Financial Inclusion is a buzzy term these days. It’s on the agenda at this year’s financial conferences, and global organisations like the World Bank have financial inclusion on their list of concerns. For many people, financial inclusion tends to focus on “the unbanked” — those people for whom bank services are unavailable or unreachable.
In fact, the World Bank estimates that 1.4 billion people are unbanked due to being the difficult to reach. These people are most commonly women, poorer, less educated, and living in rural areas.
While this is clearly a large audience and a big challenge, our team at finmarie specializes on what’s happening in our local market, Europe, and on people who already have access to financial services, but feel discouraged or disengaged from the key financial processes that affect their lives. In particular, we’re concerned about women and how financial disengagement impacts their independence and puts them at risk of old-age poverty.
Aside from persistent gender-based pay gaps and the subtle (or not so subtle) cases of discrimination that women face, for finmarie, the key metrics are that women, as a group, tend to live longer, but their pensions are smaller, so old-age poverty is a bigger issue for them than it is for men. And it’s not only a problem for women in developing countries. In the EU, investment and pension gaps affect over 200 million women. Women tend to invest less, earn less, and 3/4 of women in Germany today are projected to get a monthly pension of 400€ or less.
In 2018, UBS did a great report on the topic of women’s financial disengagement called Own Your Worth, which pointed out that fifty-six percent of married women still leave investment decisions to their husbands — and before you start assuming that it’s an older generation’s issue, they also found that 61% of Millennial women do so, more than any other generation.
Their research pointed to a variety of reasons for this, from historical and social precedents to family, gender roles and confidence levels. The problem, of course, is that longer life expectancy and high rates of divorce mean that although many woman are relying on their partners, women’s average life expectancy is longer than men’s (5 years longer in the US), the median age of widowhood is 59 years old and the divorce rate among couples over 50 has doubled in the past 30 years.
With the wisdom of hindsight, 98% of the divorced and widowed women they surveyed recommended that women take control of their finances earlier in life.
While financial institutions recognize the gender gap, many haven’t pursued substantial solutions, and external consulting firms like McKinsey and Deloitte have published several reports on the missed opportunity when financial service providers fail to engage and support women as customers.
At finmarie, we see that one of the solutions to financial inclusion and engagement is a hybrid approach of technology for a smooth user interface combined with human interaction during the most important touch points that require extra trust and reassurance. To do this, we focus on community, financial literacy and the tooling that helps women to envision a strong financial future for themselves and plot the course to achieve it.
Since not everyone has the time or desire to book consultations with financial experts, we believe in facilitating self-paced learning with the option for support at key moments of the process.
There’s certainly a place for AI-driven assistance in this process as well. AI-driven robo-advisory tooling helps people to select and automatically adjust an investment portfolio based on market conditions and their own preferences for risk, sustainability criteria and more. This is already a well-understood and accepted way to help people make financial processes easier.
Thanks to some high-profile errors, we’re now all aware of the risk of “garbage in, garbage out” produced by AI-driven content, but an approach that we’re now testing for our business platform restricts the possible answers that could be given by an AI to a user, basing answers on the resources that our natural language search can find within the already vetted and trustworthy information we’ve produced in our videos and blogs.
The benefit of this kind of tooling is that it offers our users round-the-clock access to expert financial insights without friction or delays. Our customers tell us that this work is effective, meaningful and even life-changing for them, and in their feedback they confirm in their own words:
“I feel like a weight has been lifted off my shoulders”
“I finally feel like this is something that’s speaking to me”
“I can’t believe I waited so long to do this.”
At this point, finmarie plans to engage with financial institutions and others to advance inclusion and literacy as we scale up. The work we do creates capabilities that can be embedded within existing financial institutions and their channels of engagement.
The team at finmarie believes we can use the best of human support and digital processes will build the next level of trustworthy financial inclusion. Any success we have in helping women and other under served groups to achieve financial wellness is an aspect of this topic that is both important and impactful.
Based on what we’ve done so far, we’re confident that the balance between trustworthy tooling, great user interface and expert guidance at the right moments can make the difference in what is financially available vs. what is actually used and embraced.
And of course we’d love to hear more from the fintech innovation community at large about digital approaches to learning and behaviour change that really work.
Read more about finmarie here: https://finmarie.com/en/