How to address gender disparity in financial services

Good financial health is key to a fulfilling life, enabling individuals to meet their financial obligations, handle negative financial situations, and pursue their financial goals.

However, known structural factors impact women’s financial wellbeing, from career gaps resulting from caring responsibilities to typically lower paid work throughout their careers. Further, a male-centric finance and investment environment has contributed to lower financial confidence in women, fuelling a self-perpetuating cycle. Combined, these trends increase the potential for financial disparity between men and women.

Financial disparity has significant consequences for women. In the UK, the average woman retires with almost a third of the average man’s pensions savings. As a result of the gender pay gap, women in the UK also save a third less than their male colleagues. How can financial services firms develop accessible, gender-inclusive products, services, and support mechanisms?

Rethink products and services 

Financial institutions can boost women’s financial confidence by supporting them to explore products and services – whether in-branch or through digital channels. Customer segmentation and research can help to identify gender-related vulnerabilities and guide targeted interventions, augmented by synthetic personas and characteristics modelling.

Firms can embed accessible long-term investing and financial planning for women within their customer strategy, helping to set targets and rewarding progress. During the discovery phase of product development, firms can look through the lens of gender (alongside other characteristics and accessibility needs) to improve financial confidence through products that better reflect and represent diverse customer bases.

Importantly, regulatory shifts are spurring the development of more innovative, inclusive products and services. The Financial Conduct Authority, for example, is working with the Prudential Regulation Authority (PRA) to develop a new Diversity and Inclusion regulatory framework in the financial sector.

Remould internal cultures and talent acquisition

As the old adage goes, as within, so without. By championing gender and broader diversity within their cultures, firms can better reflect their customers, enhancing their ability to cater to diverse audiences. This creates value for all stakeholders by improving the conditions for growth, innovation, and improved performance.

One important way that firms can encourage a more diverse, representative sector is by tapping into different talent pools. The number of female fund managers increased from 10 to 12 percent between 2016 and 2022 – just two percentage points. So, there’s a need to focus on placing more women in financial leadership and customer-facing roles. In practice, this means shifting the language used in job listings to encourage female applicants, working with recruiters that focus on diverse candidates, and ensuring recruitment teams include a balance of genders (and demographics).

Alongside this, internal education can help existing employees to understand inclusion in the context of diverse audiences, and to tailor their interactions both internally and when interacting with customers. As shown by our research, there needs to be a shift away from male-orientated advice so that women and other groups are empowered to manage their finances more effectively.

Meet your customers where they are

Across adult age groups, women clock up an extra 33 minutes of online time each day compared to men. Women account for the most time spent on Pinterest, Snapchat, Instagram, TikTok, and Facebook, while men spend the most time on Quora, Reddit, LinkedIn, and YouTube.

No wonder, then, that women are looking to social media platforms for financial advice and support, with influencers such as Clare Seal (My Frugal Year), Vivian Tu (Your Rich BFF), and Bola Sol (Rich Girl Chronicles) encouraging open financial discussions and ‘hacks’. By understanding where specific cohorts get financial information, and why, firms can adapt their approach to serve these groups. Partnerships, outreach, and specific digital activation strategies can all raise positive awareness about women’s financial wellbeing and contribute to the conversation in a meaningful way.

Despite the permeation of gender inequalities in the financial sector and beyond, many financial institutions are aware of the challenges faced by female customers and are creating products and services that speak to these needs. By looking at their offerings through a new lens, firms can facilitate conversations, reassess the state of play, and champion gender equality. In this, the sector can encourage broader positive change, creating a more diverse and more level playing field.