With each tech innovation, there has been a massive shift in the way the masses function. One thing that remains constant to this day is the struggle that women need to face to make a name for themselves in a world heavily dominated by men. One such sector is the fintech industry.
A report from 2021 by Findaxable stated that women hold only 19% of executive positions in fintech companies, and more shockingly, only 11% hold a place on the board of directors, and a mere 1.5% of women are founders. This lack of representation not only highlights the barriers women face in the industry but also brings up questions about how well traditional finance has served the needs of women.
The good thing? Fintech is breaking the wheel. By eradicating barriers to access, rethinking creditworthiness, and enabling new forms of financial participation, fintech is creating pathways toward women’s financial equality.
So what are the remaining obstacles? How can they be overcome? And the most crucial part, how is fintech actively empowering women to take control of their financial futures?
Let’s delve in!
Closing in on the Gap
One of the brilliant contributions the fintech industry has made is expanding easy access to financial offerings.
In dormant regions where women are excluded from traditional banking institutions, mobile banking and digital wallets have proven to be a catalyst. Platforms such as Kenya’s M-Pesa assist women to save, transfer, and manage money without depending on physical bank branches, which are sometimes not accessible depending on the geography and mobility constraints.
With the removal of the need for heavy paperwork processes, it gets easier for women to open accounts, manage their finances, and participate in the digital economy. This becomes a step toward independence.
Democratizing Credit and Lending
Women entrepreneurs have struggled for a decade to get business loans, much more than their male peers. Fintech helps to rewrite that story. With AI underwriting and data-driven credit scoring technology, online lenders are evaluating creditworthiness based on alternative data, like payment behaviour, utility bills, and mobile transactions, rather than traditional credit scores.
This sort of approach is beneficial for women without long credit and banking histories, but who are still financially responsible, and gives them more equitable access to the capital they need to start and grow businesses.
Tailored Financial Tools
Fintech is also opening the way to fulfill the special financial status women encounter, including income disparities and career interruptions to attend to care. Online budgeting tools, investment managers, and retirement planners are even becoming tailored to mitigate these problems. E.g., robo-advisors today have goal-oriented investing that is guided by women in their lives, ensuring that they can build wealth comfortably. Insurtech is coming in with micro-insurance and customizable policies that take into consideration each woman as a worker, caregiver, and business owner.
Education and Empowerment
Far beyond products, fintech systems are employing financial literacy within their mechanics. Investing, savings, and debt management apps that educate individuals about various methods of saving, using financial instruments, and managing debt have given rise to a generation of confident women in finance. A lot of fintech organizations also carry mentorship programs or collaborations to guide women entrepreneurs and investors as well, both in terms of knowledge and networks.
The Broader Impact
Economically liberating women empowers even economies as a whole. Researchers have coined a clear value that when women are in control of resources, they invest more and can support education, health, and community development. Fintech is boosting economic growth by empowering women with access to capital, savings, and financial planning, which is fast-tracking both the social and economic growth.
What’s Next
Fintech can go the next step further by integrating the concept of inclusivity into its DNA. This includes the creation of products that better represent the realities of diverse people, the fact that AI models should not perpetuate past bias, and expanded cooperation with governments, non-governmental organizations, and financial institutions in order to reach more people.
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