If I had a dollar for every time a VC told me “It’s so great that you’re focusing on women as a niche”, I would not need to raise Series A.
Some background – I’m a Co-founder at SALT. We are an Indian Fintech, building to bridge the gender gap in finance. Most people hear that and think “impact” or “inclusion” or something along those lines. Almost nobody thinks “a high lifetime value customer segment with low churn”.
My Co-founders and I are three women in different decades of our lives. We’ve worked across banking, regulation and Fintech for a collective 50+ years. We’ve witnessed waves upon waves of advancements in Financial Services, cater to their default customer. A man.
Lip service at best
Women became part of the 520 year old formal economy about 70 years ago. The average man started using bank accounts and formal financial services 120 years ago. And women were about 70 years late to the party. Not surprisingly then, women have had to audition for what was created for a male world.
How, you ask? The Financial Services industry discriminates against women in perhaps inadvertent, but highly systemic ways. Products and their eligibility criteria are designed keeping the typical male life journey in mind. Have you ever wondered why career-break insurance doesn’t exist? Or why Credit Card companies have decisioning algorithms that favour stable monthly salaries over the ebbs and flows of freelance income (statistically more prevalent among women). And yet someone thinks it’s revolutionary to create a special Women-only card with a picture of a shopping bag slapped across it.
In fact, even the sales process for most financial products caters to what it presumes is the male way of decision making. For example, research shows that men display higher levels of reward drive compared to women. High cortisol levels, laser-focus them towards even a low probability reward. Women by contrast, become more risk aware in the same situation and optimise for smaller, more certain rewards. Numerous studies have shown that women are equally, if not more, data driven in their decision making compared to men. Yet all this evidence is ignored, as formal finance lazily labels women “risk-averse” and stubbornly coddles them during the sales pitch.
True north
When we set out to build SALT, we knew we were solving what was first and foremost, a design problem. Not “let’s create a fuchsia app” design, but “how do we speak to this thoughtful and discerning customer who leans on intuition and inquiry in equal measure” design.
The first thing we did was create a highly sophisticated psychometric assessment, disguised as anything but. The cluster analysis was astoundingly conclusive. Women scored higher on comfort with financial terminology compared to men, but scored much lower on actual participation in financial conversations. There was no discernible difference between the genders, in their propensity for financial decision making, nor in the satisfaction with the outcomes. Yet women displayed marked reluctance when it came to using apps for investing, insurance and anything more than basic payments.
Further research confirmed our suspicions, that women simply did not relate to the current discretised, ‘marketplace’ approach to finance. They wanted something that hugged the contours of real life more closely, where money decisions aren’t conveniently MECE (mutually exclusive, complete exhaustive). Essentially, they wanted something more intuitive, better tailored, and simply smarter. In the words of a senior lawyer who participated in our workshop “I’m tired of advisors telling me about earnings peaking in our 40s and 60 plus being the years you plan for. I’m a lawyer, my earnings peak after my 50s, when most people retire. I also happened to take a 5 year sabbatical when I was 42, to take care of an ailing parent.” Or a young Spanish teacher who was part of our first focus group “I don’t care about building wealth. I’ve never run out of money and that’s good enough for me. But I do want to save up to buy a house because I’ve always imagined myself as a single parent.”
This isn’t a supply side problem, in that suitable financial products don’t exist. Rather, it’s a delivery mechanism issue. It’s not optimal to swallow as a pill, what needs to be administered intravenously. Financial product manufacturing needs a healthy dose of Human Centric Design before it can truly call itself a service.
If you can’t find a shoe that fits, you don’t leave the store cursing your feet. Finance is one of the few industries that has successfully managed to convince the customer that it’s their fault if the metaphorical shoe doesn’t fit. Women have been at the receiving end of this a lot more since they are the ‘odd size’ when it comes to finance. But the world is changing. More people are choosing unique life paths, meandering, with pauses and less conformity. The odd sizes of yesterday are the regular sizes of hereafter. And financial services need to follow suit.
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Originally published by 11:FS
Note: The writer uses female loosely here to include all those who identify with feminine traits, partially, wholly, or barely. The idea is not to be gender normative or exclusionary.
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Aditi Sholapurkar is co-founder at SALT.