When an industry is skewed to a particular demographic (say, men), it’s reflected in who companies hire, who they design products for, and who they reach with marketing. The banking industry is one great example. Both bankers and bank account holders tend to be men, especially in developing economies. And little wonder, given that even women in the US couldn’t open a bank account until the 1960s.
One startup rising to challenge this gender gap is the neobank Jefa. Founder and CEO Emma Sánchez Andrade Smith has been working in finance and emerging markets for seven years across five continents. Now she’s putting that expertise to the task of redefining banking for women in Latin America.
“When I was growing up,” she says, “my grandma used to say, ‘A woman who controls her finances controls her life.’ This is the heartbeat of our mission.”
Achieving that mission comes down to answering some classic questions that will benefit any business taking on adversity: why, how, where, who, and when.
Question 1: Why does the industry need to change?
During my career, I’ve learned a lot about the financially excluded. But it took me a while to learn the most important insight: the huge majority of the world’s financially excluded are women.Emma Sánchez Andrade Smith
Smith’s career working with the financially underserved involved working with Eversend, a neobank for Africans. During her time there, she began to notice something curious: an overwhelming majority of Eversend’s customers were men. She asked some of her fintech connections if this was standard, and “the answer was a resounding yes.”
The global gender gap in banking is a stark picture: 1.3 billion of the world’s 1.5 billion unbanked people are women, 42% of women in general don’t have a bank account, and 75% of the women who do have an account are dissatisfied with it. To make matters worse, women are still the primary caregivers of families worldwide. So when women lack access to financial services for themselves, it creates a ripple effect of negative impact.
“Access to financial services reduces vulnerabilities, creates jobs, and increases security,” says Smith, “all while immensely strengthening our global society. Moreover, the majority of unbanked women are in emerging markets, which is where we’ll see superior and diversified economic growth. They are the future.”
So the why of changing the banking industry to make it more inclusive for women is simple: empowering women with financial literacy and independence will ultimately empower everyone.
Question 2: How do you reboot an industry?
It is time to dismantle the legacy assumptions of what a bank should look like. We need to strip down everything we think we know about banking and rebuild from the ground up.Emma Sánchez Andrade Smith
However convincing the numbers or inspired the team may be, every new venture still needs a place to start. In the digital age, that often means data collection—something that proved to be harder than it sounds for Jefa.
“Most banks don’t have gender-disaggregate data, so we actually know very little about what women’s financial behavior looks like,” says Smith. “We need to collect data about women’s financial lives and build a product that finally meets their needs.”
Looking at the way human history has waffled on women’s rights to control finances, perhaps it never occurred to traditional banks that gender-specific offerings or feedback would be worth gathering. Whatever the reason for the oversight, the problem won’t fix itself. Today, 90% of fintech founders are still men, and that leads to a natural male bias in fintech marketing and products.
The how of rebalancing the banking industry for women begins with data collection to fill the gaps and relearn what we think we know. It’s a long game, but comes with a big payoff.
Question 3: Where do you (physically) start?
Women control 80% of all household spending globally, and this represents an $8 trillion opportunity in LATAM alone.Emma Sánchez Andrade Smith
The gender gap in banking is a global issue with global repercussions, but taking on the world all at once is a recipe for failure. Companies seeking to make a real, lasting impact need to be strategic from the start.
In Jefa’s case, this meant narrowing down their market to Latin America, starting with Mexico. Smith says the sheer number of unbanked women who both work and control household spending is a “dream landscape—women are earning money and looking for somewhere to manage it.” With a team that knows the region and a market especially ripe for change, it just made sense.
Smith also says that banks in LATAM don’t work for women because of five barriers that Jefa is aiming to address:
Barrier 1: A deposit minimum (all the more challenging, as women statistically earn less)
Solution: Jefa will have no minimum
Barrier 2: A requirement to physically visit a branch to open and manage an account
Solution: Jefa is an app
Barrier 3: Confusing products (remember, women generally have lower financial literacy)
Solution: A simple, intuitive design based on behavioral psychology and nudge theory
Barrier 4: Marketing channels designed by men, for men (think soccer jerseys branded with bank logos—women require more upfront investment, and the margins are smaller)
Solution: Marketing channels that put women first
Barrier 5: A requirement for proof of occupation to open certain accounts (unsurprisingly, “housewife” doesn’t count)
Solution: No such requirement
Once the landscape—the where—is identified, barriers to local customers can be addressed one by one through digital solutions and customer-first design decisions.
Question 4: Who are your customers?
Women make great customers—they default less, they get better returns, they are more loyal, and they share with friends more often than men.Emma Sánchez Andrade Smith
“Women” is, to put it mildly, a broad customer base. Knowing how to reach customers starts with knowing who those customers are—in marketing terms, targeting and segmentation.
Through her work with Eversend in Africa, Smith learned that localization isn’t a plus—it’s a must. With over 500 spoken languages and 400 indigenous peoples, LATAM is no exception.
At the same time, in their pursuit of data, Jefa happened upon an interesting pattern: women seem to have more in common with women around the world than they do with the man next door. Part of this is about facing the same obstacles (domestic violence, gender roles, etc.), but it’s also about having the same advantages (stronger family ties and emotional intelligence).
So while Jefa will need to adapt certain aspects of its marketing, it’s not a big leap, Smith says, to guess that women share certain patterns of financial behavior.
Understanding who your customers are means identifying similarities and distinctions from the wider population.
Question 5: When do you make your move?
Now, more than ever, is the time for banks to go digital, to provide an exceptional user experience, and to offer more services to more women.Emma Sánchez Andrade Smith
They say “timing is everything,” but as the whole world learned en masse in 2020, you can’t always predict what’s around the corner.
Jefa incorporated on June 15, well after lockdowns had begun. This meant suddenly the team was working remotely and across time zones. Customers were literally out of reach, and that meant making a decision: adapt or abandon the mission.
Jefa chose to adapt.
“We’re creating very organized and scalable systems to work productively,” says Smith, “and these are a direct result of being disrupted in our earliest days. She goes on to make three predictions for the post-COVID-19 banking industry:
1. Physical banks and legacy software will struggle with digital transformation. “We will see less use of cash and fewer contact points—more payments will become digitized, like they are with Jefa.”
2. The experienced and attentive will thrive. “During and after crisis periods, people want simplicity, awareness, transparency, clear expectations, and frequent status updates.”
3. Women will be disproportionately affected. “More women than men work in affected industries like health and tourism, dominate informal economies, and still shoulder the burden of family and childcare. They will need access to financial services to recover.”
If an industry is in need of change, that change needs to come no matter what—or when.
Legacy financial institutions were built to work for the wealthy. They don’t work well, if at all, for those at the bottom of the pyramid. But the crazy thing is, this bottom of the pyramid represents the majority of people in the world.Emma Sánchez Andrade Smith
No matter what the pandemic has in store, opportunities for startups, financial or otherwise, are more prevalent than ever. The digital revolution is accelerating, and emerging business leaders with a mission of equality and positive change will be the ones to shape the future. Consider the why of your mission, how you will address it, and where you are most needed. If it’s the when that’s holding you back, find strength in your vision and the people helping you achieve it.
Jefa is eager to share the ecosystem with other startups seeking change.
“I cannot emphasize enough how much we need more innovation in this space,” says Smith. “Not only for women, but for everyone who is underserved: indigenous peoples, immigrants, people of color . . . So get to work! The world needs your vision.”