India has 87% fintech adoption rate – the highest in the world, 1.26 billion digital IDs, 658 million internet users, 30 million merchants who accept QR codes and the digital lending and insurance sectors are expected to grow to $350 billion and $222 billion respectively by 2025. (Barclays Rise Report) While women form 50% of the country’s population, financial and digital literacy of women is lowest, as per World Bank’s Global Findex Data.
The golden rule of money management – the 50-30-20 rule suggests that you save at least 20% of your income. Spend 50% on your needs such as groceries, utilities, healthcare, housing, etc and not more than 30% towards wants such as restaurants, movies, concerts, etc. Warren Buffet advises: Do not save what is left after spending but spend what is left after saving." Women are very disciplined savers. They are more likely to save regularly in SIPs or Recurring deposits. They are also very prudent in paying timely EMIs and have the lowest default rate.
Also Read: Three money lessons you can learn from these female entrepreneurs
What are micro financial products? Young women who have just entered the workforce or those working as interns on stipends or those doing part-time jobs to gain work experience or earn second income to support families – for them micro products are a great way to get started financially. When one opens a zero-balance savings account in 10 mins digitally or starts an SIP with 100 ₹or buys travel insurance on the go while buying travel tickets – she is consuming micro financial products made possible through fintech solutions and embedded finance technology.
Here are the reasons why young women would prefer micro digital financial products:
Speedy: Young women especially GenZs like speed and want everything readily available at their fingertips. They cannot imagine that opening a bank account earlier used to take 3 to 5 days. Today she has the option to open bank accounts or avail loans digitally in a few mins, made possible through e-kyc and video-kyc. The fact that they are digital natives, makes it easy for them to consume digital only do-it-yourself products made quickly through technology. Modern working women while juggling family and work responsibilities, are usually facing time-crunch. Hence these quick fintech products enable them to make financial decisions without any worry.
Easy: The young women who are handling money for the first time have little to no knowledge of financial wealth building. Hence, they prefer simplification of finance provided by various innovative modes of interaction on fintech apps like gamification, goal-based investing etc. Their goals are majorly marriage, education, kids, family, medical and vacations. Finance linked to these major life goals make it easier for them to understand and embrace financial commitments for the long term. Embedded finance is also an attraction for them, where finance is offered at the point of sale on third party non-financial applications, thus making it extremely easy, for example payment and credit options on ola/uber, BNPL while purchasing home appliances, health insurance while booking health check-ups, etc.
Also Read: Want to become financially empowered? 4 key things to know
AI and Analytics based: Fintechs offer personalised rewards and offers based on use of Artificial Intelligence and Advanced Analytics. Product recommendations based on AI data, investment and budgeting tips, loan eligibility, price comparisons, customised wealth and investment triggers and plans, enable women to make appropriate investment decisions suitable to their unique needs and life cycle stage. While private investment advisory comes at a cost, these analytics based investment plans are mostly free, quick and fine-tuned to each woman’s specific risk and goal profiles, and hence most preferable for women beginners.
User friendly: Young women are accustomed to smooth user-friendly UI/UX User Interface/User Experience in mobile applications. Building interfaces like their consumer brands like social media, delivery and e-commerce apps, digital banks and fintechs, can distinguish their financial experience from traditional banks. This is one of the most significant reasons why young women may prefer fintech apps where everything – loans, investments, savings, payments, insurance, etc. can be availed of in 5 to 10 clicks.
Service: Young women today are very demanding and expect round the clock 24 hour service. The new age fintechs, harnessing their technology, are able to offer quick grievance support with social media platforms like Twitter, Whatsapp, chat and voice bots, AI bots etc. This makes them extremely attractive and highly scored on customer satisfaction index or CX ratings.
Financial and digital literacy is of utmost importance for women to be able to enjoy the benefits offered by the digital platforms. Hence industry initiatives such as the Fintech Olympiad by India Fintech Forum, through its Hackathons and Webinars play an important role in making them learn about fintech, digital and applied finance at a young age.
The new-age fintechs and digital solutions are revolutionising the financial space through micro financial products and transforming today’s new generation women to become financially fit, financially free and financially fearless.
Disclaimer: The views expressed in this article are personal opinions and readers are advised to consult with a financial advisor before making any investment decisions.
Jasmine Gupta, Chief Digital Officer – Pahal Finance and Founder – MeitMoney
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Published: 06 Mar 2024, 04:36 PM IST
