Austria's first bank for women was recently opened by Raiffeisen in the ski resort town of Gastein. The concept was developed in association with Emotion Banking, which conducted extensive studies about women and finances, and how they interact with banks. Emotion Banking came to the conclusion that women approach finances differently than men do, and that a dedicated bank for women would better serve Raiffeisen's female customers. The current set-up includes an inviting lounge-like interior, that includes a play area to keep children occupied. Female employees assist customers, taking extra time to explain products thoroughly, and to build a strong relationship with their customers.
The concept might be a first in Austria, but isn't altogether new on an international scale. From Citigroup's Women & Co, which we covered a few years ago, to the Royal Bank of Canada, many financial institutions are recognizing that women often have their own needs and goals when it comes to money and finances. And this segemented market is continuously evolving; according to a recent report by research firm Aite Group, "Highly-educated women leaving the U.S. workforce to raise children are creating a new, highly lucrative consumer segment for financial firms." The market, which the group dubbed 'Ivy League Moms', is sized at roughly USD 10 million U.S. households with investable assets of USD 6.5 trillion.
Leading the way are banks for women in Islamic countries. Microcredit providers like Grameen Bank have long placed special emphasis on providing loans to women. In Pakistan, First Women Bank was founded in 1989 and strives for the economic empowerment of women. Saudi Arabian women, although not allowed to vote or drive, have the right to control their own finances, and Saudi banks have been devoting extensive resources to 'ladies banking' over the past few years, with separate entrances, distinct product offerings and a staff consisting entirely of women.
Meanwhile, Bahrain announced it's own first two weeks ago: the first bank for women in the Gulf region. The Masrafy Bank has been granted a licence to start the first Islamic investment bank for women, aimed at targeting high net worth women across the Gulf region. The venture could be lucrative, as studies by backer Abu Dhabi Investment House show that women in the region have funds worth USD 38 billion, with no credible investment avenues for investing those funds in a private and professional manner.
So: is gender-segregated banking the way forward, in all parts of the world? We'd love to hear what you think, so please share your view by adding a comment below, and feel free to include examples of similar concepts that we've left out.
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This women-only bank idea seems to reflect a big cultural difference. I'm not so sure that women in the U.S. would care to be segregated like this Danish example. Rather, U.S. women might prefer to be the inspiration for existing banks to raise the bar of service to new levels. If all banks started by allowing for the way women bank or make financial decisions first, they'd likely serve all people well in the long run, no matter their gender. Women tend to have higher standards of service - so brighter color paint in the interior design or all women bank staff might not be necessary or even address the core changes that need to be made.
Nonprofit microfinance specialists have recognized women's special banking habits, excellent repayment rates, and unmet capital investment needs for years. Check out Women's World Banking at www.swwb.org for just one of the organizations that is extremely savvy about this marketplace -- whether they serve women in the developing world or in already-developed arenas.
I don't think segregated banking is the solution. I feel this would be a step backward not forward for women. Like Andrea said, banks should raise to bar for service. Personally, I choose my banks based on service, interest rates, locations and hours.
I think its great - check out www.firstforwomen.co.za - its an insurance company here in South Africa aimed purely at women!
Our branding studio just created a bank in the historic Dundee neighborhood of Omaha, Nebraska (http://www.dundeebanking.com). Everything about it was designed around the needs of women. In the U.S., women spend 81¢ of every dollar. And in the vast majority of households, women handle the checkbook and make the banking decisions. If you're going to start a bank from scratch, it only makes sense to focus on their needs. Our research showed that women desire convenience most of all, are more appreciative of little details, and want a solution-based bank. They also are more likely to own or start up a micro business. Dundee Bank (which opens this week) doesn't exclude men. It just focuses on the needs of an important and core audience.
Has anyone come across a female specific financial advice firm (i.e. investment and pensions advice rather than banking)?
Do you think there is a market for one?
My name is Mr. Barron Muhammad. I just read the article "Banking on Women" and absolutely loved the idea(s) and goals. I too have an idea of starting a bank. This will cater to the African American community. In 2004, it was reported that African Americans spent $700 billion dollars in that year alone. That's more that what some nations are spending in a year's time. I'm interested in selling the idea or partnering with someone that can help channel the financial power,that we as African Americans have.
Without having read through all the user comments here I would argue that one of the most attractive bits of a "women's bank" is that women have a very different risk profile when it comes to spending and saving money and I would argue that, similar to the insurance industry, women could be offered different premia, i.e. in this regard better interest rates...
In developing countries, this is a welcome service because for a long time women have been marginalized and ignored by most businesses. Yet, in a majority of these countries, women have banded together to save money and support themselves economically for years. They form small groups with trusted friends or family and each lady makes a contribution on say a monthly basis. The women take turns to use that cumulative money to do something to support their families eg. add an extra room to the house, buy household goods, start a small business or send their children to school. Suddenly the banks are realizing there is money to be made here?...duh!
Author of this article made a lot of historical mistakes on Ladies banking in Islamic countries
In 1980 , Saudi Arabia National Commercial Bank (NCB) opened two women-only bank branches in Jeddah and Riyadh
Some facts about Saudi banking category and an outlook on the country
-The Saudi banking system was established shortly after the discovery of Kingdom’s oil in 1939. Economists quickly realized the need for a method of managing the government’s newfound inflow of royalty revenues following World War II.
-Saudi has become one of the largest private banking markets in the world.
-The Saudi Arabian Monetary Agency (SAMA) reported that as of 2006 there are 13 commercial banks with 1,251 branches in Saudi Arabia.
-Considering that 30 percent of accounts worth SR27 billion ($7.2 billion) are opened by women, and that women control 21 percent of the country’s private investments and a fifth of all Saudi mutual funds
-Some estimates by local portfolio managers say up to 60 percent of new stock investors and 40 percent of new real-estate investors are women.
-In 2004, the private banking sector in the Kingdom employed 24,590 workers, including 1,518 women, or 6 percent of the total. A year later the number of total employees in this sector grew by 20.7 percent to 29,685. The number of women in that period of time grew to 2,168, or 42.8 percent over 2004.
-In 1980 , Saudi Arabia National Commercial Bank (NCB) opened two women-only bank branches in Jeddah and Riyadh. Recently the bank opened a VIP Center for Women on Jeddah’s Al-Andalus Street that offers Internet access, brokerage services, special swipe cards to avoid filling out forms to women who hold accounts over SR1 million.
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Hannes | July 17, 2006 11:56 AM