FINANCIAL firms need to adapt the way they communicate in order to win female customers, a new report has claimed.
The report, titled ‘Closing the gender gap: Female consumer engagement in financial products’, from law firm Pinsent Masons and the Fawcett Society, highlights a “gender financial security gap” in the UK, which is putting female financial independence at risk.
It noted that more wealth is owned by women today than ever before, with a quarter of women working full time now earning more than £35,000 per year.
However, it highlighted that women are under-protected and underserved by the financial services industry at the moment, not helped by a gender gap in financial literacy; just 40 per cent of women have high scores on knowledge of eight key financial concepts, according to the research, compared to 67 per cent of men.
This then plays into a confidence gap, with women thinking they are less knowledgeable than other people when it comes to investing their money, and this perceived complexity only serving to put them off doing so.
The report notes previous research from the OECD, which found that men have a 10 percentage point higher likelihood to hold some form of investment product compared to women in the UK. In fact, while women are slightly more likely to hold a savings account than men, men are twice as likely (23 per cent compared to 11 per cent) to own stocks and shares.
A host of measures were identified by Pinsent Masons and the Fawcett Society as ways to address this imbalance and better connect with female consumers:
- Build women’s financial capability, by encouraging more girls to pursue STEM subjects and boost their confidence
- Change the perception of finance as an area of male expertise, by helping promote more women in prominent roles in the industry.
- Change the language used in advertising and promotional literature; even when products are ostensibly presented as gender neutral, the language around them may actually be putting women off
- Reframe risk, to raise awareness of the dangers of under-investing
- Innovate and develop new products which enable women to co-operate rather than compete and boast a simple product design.
“There is a strong moral case for encouraging the financial services industry to invest time and effort into better serving women,” said the report. “Women face risks over their life course which are distinct from those men face.
“When financial products are subconsciously designed with men in mind, they are unlikely to properly address these distinct risks.”