The fintech gender gap

Summary

Focus

Financial inclusion is a key goal for policymakers around the world. Yet women remain unbanked or underbanked relative to men: they have lower access to transaction accounts, credit and other financial services. Hopes are high that new financial technology ("fintech") can enhance financial inclusion and close the gender gap in access to financial services. Yet evidence on adoption rates of fintech products and services by gender has so far been scarce.

Contribution

We use a novel survey of over 27,000 adults from 28 major economies to investigate gender differences in the adoption of new financial technology. The survey asks detailed questions about individuals' use of and attitude towards 19 categories of fintech products and services provided by fintech entrants and by traditional financial institutions. It also includes individual characteristics. This allows us to systematically assess gender differences in the use of fintech and potential drivers at the individual and country level.

Findings

The survey shows a large "fintech gender gap": while 29% of men use fintech products and services, only 21% of women do. The gap is present in almost every country in our sample. It is roughly the same size for products provided by fintech entrants and those offered by traditional financial institutions. The econometric analysis reveals that country characteristics and individual-level controls explain about a third of the gap. Gender differences in the willingness to use new financial technology or fintech entrants if they offer cheaper services account for over half of the remaining difference.

Abstract

Fintech promises to spur financial inclusion and close the gender gap in access to financial services. Using novel survey data for 28 countries, this paper finds a large 'fintech gender gap': while 29% of men use fintech products and services, only 21% of women do. The gap is present in almost every country in our sample. Country characteristics and several individual-level controls explain about a third of the unconditional gap. Gender differences in the willingness to use new financial technology or fintech entrants if they offer cheaper services account for over half of the remaining gap. The paper concludes by suggesting potential explanations for the gender gap and implications for challenges in fostering financial inclusion with new technology.

JEL codes: E51, J16, O32

Keywords: fintech, gender, financial inclusion, personal data, privacy