Bridging The Gap

Designing for a world of women and their wealth

Women hold a significant and ever increasing percentage of the world’s wealth. Yet we go largely ignored by the financial sector. In a world where our relationship with money is changing rapidly, the finance industry has a golden opportunity to refocus on women and unlock profit for us all.

Accessible. Empowering. Transparent. It wasn’t so long ago that these three words simply didn’t belong in the same paragraph as financial services. Yet here we are. The year is 2021 and the likes of Starling, Plum and Lemonade have earned both their place in this paragraph and a loyal customer base. By centring around what people want, how they think and how they behave, these brands have woven themselves into the everyday lives of their customers.

Investments is no different. Wealthfront and Robinhood proved that. And yet, zoom out a little and you’ll notice the category is missing a trick. And a rather big one at that.

Where are all the women?

Busy controlling 40% of the world’s wealth, that’s where. And in the UK, we expect that figure to be more like 60% by 2025. Driven in no small part by female entrepreneurship, leaders like Kathryn Parsons, CEO of Decoded, Sharmadean Reid, Founder of BeautyStack, and Pip Jamieson, Founder of The Dots, will only further inspire a new generation of female founders with more wealth and power than seen before.

But here’s the thing, the finance sector isn’t built to serve women, 59% of whom believe the banking category isn’t doing a good job at representing them. They feel ignored, so ignore in return.

The result? Is rather sad.

Women don’t invest. They lose out. And are left with a pension gap that’s all too similar to the pay gap for all too similar reasons. The motherhood penalty, the childcare penalty and the good daughter penalty. Today, women can expect a pension worth a staggering £100k less than their male counterparts. A fact which only gets more troubling when you consider that 70% of people over the age of 90 are women. Living longer, living on less.

Now add the pandemic. Women made up 54% of global job losses, despite being only 39% of the global workforce.

So, it’s plain that women are not served by the financial sector. What’s not plain, is why. After all, women make excellent investors. We tend to save more than men and not only that, we do it better. Getting an annual rate of return about 0.4% higher than men. And whilst women tend to be more risk-averse, we make fewer trades and panic-fuelled decisions. We see investing as a long-term solution to financial growth.

The problem is simply this; not enough women invest. Only 23% of us hold an investment product, compared with 35% of men.

Now is the time to fix that.

A perfect storm of opportunity is brewing. The Bank of England base rate is at its lowest ever, making safer investment options like Cash ISAs, which many women tend to opt for, less attractive. Then there’s COVID-19. Detrimental for some, no doubt. But for others, the pandemic has forced them to restrict spending, increasing their savings and creating a deeper financial buffer. At one time property was thought of as the most secure investment choice. No longer. Younger people are less able to buy property and increasingly less willing. Instead, they’re looking to investment products and the potential they offer.

There is a growing movement to educate and empower women around their wealth. Communities like Vestpod, Rainchq and Female Invest are leading the way, but there is much more to be done.

This is no PR exercise. Women’s wealth is a lucrative commercial opportunity. In the UK, Gen X women represent a £24.4bn market opportunity, with their Millennial sisters representing a further £12.4bn market.

It always seems impossible until it’s done. Luckily for us, Ellevest in the US has already done it. Founded by Wall Street executive Sallie Krawcheck, Ellevest is a financial company ‘for women, by women,’ whose aim is to get more of us investing. Launched in 2016, today Ellevest has a staggering $1bn of assets under management and is on a firm upwards trajectory.

Europe, it’s your turn. But where to start?

The challenge here is to create the right proposition, rather than the right product. Although that’s important too.

Neurological science teaches us that women tend to make decisions using both sides of their brain. What may once have been considered indecisiveness, is actually a process of working through both rational and emotional factors before reaching a final decision.

Understanding this decision making process is crucially important for brands looking to capitalise on this opportunity. To succeed, experiences need to be deep and meaningful. Be that with a female focussed product or a female-accessible solution. Either way, here are our first thoughts on how to design for women.

• Getting your experience right is essential. By experience, we mean the sum of every interaction your customer has with your business. No small task then. But to get women investing you need to seamlessly and strategically overcome barriers to entry such as trust, risk, education, relevance, fear and ethics. There’s no silver bullet for that. The right solution must be designed in alignment with your brand. But a good starting place is with features like personalisation, convenience and coaching.
• Women tend to be more driven than men to make a positive impact on society. Opportunities to invest in matters which have an altruistic quality are likely to go far. Thinking ethical funds? Think bigger. We like Ellevest’s Women Led Collection. It lets users put money in the hands of women-owned businesses through its cashback programme.
• The benefits of investing can seem intangible or far off. So, how can you inspire female investors to see the potential? To connect with their future, more prosperous selves? By normalising women investing. By looking internally at your own culture. By tapping into what’s already going on. We’ve mentioned Vestpod, Rainchq and Female Invest, but there’s so much more out there. Do your research and don’t forget the power of partnerships.
• Creating an excellent experience means little without an excellent product. The core product range needs to meet the same price, quality and performance standards of any other offering. Never forget that talking to women doesn’t mean talking down to them.

Keep in mind that these are just thought-starters. What we’re describing here is ultimately a more inclusive proposition and experience design. We’re talking about women, but these principles could apply to many commercially attractive groups as yet untapped. Think about groups that have increasing funds but little investment awareness, like upwardly mobile professionals from disadvantaged backgrounds, for example.

Interested in doing something about this? Let’s talk.

I head up the Innovation Consulting team in the Experience and Innovation arm of Engine. Here we know that to stay relevant, you need to innovate constantly. If you’re not thinking about what’s next, you’ve already been left behind. So we’ve made it our business to find new opportunities for growth and work with you to create the products and services needed to realise those opportunities.

Nestled in world’s largest independent agency, we’re at the sweet spot between agency and consultancy. Which means we have genuine expertise across strategy, design and implementation. We don’t just build the bridge between today and tomorrow. We are the bridge.

There has never been a better time to seize the opportunity offered by this growing audience. So, if like me, you’re passionate about women and wealth and if you want to talk more about making this opportunity a reality, or to go into more detail about anything I’ve covered here, please get in touch by dropping me a note at dulcie.omonubi@enginegroup.com.

Dulcie Omonubi

Director of Consulting, Engine Experience and Innovation

Sources:

1. Global Wealth Report Credit Suisse, https://www.credit-suisse.com/about-us-news/en/articles/news-and-expertise/global-wealth-report-2018-women-hold-40-percent-of-global-wealth-201810.html
2. Karen Frank, CEO of Barclays Private Bank and Overseas Services, https://privatebank.barclays.com/news-and-insights/womens-rising-wealth/
3. 21 Century Woman 2017 Report, Engine and Andrews Aldridge
4. Women and Retirement Report, Scottish Widows, https://www.scottishwidows.co.uk/yourfuture/
5. Covid-19 and gender equality, McKinsey, https://www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-regressive-effects
6. Fidelity Investments Survey, https://www.fidelity.com/about-fidelity/individual-investing/better-investor-men-or-women
7. Deposit and Savings Accounts, Mintel, May 2020
8. Winning Over Wealth, Kantar, 2017
9. How Women Decide, Harvard Business Review https://hbr.org/2013/09/how-women-decide
10. Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth, Centre for Talent Innovation