Mortgages, compound interest, emergency funds…how many of us genuinely understand what these are and how they work?
Financial literacy – defined by the World Economic Forum as the ability to understand and effectively use financial tools - is crucial for anyone past the piggy bank stage. From our UK study on financial attitudes and behaviours, we found that only one in five feel they have a 'high' level of knowledge on financial matters.
The recent introduction of the Financial Conduct Authority’s Consumer Duty regulations recognises that there is more to be done on the industry’s part to make financial information more accessible, and therefore, more understandable.
This financial confidence is particularly low amongst women – women are less confident and savvy when it comes to financial services and products than men (16% vs 11% respectively). This fact is unsurprising when you consider that seven in ten millennial women say they have never been taught how to manage money (compared to four in ten men).
This is where financial feminism steps in; a growing feminist movement aiming to achieve financial equality for women. But the real question is: how?
What is financial feminism and how is it growing?
Financial feminism seeks to empower women through financial education, helping women take control of their finances and build their wealth. The movement is currently gaining traction in online spaces (especially TikTok and Instagram) thanks to female ’finfluencers’ – financial influencers - creating digestible financial content aimed at women looking to understand and better their financial situations. Whilst there is much anecdotal evidence to show that these finfluencers are making a tangible positive difference in women’s lives, ‘finfluencing’ is also proving to be a successful business. For example, Tori Dunlap in the US has created a following of 2.2 million followers on TikTok and over 500k on Instagram after establishing herself as an outspoken financial feminist on her blog Her First 100K.
That’s not to say that financial feminism is only circulating on social media – some women have created websites and membership services to make their mark in this growing movement. For example, Rainchq not only provides a membership service where women can receive financial coaching, but has also created a 12 month financial academy and affirmation cards designed to motivate and shape a positive financial mindset.
Tori Dunlap's book, Her First 100K, has become a New York Times Best Seller and her popularity has led to a range of brand partnerships with financial brands and non-financial brands alike, such as BlackRock, PayPal, Four Seasons and BetterHelp. For example, a partnership with Dell aimed to giveaway laptops to women in the Her First 100k community and a partnership with CapitalOne materialised in personal finance classes held in-person in several US cities to teach women.
Why does financial feminism matter?
Current financial gender inequality
Whilst it’s natural to think that things have improved for women over the course of history, there is still an unlevel playing field when it comes to personal finance. Prevalence in low-paying roles, the gender pay gap, and more household spending commitments leave women worse off financially and more susceptible to financial shocks like inflation, just as is happening in the current cost of living crisis. According to a study conducted by Legal and General in July 2022, women were only 14 days away from the breadline, whilst men were 28 days away. This inequality spans a lifetime - lower average incomes, shorter working lives and longer life expectancies mean that women are hard-pressed to save for retirement; the average UK woman in her 20s is on course to have £100,000 less in private pension savings at retirement than a man of the same age.
Female representation in the finance industry
There’s no doubt that the finance industry is trying to turn away from its reputation as an exclusive boy’s club to an open, welcoming industry at all levels – in 2020, 40% of JP Morgan’s board members were female and 39% of Morgan Stanley’s global employees were women.
Unfortunately, despite these efforts, female representation is still a very real issue in the industry; in 2021 women only held 21% of board seats, 19% of C-suite roles and 5% of CEO positions among financial services institutions across the globe.
Outside of established financial institutions, the financial feminism movement has encouraged some women to become entrepreneurs in this industry; for example, the female-founded app Your Juno offers expert-led video courses on topics like investing and mortgages to close the gender gap in financial literacy. Not only are women becoming involved in finance, but an example is created whereby women can see other women prospering in this space and become encouraged to involve themselves in financial matters, even if only on a personal level.
Women listen to other women
It’s been found that women’s intentions to invest their money increases when female-curated digital stories are used in social media content, created for and aimed at women. Essentially, the more women that are exposed to the financial feminism movement, the more women will be exposed to female-curated financial information that will encourage them to take action and make strides towards a brighter financial future.
So, what does this mean for your brand?
Shifts in consumer wants/knowledge
The obvious trend is that female consumers are no longer burying their heads in the sand about money. A shift is occurring where women are seeking financial information that not only makes sense to them – no unnecessary Wall Street terms here please – but is also actionable in their own lives. The financial culture which we’re familiar with is based on patriarchal ideals and language which doesn’t resonate with or cater to women, making this shift not only an exciting change, but a necessary step.
When thinking about communications, remember: include actionable information and drop the jargon!
Opportunities to unlock a new market
In 2017, it was found that financial institutions were missing out on £130 billion in revenue by not adjusting their client experiences to appeal to women.
To avoid losing out on capturing this emerging market, brands operating in the finance space need to ensure they are factoring women into the equation (pun intended) and make women a key part of their target audience.
Brand partnerships with ‘finfluencers’
We’ve already discussed that women listen to other women - use this to your brand’s advantage. Brand partnerships with female finfluencers in particular can prove to be an excellent way to reach this new audience and raise awareness of your brand’s products.
As the financial feminism movement grows and looks to level the financial playing field, it’s imperative that brands take note: women are taking back their financial control. Ditch the confusing industry jargon and facilitate empowerment through easy-to-understand tools, information and support.