Health and Healthcare Systems

Two ways to make the COVID-19 recovery more inclusive for women

Personal bankers wait for customers at the reception of a HDFC Bank branch in Mumbai November 17, 2012.

Hiring more women can help banks better attract and respond to the needs of female customers Image: REUTERS/Vivek Prakash

Leora Klapper
Lead Economist, World Bank

Millions of women are out of work as the COVID-19 pandemic shuts down economic activity in wealthy and poor countries alike. The IMF warns of drastically slower growth through 2021, setting us up for a slow recovery.

Now is the time for businesses to lay the groundwork for long-term changes that could help women bounce back from the pandemic's economic fallout. Our new report, Advancing Women's Digital Financial Inclusion, written for the G20 Global Partnership for Financial Inclusion by the World Bank Group in collaboration with the Better Than Cash Alliance and Women's World Banking, highlights 10 policy options to harness women's digital financial inclusion to improve their economic participation. Let’s talk about two.

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1. Hire more women at all levels of the financial industry

The World Bank's Global Findex database shows that women are less likely than men to have digital financial services such as bank accounts. Without those services, women struggle to get a foothold in the formal economy.

Unfortunately, women are under-represented in the financial services industry at all levels. A study in India found that women make up only 22% of bank employees and 12% of microfinance institution employees. The resulting male-oriented culture makes it harder for these institutions to attract and serve female customers. The lack of female talent at the top is also a problem for wealthy countries. McKinsey reported that only 19% of C-suite positions in US finance are held by women, slightly less than average for US industry overall.

Businesses can help address the financial inclusion gender gap by increasing women's visibility in client-facing roles in financial services. Evidence from India suggests that women use financial services more often and effectively when they are served by female bank employees. And some research argues that female banking agents land more transactions and have a higher transaction volume than their male counterparts. Companies with a higher share of female employees might be more innovative, which could help them design new products for underserved women.

Simply put, banks and other financial services providers must address their own internal gender imbalances to attract and meet the needs of all customers.

The percentage point differences in the numbers of men and women with a bank account
The percentage point differences in the numbers of men and women with a bank account Image: World Bank Global Findex Database

The percentage differences in the numbers of men and women with a bank account

2. Ask financial institutions to collect more sex-disaggregated data

Strengthening women's financial inclusion depends in part on getting a clearer picture of the problems we face. If financial institutions provided more sex-disaggregated data, we could establish better financial inclusion goals and monitor progress. Data can also provide insights into which policies are having the greatest impact, or which markets are lagging behind and need additional support.

A wish-list of sex-disaggregated financial inclusion numbers looks something like this: How many of your executives are women? What percentage of your mobile money agents are women? How many female loan officers do you have? Tracking and reporting this data could create costs for financial service providers, but it could also generate commercial returns.

Sex-disaggregated data also allows financial service providers to see the relative benefits of employing women. For more than 15 years, Chile has required banks to report sex-disaggregated data. The Chilean banking superintendent aggregates quarterly sex-disaggregated data and diversity statistics from a gender banking survey, providing mountains of data useful to bankers and policy-makers alike. Strict data privacy and security policies are critical to ensure that this data is only used for righteous purposes.

COVID-19 will leave deep economic damage. A combination of immediate relief and long-term reforms are needed to help women bounce back. Now is a perfect time for businesses to do their part.

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