Women represent the world’s largest and fastest growing financial market. They are expected to control more than $216 trillion in wealth.[1] They are also strong savers, loyal and reliable customers and better credit risks than men.[2] Yet, women are often excluded from formal financial services. Only 65% of women have a bank account, compared with 72% of men, and this gender gap is 3 times larger when it comes to use of fintechs.

While fintechs have transformed the financial landscape recently and are uniquely positioned to close this gender gap, many fintechs are overlooking the women’s market. To help fintechs embrace this opportunity, ConsumerCentriX conducted research for a study called “How Fintechs Can Capture the Female Economy” commissioned by the Financial Alliance for Women. The report lays out a map that fintechs can use to improve their conversion rates for women within each stage of the sales funnel. By addressing the unmet needs and barriers that women face in accessing the financial market, fintechs can attract and retain more women customers, reduce customer acquisition costs, and boost revenues.

Although women are generally drawn to digital financial services, there are particular drop-off points in their uptake at different stages of the sales funnel. For instance, fintechs that use tailored marketing messaging to reflect women’s needs will attract more women to their platforms as opposed to one-size-fits-all messaging. If the signup procedure is lengthy or the language is convoluted then fewer women will sign up for the service. Unconscious algorithmic bias can affect how many women get approved for loans. Once women are signed up and approved, their product usage needs to be nurtured.

Fintechs can make significant business gains by developing an intentional focus on women throughout the stages of the sales funnel. Here’s how:

  • Most fintechs apply a gender-neutral approach to their marketing campaigns that doesn’t account for women’s behaviors and their differing realities. Fintechs should create gender-differentiated marketing campaigns that appeal to women and motivate them to click through the website. Our research found that by attracting as many women as men to their site, fintechs could see up to a 12% increase in revenue.
  • Fintechs typically face high drop-off rates before sign up, in all verticals and across all customer segments. Many women customers drop off because the registration process is time-consuming and cumbersome. Fintechs should focus on creating a user-friendly process and demonstrating product value. Our research found that by converting women at the same rate as men, revenue could increase by 70%.
  • Women customers are denied approval more often than men because the underwriting algorithms are embedded with unconscious bias. Fintechs should create a qualifying stage in the sales funnel for products such as credit and insurance and exclude qualifying criteria in which women are structurally disadvantaged but have no bearing on their performance as customers, like type of employment or education. Our research found that by removing bias in the credit algorithm, lending fintechs could increase gross margins by 20%.
  • When women customers have signed up, the goal is to encourage activity by creating a sense of community and promoting organic marketing with user-generated content. Our research found that by actively engaging with registered female customers, monthly revenue could increase by 15%.
  • Satisfied women customers are more loyal than men, have higher net promoter scores and will purchase more in cross-sales than men. By leveraging the positive experiences of women customers and tapping into the power of female referrals, fintechs can accelerate their organic customer growth by 50%.

While many fintechs have failed to design products that reach the women’s market, there are exceptions like Kubo Financiero, a fintech that provides loans and savings products across Mexico. Kubo posts financial education content on their Facebook and WhatsApp groups that targets their women customers and promotes personal interaction with their customer service agents by making them easily accessible through WhatsApp texting or video calls. Additionally, the company discovered a significantly higher drop-off rate during the registration process for women compared to their male peers.  By paying attention to their data, they were able to increase the female customer signup rate by 14% through redesigning a more user-friendly registration page and revising the language.

“If you have healthy finances, it’s super easy to activate your credit [with Kubo Financiero].”

Lisa, a Kubo customer, needed capital to fund her daughter’s education but was looking for more than a loan from her bank and wanted access to financial education information as well. She regularly engages with Kubo’s WhatsApp groups to gain insights on her financial health. Lisa recommended using Kubo because it’s more accessible, informative and effective for her.

What’s next: Fintech investors are still in the early stages of assessing an investment with a gender-lens and many indicated that they need more evidence for the business case. This research clearly shows the value of focusing on women customers through gender-intelligent fintech design.  Addressing the unmet needs of women is a win-win situation. By applying a gender lens and asking the right questions, investors and fintechs alike can capture the female economy, improving their revenue and profitability while advancing women’s financial inclusion.