the SME financing gap is the focus of the 2021 Alliance Hack, which kicks off in June. We’ll ask fintechs to develop financial and non-financial solutions for women-owned/led informal Very Small Enterprises and formal women-owned/led SMEs in key markets across Africa, Latin America and South Asia. Our mass-market Wealthtech challenge also calls for innovations that will help women make investments beyond their own enterprises.
Please tune in to our #FintechFridays, spread the news about our Alliance Hack and get involved by sharing your examples of fintechs that are winning the female economy by writing to Karyl.email@example.com.