How Fintech is increasing financial equality for women worldwide

Women-led fintech companies are helping women around the world access financial services, allowing them to take control of their financial decisions and well-being with newfound confidence.

Women have historically been underrepresented in finance, so much so that financial services firms miss out on at least a $700 billion revenue opportunity each year by not fully meeting the needs of female clients, according to research by Oliver Wyman.

Female founders from different backgrounds and with different life experiences are ideally suited to create solutions specifically developed to meet the needs of female users. This in turn leads to an increased female user base and helps to bridge the gender gap.

Build a foundation

Take Tala, for example, a fintech company that uses smartphone data to provide loans to people with little or no credit history, which has served over 7.5 million customers in emerging markets including Kenya, Mexico, the Philippines and India. Tala’s customer base is 58% female.

“We help improve women’s lives at a fundamental level,” said Tala founder and CEO Shivani Siroya. “This creates cycles of improvement in families and other areas.”

The company found that 76% of customers reported an improved quality of life, and 80% said they could now pay for major expenses they couldn’t afford before, which boosted their confidence, according to a report from Tala.

That’s a much higher percentage than statistics reported in the United States, where the majority (57%) of American adults cannot afford a $1,000 emergency expense, according to Bankrate’s annual emergency fund report. In addition, more than three in five working Americans feel anxious about their current financial situation, according to new Harris Poll research.

“At the core of all of this is the idea of ​​peace of mind for women and having the ability to show up in life in a more confident, in-control way knowing that their basics are covered,” Siroya said.

With access to digital loans, 63% of Tala’s customers reported reduced financial stress. Meanwhile, 58% of female borrowers experienced increased influence in decision-making, and 67% spoke of having more financial independence.

It’s a step in the right direction, proving that fintech solutions are helping women create pathways to wealth.

Growing companies

Women can leverage fintech to get the financial tools they need to become business owners, creating a new cycle of female entrepreneurs.

Nav.it, a money management app founded and run only by women, is focused on empowering its 65% female user base financially so they can put money back into their community.

“Female founders are more likely to have a social mission embedded in their companies and are more likely to serve underrepresented populations in the market,” said Erin Papworth, founder and CEO of Nav.it. “This creates a unique business opportunity to take existing fintech solutions and build innovation on top of the infrastructure we’ve seen boom over the past seven years.”

Using a behavioral finance-driven approach to money management, Nav.it is specifically designed to help women make the most of their income, knowing that up to 90% of a woman’s income goes back into her community.

Back to basics

Fintech companies in the US provide too many choices, leading to an oversaturated market with little effect on economic well-being. Meanwhile, the majority (79%) of fintech users are looking for financial apps to provide education around starting an emergency fund, improving credit scores and starting a savings habit, according to Plaid’s 2022 fintech impact report.

Financial awareness and literacy are the cornerstones of the female-founded fintech company Aura. Although financial access to products is essential, the impact should be felt by consumers in terms of emotional well-being, financial confidence and peace of mind.

“The next generation of investors looking for more than just financial advice,” said Courtney Cardin, co-founder of Aura. “They want an accountability partner and behavioral coach to keep them on track.”

It is easy to measure success by the number of accounts opened, but fintech companies must also consider emotional factors.

Asphalting of paths

Women-led fintechs are changing the game by leveraging digital platforms to curate content and tools to deconstruct systemic issues that have made access to financial services typically cumbersome.

Sure, it’s tough being a fintech company right now, but the industry’s potential to change the future of financial equality for women is front and center this Women’s History Month.

Fintech companies like Tala, Nav.It and Aura are helping women take control of their financial future while spreading awareness of fintech tools to larger groups of women around the world.

“If a financial service works for one woman, they will tell 10 other women in their community,” Siroya said.

With the right fintech tools, women can gain access to the same playing field as their male counterparts, empowering them to achieve their goals while increasing market share for fintech companies focused on serving them.

By empowering more women to participate in financial services, fintech companies are helping to create a fairer world for all.

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