Over the years we have witnessed and celebrated women in the region becoming better educated, more affluent, highly skilled, and increasingly independent. They are a unique segment with their own needs, which vary due to age, profession and region and, therefore, naturally require banking services that cater to these varying needs.
There are many ways in which Islamic banks can effectively target this segment but the approaches they adopt must be serious and move beyond traditional marketing approaches, which have only thus far scratched the surface.
It goes without saying that this is a large and untapped need in the market. An area that Islamic Banks could leverage is to provide women with a platform that meets their need to be safe and feel secure. Our PwC research, What customers want: Customer insights to inform growth strategies of Islamic banks in the Middle East, suggests that rather than a single online offering for both genders, men will be more receptive to a product that saves time and effort, while women want a platform that is easy to use and offers security in an emergency. In particular, respondents said that being able to make emergency money transfers or get faster responses for their bank than through a branch was attractive to them.
Other areas for innovation extend beyond platform and delivery. There’s an opportunity to develop very strong service propositions that take advantage of the fact that women are more loyal customers, with far fewer females open to the idea of switching their accounts than men. The report also found that 35% of women would not consider changing their bank accounts, compared to 25% of men. Islamic banks could do well to focus more attention on understanding what women customers want and how to better serve them.
PwC research suggests that while more women visit branches than men, women are less frequent visitors, as only 10% women polled used a branch more than once a month versus 30% of men. Islamic Banks haven’t done more partially because of cultural reasons and partially because of issues around physical access to banking. The advent of digital banking and mobile banking has provided important avenues for women to access banking without compromising on cultural values or without the need to mingle (if they chose not to). Also, the rise of female education levels and skills have also suddenly accelerated the need to serve this market. The majority of female respondents to our survey said that their preference is to use online banking. Women also rated online and mobile banking platforms as very important when selecting a bank. This suggests that a compelling digital offering could be a far more significant factor in attracting new female customers than a much costlier effort to develop a network of women only branches. Bricks and mortar investment to segregate branches will increasingly lose value as women use more services online. The assumption that women are best served via female only branches could soon become outdated and a better model could be developed around a robust digital strategy.
One would think all Banks (including Islamic Banks) would immediately see the opportunity to serve this important, growing, influential and affluent segment of the market. And indeed, there has been significant progress in several areas. Many regional Islamic Banks (especially those in KSA) in the region have provided women with female only branches, or entrances or timings (eg Johara Banking). Others have innovated by providing highly tailored products such as scented cards. However, perhaps Banks can dig deeper in to customer data to spot other new opportunities.
Better education, access to education and leadership means more prosperity and economic freedom for women. Research conducted by PwC’s Global Islamic Practice indicates only 8% of GCC women do not have their own independent accounts. Similarly, Islamic Banks should acknowledge that just as women may control 27% of global wealth (~$20Trillion in 2010, expected to grow to 32T+ in 2015)), in the Middle East they may also control nearly 22% of regional wealth, some $500B according to BCG. Recent UBS/Wealth-X analysis suggested there are 105Ultra High Net Worth (UHNW) females in UAE and Saudi alone, accounting for over $22B of wealth. Other investment research provides the interesting view that women are investing this wealth across diverse asset classes with a higher likelihood of investing in safer commodities.
More business and financial leaders will be women so positioning early for this rise will help Islamic Banks. Islamic Finance focus on ethical banking fits well with empowering this undeserved segment. Similarly, providing product features like scented cards only is a start but ignores more fundamental needs and drivers discussed earlier such as the need for security, independence and safer investing. Might it make sense to meet the emerging financial needs of women by developing customized products that address investment needs, educational needs of their children, mortgages etc?
Again, senior female executives may have needs similar to other successful men executives of similar high income or wealth levels. Nuances in terms of features and delivery should be determined through solid customer analysis and needs analysis This conversation comes at an interesting time not just for female consumers but for Islamic Banks as well. The industry continues to grow but Islamic Banks are still trying to innovate and operate as efficiently as their conventional counterparts. Growth rates are higher and so is the market potential. So many are seeking growth opportunities outside core Islamic customers, appealing to ethical and other interests. As women increasingly become an economic force to reckon with, it makes eminent sense to focus on a segment in a region continually evolving to empower its daughters and wives. It also makes good business sense as it recognizes the future value of this segment. It’s also a vote for growth – locking in female customers means potentially tapping into younger households as women still manage homes and are raising the next generation of banking customers.