Why do women form an important demographic for retail investment players?

With an increasing number of women becoming financially self-sufficient, women are the biggest untapped market for players in the financial services industry.

In different social settings, discussions about financial products rarely involve women and while this may be construed as a symptom of the deeply entrenched patriarchal trope that finances is the forte of men, there is another layer to this. Across the world, financial products till date have never been designed keeping in mind the needs of women. While more and more women are joining the workforce now and making significant strides towards being financially independent, their participation in financial matters remains fraught with challenges. The unavailability of products that suit their needs and apathy hitherto shown by financial institutions in bridging this gap is one of the prime reasons for this scenario.

Women-first financial products have to be designed from scratch to be relevant and they should be easily accessible for women from all regions and all rungs of the socio-economic ladder.

Interestingly, the lack of financial products that work for women is not just a problem for the women whose financial inclusion remains dicey but it is also a pain point for financial institutions who haven't paid attention to making their offerings suitable for women. With an increasing number of women becoming financially self-sufficient, women are the biggest untapped market for players in the financial services industry.

Developing financial products for women has to move away from the superficial route of pinkwashing existing products and then presenting them as products dedicated to women. This is because the gender pay gap is likely to persist despite more women joining the workforce and secondly, the earning trajectories of women are always affected because of career breaks that they may have to take to look after their children or family members. These uncertainties and difficulties warrant specific financial products for women that can afford them flexibility and security to sail through these phases. Thus, women-first financial products have to be designed from scratch to be relevant and they should be easily accessible for women from all regions and all rungs of the socio-economic ladder.

The silver lining is that many financial institutions are beginning to acknowledge the possibilities presented by this neglected demographic for growing their businesses. There has been consistent chatter and some are also making real efforts at formulating gender-inclusive financial products instead of only looking at women from the typical corporate social responsibility lens. From insurance products dedicated to women, to bank accounts for rural women to retail investment products – there is cognizance of the impact that women-friendly products can have on the bottom lines of the financial institutions.

Another way in which financial service providers can catalyse the involvement of women in the personal finance spaces is by facilitating conversations and knowledge sharing on financial matters through online communities, self-help groups and information repositories that are easy to understand and readily accessible. Societal constructs have kept women eons from having a say in financial matters and even today they continue to be discouraged from having agency in financial matters. By providing women alternate spaces where they are not restrained from building awareness, financial institutions can inspire them to independently embark on their financial journey.

Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on financial inclusion of women and intends to provide them avenues for financial security.

Preeti Zende, the founder of Apna Dhan Financial Services says, “The post-pandemic era has seen the surge in women investors in the Indian market. This upward movement is a positive sign of women empowerment particularly in the realm of money management. As women’s contributions in the economy increase day by day, this gender is now impacting the country's economic growth. That is why financial institutions are also considering women investors as a major segment in the retail investment space. Different financial literacy programs are being conducted for women investors so that they understand different financial products that they can use for achieving their financial goals.”

Urmila Singh of S9 Financial Planners says, “From sports to building companies, women have a proven track record of success in different sectors. Looking at these success stories, I feel women can participate when it comes to the decision-making of their financial goals and initiate their financial decisions themselves. They just need proper knowledge and some guidance. If more women start taking financial decisions on their own, this will become normalized in society and this will in turn encourage more women to become financially savvy.”

Key takeaways:

- Financial service providers should establish a transparent feedback mechanism so that they are privy to the needs of their women customers.

- Women retail investors should strive to keep themselves updated of the latest offerings in the financial products and services space so that they do not have to invest in products that don’t suit them.

- Different financial literacy programs are being conducted for women investors so that they understand different financial products that they can use for achieving their financial goals.

- If more women start taking financial decisions on their own, this will become normalized in society and this will in turn encourage more women to become financially savvy.

This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund.