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Persistence gets finance flowing for women

07:30am March 05 2020

Tradition on display at this year’s annual Financial Alliance for Women Academy hosted in Quito, Ecuador. (Supplied)

When you start to see real impact materialise after years in the making, gee it’s satisfying.

It recently occurred via an organisation you’ve probably never heard of: Banco Pichincha, Ecuador’s largest private bank.

The 114-year-old bank recently hosted this year’s annual Academy run by the Financial Alliance for Women (FAW) – an alliance formed 20 years ago by four banks, including Westpac, with the aim of improving women’s access to capital, finance and non-financial services.

What’s impressive about Banco Pichincha’s selection as host for the Quito-based Academy, where I had the privilege of guest lecturing, was that less than five years ago, the bank didn’t have a customer proposition tailored for women.

It’s possibly not that surprising given around 63 per cent of companies operating in Latin America say gender diversity is not a strategic priority, according to research by FAW.

But since becoming a member of FAW in 2013 and participating in the 2017 Academy in the Dominican Republic, Banco Pichincha – like many other banks around the world – began to realise the value of the rapidly rising “female economy”, currently estimated to be larger than India and China’s economies combined.

So, the bank developed financial and non-financial services that recognise the value of women as customers, who often approach financial decision-making differently to men, and the need to build women’s confidence to help them grow their small businesses, apply for funding or select the right financial products.

Rachael McKenzie guest lecturing at the Quito Finance Alliance for Women Academy in January 2020. (Supplied)

The potential economic flow on effect of this new direction is enormous – not only to the women of Ecuador, but the country’s economy and society.

The credit gap for women-owned small businesses in South America is estimated at a staggering $US93 billion, women represent 40 per cent of the region’s economically active population, and the number of working women is expected to grow by 20 million between 2017 and 2030.

And research shows that if women are given the ability to start and grow a small business, they reinvest in their children’s education and their community.

Tradition on display during the Academy in Quito. (Supplied) 

Banco Pichincha’s new direction is exactly the type of impact envisioned by the founders of FAW – formerly known as the Global Banking Alliance for Women – back in 2000. From its original four banks, membership has grown to 62 financial services companies operating in more than 135 countries. A survey of 25 members show they are serving 32 million female customers, with $US88bn in lending and $US90bn in savings.

However, there remains a long way to go to realise the full value of the female economy – and there is no doubt it’s a market with huge potential. Worldwide, women are estimated to control more than $US20 trillion in annual consumer spending according to Boston Consulting Group. They’ve also accumulated $US72 trillion in wealth, according to The Economist, and by 2028 will control 75 per cent of discretionary spend, according to EY.

In Australia, a recent report by Xero found two thirds of new businesses created in the last decade were founded by women.

Those financial institutions that fail to recognise this value may not only prevent women from realising their full potential but miss out on the economic and social value they can contribute to their country.

It’s a fact Westpac has long recognised, having established a dedicated women’s markets team in the late 90s – arguably the first of its kind. It’s also why we continue to work with the FAW to share the lessons we’ve learnt and what we consider “best practice” with other financial institutions around the world to help them think differently about their current and potential women customers.

I look forward to seeing the impact roll on.

Rachael joined Westpac Group in 2009 after a long career in financial markets in both Sydney and London. From 2010-2016 Rachael was National Manger, Women’s Markets, with responsibility for driving growth of the segment and execution of the Women’s Markets program to position Westpac as Bank of Choice for Women. She currently works in the SME business coordinating all projects that impact bankers and customers, and continues to drive the Women’s Markets agenda across Business Banking. She is also Deputy Chair of Women of Westpac Employee Action Group.

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