Banks must improve response to women’s specific financial requirements

Across the world, women are dissatisfied or feel underserved in terms of the financial services they receive. This is not just annoying, it is a missed opportunity, as financial advice that better matches the needs of women could generate over €611 billion in additional income worldwide. However, two out of three women in the world’s largest economies report that financial advisors either do not understand them or provide inadequate support in the shape of appropriate financial advice.* Dutch women are up against similar barriers. ABN AMRO has investigated the differences between men and women, researching five focus groups in both quantitative and qualitative terms: women on a tight budget, women with above-average incomes or wealth, female entrepreneurs and young female professionals. The research mapped out what these women’s drivers are at different stages of their lives and what obstacles – financial and otherwise – they face.

Women from all income groups encounter financial barriers

Chantal Korteweg, Head of Inclusive Banking at ABN AMRO, observed: “Our research found that many women feel insufficiently understood by their banks or financial advisors. That’s why we should better align our services offering with women’s requirements at various stages of their lives. This essentially means clearer and more accessible communication as well as products that reflect what women are looking for. It also helps if our advisors are good at putting themselves in a woman’s position and really want to know what she wants and needs. We note that women face similar obstacles at all levels of society and regardless of their incomes or wealth. The absence of personal advice is flagged as a major shortcoming.”

Women on a tight budget, for instance, report a greater distance to their banks than do men in similar situations. They find it harder to set aside money for later in life and more frequently say they lack the knowledge or education to understand financial products. Only 27 percent of them expect their banks to be able to help them organise their finances, save towards the future and build their pensions, compared with four out of ten men from the same focus group. Wealthy women likewise feel misunderstood: two out of three say financial services do not meet their specific needs, the biggest stumbling block being a lack of financial products protecting and preserving the wealth of their families. They more often require investment products with longer investment horizons and are more interested than high net worth men in sustainable investments with a positive social impact.

Female entrepreneurs also experience barriers

Although their numbers are growing rapidly in the Netherlands, female entrepreneurs also find numerous hurdles in their path when it comes to finance. In the absence of personal financial advice, women find it harder to start up their own businesses, for instance. Nearly six out of ten women report this as a major issue, compared with less than half of men. This appears to be one of the reasons why it’s less likely that women will start up their own business – 9 percent compared with 12.4 percent for men – and their chances of running their own business for longer than 3.5 years are one-third of men’s. The research also finds that female entrepreneurs find it harder (69 percent) to attract capital than do men (59 percent). They typically lack role models or mentors to serve as positive examples and they report a greater desire for appropriate networking meetings. This applies to more than four out of ten women compared with about one-third of men.

“Creating equal opportunities is a relevant issue within the banking sector – as it is for society at large,” Korteweg emphasised. “Preliminary calculations suggest that if we’re able to reduce the number of women on a tight budget to the same number as men in the same situation, this could generate between €14 billion and €30 billion in extra revenues to society every year. Now that there’s transparency about the differences, all of the players in this ecosystem – financial institutions, governments, civil society and companies – must join together to remove barriers to banking and finance. Our own purpose – Banking for better, for generations to come – requires us to make our products and services inclusive and accessible for all. Women from all walks of life report that they lack adequate financial knowledge and experience to get a real handle on often complex financial products. Banks can support them by providing clear communication and customised financial training. More inclusive financial services in the Netherlands would help to increase opportunities of women and tap into massive economic potential. A win-win!”

* Source: Oliver Wyman - Women in Financial Services 2020