Financial services companies can play a critical role in advancing women’s economic empowerment. The sector can focus on many different approaches, which can include promoting female talent within companies, developing financial products and services for women, and ensuring fair opportunities for women working in the value chain. In addition to contributing to global development goals, focusing on women’s empowerment can create new business opportunities. And increasingly, investors may also assess a company’s performance in this area through new products such as Bloomberg’s Financial Services Gender-Equality Index, which was launched this year and provides gender equality data by assessing companies’ workforce gender diversity statistics, employee policies, product offerings, and community engagement.
What does advancing women’s empowerment look like in the financial services sector, and what are some practical steps to take to spur progress in this area?
Earlier this year, BSR published a report, “Building Effective Women’s Economic Empowerment Strategies,” that encouraged companies to apply a holistic and integrated approach in empowering women.
While the report highlights eight building blocks for such an approach, there are three that should serve as thought-starters for the financial services sector.
Workforce: Providing Access to Safe and Equitable Employment Opportunities
Female employees are concentrated in the lower occupational categories of the financial services industry and remain vastly underrepresented in leadership and management positions. The absence of women leadership in the finance and banking sector can have both business and societal implications, including a lack of effective products for women customers and a continued fueling of the significant gender pay gap in the industry.
To address these gaps, financial services companies can assess their hiring, promotion, and people management processes and implement actions to promote a more diverse, supportive, and equitable employment environment. Activities can include offering gender-bias training, creating employment opportunities and competitive benefit packages to attract and retain female talent, and evaluating recruitment processes and channels to better engage with women. Lastly, companies should consider increasing transparency and disclosure on the company’s efforts as a way of being externally accountable.
For example, Bank of America, with a global workforce that is 56 percent women, has programs and partnerships to develop female talent at all levels and includes targeted campus recruiting initiatives, a global women’s conference to convene top female leaders, and more. It also boasts progressive workplace policies including a recently announced extension to paid parental leave.
Products and Services: Enabling Access to and Control over Economic Resources and Opportunities
Women continue to be a demographic with a huge—and unmet—demand for financial products and services. Compared to men, fewer women globally have an account at a formal financial institution and have access to the capital needed to grow their businesses. To complicate matters further, many banks in low and middle-income countries view women-owned businesses to be higher risk and lower return, resulting in loans with higher interest rates.
However, access to savings and credit for women has the potential to spur economic growth globally. In India and China alone, women’s earnings will increase from US$1.6 trillion in 2010 to US$5 trillion in 2020. Companies can identify challenges and needs in different markets and ways to fill the gap, which may require innovation and investments to develop new or improve existing products and services targeted for women. Areas to consider include digital solutions to help women access and create bank accounts, make payments, get work compensation, set up loans, manage finances, and more. In countries or contexts where there might be greater business risk involved or the need for market expertise, companies should identify partners who can support their initiatives.
For instance, the International Finance Corporation, Access Bank, and The Coca-Cola Company have partnered to fund a US$100 million, three-year joint initiative to provide access to finance for thousands of women entrepreneurs in emerging markets in Africa and elsewhere.
Community: Empowering Women through Education and Training
A key first step in women accessing and benefitting from financial services and products is having a basic understanding about such offerings and how to access and use them, as BSR’s HERfinance does. Many women face barriers in certain markets when it comes to saving money and accessing credit and often are in the dark on basic financial literacy.
In additional to the social impact benefits, helping provide services to improve financial literacy can potentially help grow the customer base, enhance the talent pipeline, and improve employee engagement. The needs for women can vary across markets but could include training on ATM use, saving money, making mobile payments, or managing business finances for women entrepreneurs. Financial services companies can assess opportunities based on social impact potential, market need, and alignment with business strategy and should consider partnerships to expand reach.
For example, MasterCard has funded a Mercy Corps program in Nigeria that aims to empower young women by connecting them to financial literacy, entrepreneurship training, and financial services. Participants receive a national electronic identification card that is linked to a mobile savings account. And Voya Financial has invested in a program with Girls Inc. that provides girls aged 12-18 an opportunity to invest US$50,000 over a three-year period and seek mentorship from Voya Financial employees, creating both a talent pipeline and employee engagement opportunity.
Taking practical steps to integrate a conscious approach to promoting women’s economic empowerment is something financial services companies should do as good practice. Doing so can result in both short- and long-term value for business, the economy, and society.
Learn more about putting women’s empowerment efforts into practice through BSR’s Business Action for Women collaboration.