Do Australian women need their own financial services?

Until recently, most financial services have been fairly gender neutral. Apart from a few credit cards decorated with flowers and images of Hello Kitty, the financial industry simply hasn’t thought that women need their own services.

Unlike other areas of retail where it’s normal to offer gendered products, such as in clothing and cosmetics, offering gendered financial services seems to make little sense. After all, most people use a fairly standard range of services–bank accounts, credit cards, insurance and mortgages–and consumers have demanded little in the way of personalization in their design and use.

But all this is changing. A rapid increase in the number of small financial services (fintech) companies has resulted in a large number of new products on the market. And some fintechs are also targeting specific groups of people.

Women in particular can now access a wide range of financial products designed for them specifically. These include car insurance, health insurance, financial management apps, investment apps, and funding for female entrepreneurs.

But why design financial services specifically for women? Why might women want them, and can they really benefit from them?

Financial services for women set out to address two important gender gaps that exist worldwide. The first is that women’s financial literacy tends to be lower than men’s. This begins at an early age: male children tend to receive more financial education than their sisters. Having been socialised into thinking about finances it is more of a habit and they don’t need to invest as much time into learning about new products and services. Women, on the other hand, often have to learn about finances from scratch when they are adults, and they must invest more effort than men throughout their lives.

The second gender gap is the wealth gap between men and women. Globally, women control or influence just 27% of wealth, and the average global gender wage gap is 12.42%. Women in Australia earn less than men, retire with fewer savings, and are at greater risk of living in poverty in old age (but are making gains in property ownership).

Financial services designed for women generally try to address both these gaps by providing features women find useful and talking to women in a way that is relevant to their lives.

For example, US-based Ellevest is an investment app that helps women make investment decisions that suit their lives, taking into account factors such as the gender pay gap, career breaks, and women’s longer lifespans. Tellingly, their slogan is “Ellevest was built by women, for women. The financial industry wasn’t.”

In Australia there is a small but growing number of digital financial services aimed at women.

Verve Super offers Australian women superannuation tailored to them.

Verve Super calls itself “Australia’s first ethical super fund, for women, by women.” They point out that on average Australian women retire with 35% less super than men, and provide women-oriented services such as parental fee support and a ‘support squad’ of like-minded women who can rally each other to save more super. Their focus on ethical investment is also a strategy to appeal to women: research shows that women are more likely than men to care where and how their money is invested.

Travel with Jane tailors travel insurance to Australian women.

In insurance, Travel With Jane provide travel insurance specifically for Australian women. Until recently they offered a discount that matches Australia’s national gender pay gap of 16.2%. Now they have changed directions and are instead donating 10% of all sales to partners who can help narrow the pay gap. As with Verve, the company doesn’t just offer a tool, but a chance to engage with social causes.

There are also services that aren’t intended for women, but which women gravitate towards. Afterpay is an excellent example of this. Originally designed for cash-strapped and debt-shy millennials, Afterpay has garnered enormous popularity with Australian women. A Facebook group called “We Love Aferpay”, members (mostly women) discuss where they can use Afterpay to get the best deals. They share memes joking about using Afterpay to hide the price of their purchases from their husbands. And, tellingly, the Afterpay website has a distinctly female feel to it.

But why do women love Afterpay? Afterpay essentially replaces the old lay-by services, but lets you take home your purchases immediately. Women’s appreciation for the service makes sense given that women tend to manage household budgets and do the vast majority of shopping for their families. Afterpay isn’t just for personal use, it allows them to smooth consumption for their households.

Will these gender-targeted services last, or are they just a fad? If the statistics on financial inequality are anything to go by, it does seem that Australian women need them as much as other women around the world.

But let’s be clear: it isn’t just that women need these services for themselves. They also use them to manage the finances of their families. Providing financial services for women ultimately benefits a much larger segment of society than the women who favour them.

To learn more about financial services for women worldwide, see the reports Female Finance: Digital, Mobile, Networked (2020) and Female Finance in Figures (2021).