Gender parity – could FinTech be the answer?
While huge strides have been made in recent years, numerous economic gaps between men and women remain. But could technology provide some solutions?
It’s understood that women invest on average 40% less than men. What’s more, analysis conducted by Scottish Widows suggests that women aged between 65 and 74 years old will have saved half as much money for retirement as men the same age.
According to the World Bank, “Fair and equitable access to financial services is a prerequisite for economic security and prosperity. It can improve individuals’ employment outcomes, wealth accumulation, and propensity to start a business.” Could digitalisation help to close the gaps that women still clearly face today?
Financial technology makes services much more accessible and obtainable. We know that when it comes to investing, women lack confidence. But online services not only allow them to dabble in the market without fear of judgement, they can also remove barriers to entry. For example, very few people would feel comfortable approaching a financial advisor and asking them to invest, say, £50 in a fund. But with FinTech, you can start from the comfort of your own home or office with not much more than small change if you like, and gradually build up as you find your feet and your confidence grows.
In July 2022, Betterment, Invstr, Acorns, Wealthbase and Wealthfront were rated as the top current investment apps. Invstr got a special shoutout for education, while Wealthbase was commended for its trading games and contests.
Today, apps also exist that allow people to see all of their pensions in one place. This should in theory help with transparency and understanding – if individuals can see at a glance that their pots might be lacking somewhat, it could provide the impetus that they need to up their contributions.
Interestingly, the UK Government is in fact set to launch a pensions dashboard, which will allow individuals to view all the relevant information in one place, in 2023. That being said, it appears that there isn’t a huge amount of faith in the proposed system. According to recent research from My Pension Expert, very few (20%) individuals understand what the dashboard is, or how it will work when it launches. Similarly, just 16% believe that it will change the way they engage with and manage their pension, while only a small percentage (21%) believe that the platform will help them to relocate their lost workplace pensions.
Private apps do already exist in this field. These include the likes of Pension Bee, which helps combine all your old workplace pensions and SIPPs into one new online plan, as well as the Smart Pension mobile app, which provides real-time information about your savings.
This is still clearly a fairly new area, which means we can expect to see further leaps and bounds in the not-too-distant-future. But in the meantime, all signs are pointing to the fact that FinTech provides a safe space for anyone who lacks currently lacks confidence or would like a bit more control when it comes to managing with future finances.