Is there a gender imbalance in customer perception towards banking services?
If you ask a group of women about their thoughts on financial services, one feeling sticks out—women feel left out. Gender representation strongly shapes customer perception towards banking services. In fact, in our recent Retirement Industry Trends Report, we found that men are much more likely to agree that the financial industry "has products and services that are useful to people like me." At the same time, thirty-five percent of women say that the industry "is not made for people like me."
Why do women have such a different perspective on the financial industry? (And how can we help them feel included?)
In general, our perceptions about money are shaped by our early experiences with it and how we learned about finances growing up. The truth is that female customer perception towards banking services has to do with how women are introduced to finances. In this article, we will explore the journey of women as financial consumers and why empowered women are critical for the future of the economy and, ultimately, the world.
The Gender Wealth Gap Begins In Childhood
Women, on average, are expected to live five years longer than men but accumulate over $100,000 less wealth. So, while women are living longer—they're also earning less. Why is this?
As women are hustlin' and movin' up the corporate ladder, they're also contending with the gender wealth gap. What's the gender wealth gap? It's the difference in median wealth between men and women. And it's a big one. In 2019, the median wealth for single men was $43,800, while for single women, it was only $36,000—a gap of $7,800.
Several factors play into the gender wealth gap, like the wage gap, the motherhood penalty, employment seniority, inheritance systems, etc. But one key factor that stands out from the beginning is that women aren't provided financial education at the same time or in the same way as men.
Who Teaches Girls About Money?
For many women, the origin of the gender wealth gap starts in childhood, and those early conversations about money (or lack thereof) have a lasting impact. A survey of 1,000 parents found that respondents were more likely to talk to their sons about building wealth, while their daughters were more likely to be taught about fiscal restraint. Women grow up being told in many different and small ways that they are not good at numbers and investing is complex and difficult. They are then trained to avoid risk.
So, who teaches girls about money?
The answer, unfortunately, is often nobody.
And this discrepancy isn't only in how children are educated about money but how they encounter money. The survey also found that girls received less money from their parents, with boys in high school and elementary school receiving about $20 more on Christmas, $3 more for finishing chores, and $1 more for allowance.
How women begin their financial journey sets the foundation for their relationship with their finances as adults. If girls are not taught about money management or investing and aren't treated equally when it comes to money, they are less likely to be confident and comfortable with financial decisions as adults.
Limited Financial Literature for Women
Now, while female customer perception towards banking services and finances begin in childhood, they are further shaped throughout their lives. And one of the biggest influences on these perceptions is the financial messaging women are exposed to.
Growing wealth is the "American Dream”—regardless of gender—but while seventy-three percent of financial literacy articles for men are focused on generating wealth, articles targeting women primarily focus on spending less money. Why this contrast?
Well, it's certainly not that women don't want to learn about how to grow their money (they do). In fact, sixty-five percent of women say they'd be more likely to invest or invest more if they had clear steps to do so. Instead, a significant hurdle is a lack of financial advice designed for women. Rather than including women in the dialogue about investing and wealth, ninety percent of financial literacy articles aimed at women classify them as "splurgers," classify them as "splurgers," and sixty-five percent have a negative tone portraying investing as complex and hard to understand.
And this may be why only fifty-two percent of U.S. women are considered financially literate compared to sixty-two percent of men. It's hard to be financially literate when the majority of financial information out there is not designed for you.
Over and over, the messaging is clear—women should be coupon-clipping into wealth, but if the financial services industry wants to create a positive female customer perception towards banking services, they need to start by changing the conversation.
How Financial Services Can Change The Conversation
Understanding the different experiences that shape female customer perception towards banking services is critical to empowering women and breaking down the barriers that keep them from achieving financial success. And what's so great about helping women become financially independent? It's not just the right thing to do—but it's also good for business.
Women Are Loyal Customers
Brand loyalty is paramount these days across industries, so it's worth mentioning that women are more likely than men to be brand loyal to products and services. And, currently, women are pretty happy with their financial service providers. Studies show more women than men say they're "extremely" or "very" satisfied with their primary financial institution, and eighty-six percent of women agree that having their investments managed by professionals makes life less stressful.
So, if you're a financial institution looking to increase customer retention and satisfaction (and who isn't?), then focusing on women is a great place to start.
Helping Women Grow Their Money Helps Everyone
When it comes to money, we know that women face unique obstacles—but we also know that women are a powerful force in the economy (Hello, they control $20 Trillion in annual consumer spending, after all). Empowering them to be confident and savvy financial decision-makers benefits women and everyone.
According to the World Bank, women currently make up 39.2 percent of the world's workforce and 46.2 percent of the workforce in the United States. They're a force to be reckoned with, and when they earn, they give to their families and communities. Research demonstrates that when women earn income, they reinvest up to ninety percent of it back into their families, compared to thirty-five percent for men. And as women's incomes rise, they are more likely to donate to charities in higher amounts than their male counterparts. Female financial success has a direct and tangible impact on the health and welfare of future generations.
And it's not just that women have a lot of buying power or societal impact. Despite being told otherwise, women are very good with money. Women have lower rates of non-performing on loans and higher deposits relative to income. Truth be told, women are so good with money that they're outperforming men when it comes to investing.
What's the conclusion? When women are financially empowered, everyone wins.
How To Break the Money Taboo & Reshape Female Customer Perception Towards Banking Services
For far too long, women have been hammered with negative messages about money or entirely left out of the financial conversation altogether. For many women, the mere mention of money or earnings is taboo. According to one survey, sixty-one percent of women would rather talk about their own death than discuss money. This is a problem.
Given how the deck is stacked, it's no wonder that many women feel like they can't win with money. They're told they're bad at it or not supposed to talk about it. So, how can we break the money taboo and stereotypes?
Here are a few ways we can shape female customer perception towards banking services—
Start by changing the conversation—When it comes to money, we need to normalize conversations on budget, salary, day-to-day money management, and financial struggles to provide a point of reference for women and inspire them to be confident financial decision-makers.
Empower women with the right information and resources—Regarding financial education, we must ensure that women are given information that sets them up to grow wealth, not just teach them to plan a budget. This includes everything from financial literacy programs to mentorship opportunities.
Kickstart inclusive marketing—How financial service providers market and advertise their products and services can significantly impact women consumers. Marketing efforts must be inclusive and cater to the needs of everyone—not just the status quo.
Encourage women to be their own financial advocates—We must encourage women to feel confident in negotiating their salaries, investing in their futures, and acknowledging that they know more than they think.
Breaking the money taboo won't happen overnight. Changing female customer perception towards banking services is a lifelong challenge. Still, when we provide women with a point of reference and open up the dialogue, we can begin to close the gender wealth gap and build a more financially inclusive future—for everyone.
Interested in more financial industry consumer insights? Check out our recent report. In it, we discuss the latest consumer sentiment regarding retirement, including how the COVID-19 pandemic has impacted retirement readiness and how consumers feel about financial brands. Download the full Retirement Industry Trends report.