Designing products for the 50%

6 Minute Read

Gender balanced boards in financial services can only be a good thing for women, whether they’re employees or customers. But with limited numbers of women making it to the C-suite, designing products and services to meet the needs of 50% of our population is still a challenge.

Lately we’ve been hearing a lot about the she-cession that’s coming off the back of the pandemic. And that makes us extra glad to be celebrating a positive outcome for women in our industry. In 2020, on average, women made up 40% of board members across financial services[1]. But while this is certainly great news, it stands in contrast to the number of women in executive positions. Only 5%[2] of companies in the ASX 200 have a female CEO.

So, what’s the story here? Why are women getting to board level in far greater numbers than their CEO sisters? According to Chief Executive Women (CEW) women are still underrepresented in ‘feeder’ positions for CEO. In 2020, 96% of CEOs were recruited from line roles – executive leaders who have profit and loss responsibility. In financial services, just 12% of these roles are held by women[3].

Why is this a problem?
Women make up roughly 50% of the population, so they’re a pretty sizeable chunk of the target market for financial services. And if you don’t have diversity of views in executive teams perhaps you’re not designing product with 50% of your potential customers in mind. It’s a problem that Zip Co’s chair Diane Smith-Gander called out in her recent commentary in the AFR. As director for a financial services company whose typical customers are young women, she voiced her concerns about lack of gender diversity in leadership as a risk to growth and profits for the business.

The opportunity in diversity
With Buy Now Pay Later services growing in popularity it’s particularly important for a company like Zip & Co to be more female focussed in their product and marketing strategy. But according to management consulting firm Oliver Wyman, financial services firms across the board are missing out on their share of a $700 billion revenue opportunity. If these companies were to deliver what women want from insurance and credit cards, business loans and investment products instead of taking a ‘gender neutral’ approach to product development, they could be making a very positive impact on their market share and profits.

Putting it into practice
Diversity of thought comes from truly understanding women’s lives and how they are different. As marketing experts, this focus on the customer is something that really stands out for us when we’re looking at financial services products and the way they’re designed. Here are three companies we’ve seen setting that standard for products catering to women’s priorities and goals:

Ellevest are breaking the mould of investment products in all sorts of ways. From membership based packages to private wealth advice, they’re doing smart things to scale their digital offer to clients with different levels of assets. But when we look under the hood, they’re also designing their whole investment ‘engine’ with women’s goals, life spans and career paths in mind.

Knowing that women are often less in control of what they earn and how many hours they work, they’re also helping them choose investment options that offer 70%+ likelihood of delivering on their goals, compared with the 50% that’s typical for other digital advisers. They’re focussed on creating a path to wealth that’s a little more certain, for women who can’t always make career and income their top priority.

Having started her portfolio of financial services companies in the UK at the age of 24, Sam White has brought her innovative, women-focussed approach to the car insurance market right here in Australia. Stella offer competitive car insurance to women on the basis that they are, statistically, safer drivers. Using analysis of actuarial data on accidents, Sam and Stella are bringing women a fairer deal with lower premiums, extra cover for baby gear and handbags plus a $100 reduction on their excess each year as reward for an accident-free driving record.

This fund is rethinking super for Australian women in all sorts of ways. Not only are they the first super fund to refuse to invest in companies with no women on the board, they’re also doing more to address the super gap between Australian women and men. With administration fee waivers for balances under $5k as well as for new parents, they’re taking steps towards making the current super system work better for women.

Supporting women to take personal action on boosting super is also part of their offer, with extra support for contributions splitting, personal contributions and helping women advocate with employers to have their super paid when taking maternity leave. As members of the Financial Inclusion Action Plan network and Economic Security 4 Women,

they’re also active in advocacy on the broader, systemic issues that can lead to women retiring with around 25% less than men in their super savings, on average.

Putting the spotlight on businesses and products like these is our way of celebrating all the positive steps being taken to give women a fairer go with their finances. And it’s something we think all financial services businesses, and their customers, can benefit from.

[1] KPMG/30% Club, Building Gender Diversity on ASX 300 Boards 2020

[2] Chief Executive Women, CEW ASX200 Senior Executive Census 2020

[3] Chief Executive Women, CEW ASX200 Senior Executive Census 2020

 

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