U.S. FIs May Be Losing Out on Nearly $8B in Investable Assets by Not Properly Engaging Women

November 4 — U.S. financial services firms are missing out on an estimated $782 billion in investable assets that they can realize by strengthening their relationships with women. That’s according to a report, Winning Over Women, recently released by Kantar. The study combines consumer surveys with financial services executive interviews, focus groups and market studies to provide a comprehensive and holistic look at how financial institutions are approaching women today as customers.

The analysis found that the financial services industry is significantly lagging in its understanding of women in the workforce; the high percentage of senior management in companies that women comprise; the high rate of female ownership of businesses; and both the extent of assets that women control and the fact that they are the primary source of income in many households today.

The integrated research looked at the motivation of women today as relates to financial planning and management and revealed key insights into their needs:

Context, Confidence and Engagement

More women are realizing today the dream of financial success that has long been held up as a cultural ideal, yet fewer women than men are financially confident, with only 23 percent being highly confident, compared to 37 percent of men. Moreover, 47 percent of women express lower confidence financially. This may be related to the study’s finding that the cultural taboo of not talking about money disproportionately affects women.

Additionally, for women, finances are inextricably tied to families and home life, reflecting who they are as people. As a result, women are less tolerant of risk then men. When investing, nearly twice as many women as men said they would not be willing to take any financial risk, but understand that in doing so they may not make any financial gain. This is illustrated by the fact that forty percent of women said they were not comfortable with their household’s current amount of debt, compared to 30 percent of men who said the same. Women’s confidence and engagement related to long-term borrowing is also lower than that of men.

When it comes to bank, despite being less satisfied with banks than men, women are more likely to be loyal customers, primarily because most are too busy to make a change.

Gender Perceptions 

Despite gaining control of money, women still see investment as a “man’s world,” and women express feeling less informed about invest opportunities. While women know investment education is needed, they cite lack of time and energy to learn all they feel they need to know — only about 35 percent of women reported they try to keep in up with financial developments (compared to 50 percent of men); less than 30 percent said they look at financial websites for information (40 percent of men); and less than 30 percent usually speak to a financial advisor (almost 40 percent of men).

A combination of the pay gap, lack of engagement and financial education leads to a significant gap in investable assets among men and women, with the study finding that women have on about $156K, compared to more than $200K for men. As a results, women feel less positive about their financial future than a range of other factors; are less likely to feel in control of their financial future (65 percent as compared to 70 percent for men); and are less likely to feel they know what steps to take to correct their financial course (60 percent, as compared to 68 percent for men). This leads women to seek financial providers they can trust, but the study found that financial planners are not serving this demographic, instead resorting to tactics geared toward men. Only 61 percent of women reported their financial services provider meets their needs very well.

“Winning over women requires very different approaches to them throughout their financial lives,” said Anita Watkins, global head of qualitative, Kantar. “Our research shows that financial institutions need to build trust and invite women to engage. They need to involve women as customers and not confuse confidence with competence. And most importantly they need to empower women, not diminish them. Banks and advisers need to get to know their female customer as a person. Step into her world, listen and reflect what you hear.”

Kantar suggests FIs take the following steps to better engage and empower women:

  • Improve retail environments through spaces that enable connection and communication.
  • Enhance communications so that they are more authentic — and more visible to women. When communications are done well, women are actually more responsive than men, making it even more critical that hey actually see the message.
  • Deliver on what is promised.  More than 80 perent of women cited this as an important factor.

The study is based on interviews with 2,500 men and women including interviews with executives at financial services firms and focus groups with women at varying levels of confidence in personal finance, all conducted in October and November 2018. The report also utilizes analysis of Kantar owned data sets.

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