From January to March 2021, the C Collective organised a research and innovation project to understand women's attitude to finance, and create solutions to empower them to invest for good.
What led us to run a Hackathon on Women and Impact investment?
We wanted to use the power of design thinking to address two gaps:
the gender investment gap.
the impact finance gap.
Key learnings from our research:
We conducted 15 qualitative user interviews with women in the UK and analysed a wealth of existing research.
We're excited to share the key insight as well are the user profiles we created to support the innovation process.
Lack of confidence and perceived knowledge
In general, women lack the confidence and knowledge needed to invest more. But the nuance which was highlighted by both primary and secondary research is that women’s lack of confidence negatively influences the way women perceive their financial literacy.
Many women we interviewed already had some significant investment products such as Pensions, ISAs and Premium bonds without considering themselves as investors. Basically they need to know a lot more than men before taking action.
"Women do not have the confidence to invest, they’ve not been brought up with this education. The women who invest have a finance study background and hence have the knowledge and confidence’" Sanita
Relative risk aversion
There is a view that women are more risk-averse and this holds them back from investing more. However there are mixed feelings towards this, which the evidence supports. Whilst certain organisations have published data that suggests this is an outdated view, such as Unbiased and the Wisdom Council, ‘Yes She Can’ study, our own research suggests that risk perception is correlated to a lack of confidence and perceived knowledge.
Our interviews showed that women in the conscious and angel investors profile are OK with taking risk, as long as they have the right information to make their investment decision. At the other end of the investment journey, there is a vicious circle of a lack of financial literacy leading to a lack of confidence, risk aversion and inaction. It can be broken with empathy, education and inspiration.
"Risk prevents me from investing if the capital at risk is not affordable. I’ve had no advice on impact investment and my general knowledge is not there yet" Vicky
It’s a man’s world
Most women see the finance sector as a man’s world. It is designed by men for white men in dark suits, from terminology to advertising.
For many of the women we interviewed, the old men in the grey suits were the first image that came up when thinking about investing or financial advisors. It’s a turn off, because it doesn’t enable the trust or inspiration they need.
The lack of female role models and trusted female figures do not help. For example, from our user personas, the "Ila the Innocent" profile highlighted that a huge barrier to investing was the absence of influencers in her circle to help her with the subject.
The societal stereotypes about men being the bread-winner and women the family carer are also hard-wired in our systems, creating unconscious biases.
UBS Wealth Management, in their ‘My money moves UBS’ 2020 report, surveyed 2000 women and men across the US. They found that half of married women still let their spouses take the lead on long-term financial decisions.
‘By seeing less guys in grey suits talking about finance and investing, I think women would be more interested in investing’ Frankie
Too much jargon
Time and time again, both the primary and secondary data highlighted the fact that the finance sector uses far too much jargon that women tend to find difficult to understand. This type of jargon can be a real turn off as it can become confusing and frustrating.
"I don’t know where to start, even if i research it, I read a couple of sentences and don’t understand this, it's too complex and haven’t got the headspace. It's such a foreign world" Nadia
Women are definitely interested in investing for good
It's clear from the research and the user personas that women have a keen interest in investing, but the reality is that they often don't know where to start or that investing for good (impact investing) is even possible.
Through our qualitative interviews, we found that women care about value alignment when it comes to where their money goes. And when they understand what impact investing is and that it is within their reach, they are definitely interested
"I want to invest in things I believe in, with a positive impact on the planet and on people' Nadia
The problem is that overall investing, and therefore, impact investing, is a world that many women feel alien to.
To crystallise our qualitative research we created user personas which capture the needs, motivations and behaviours of hypothesised users. They can help service providers put themselves in the shoes of their users to create meaningful solutions.
A huge opportunity to get women to invest for good
Our research has highlighted the complexity of women’s needs and attitudes to finance and impact investment. There's no one size fit all approach and user personas are a great innovation tool to design solutions around specific users needs and pain points.
These are the key areas of opportunities we see;
We need to start educating girls and boys at a younger age to break stereotypes, get finance on their radar and give them the basic financial literacy foundation on which they can grow.
Leverage female peer-to-peer support. Creating safe spaces for financially savvy women to support and inspire others will encourage women to get more involved in taking ownership of their personal finance or working in finance. Impact investment can inspire action.
Understanding that money can have a positive social and environmental impact, without even having to go through complex investment products, can really spark action.
If you have a business problem, innovation or research needs that you feel design thinking could help with, please get in touch for a friendly chat!