Fintech is frequently touted as a solution to the problems of financial inclusion. Southeast Asia is well-placed to capitalise on the benefits of digital financial services, with a booming regional digital ecosystem and a relatively young tech-savvy, mobile-native population. TFGI’s 2021 report on the Platform Economy in Southeast Asia found that 43% online consumers in the Southeast Asia-6 countries were also mobile wallet users.
A new working paper by Yoke Wang Tok and Dyna Heng, titled ‘Fintech: Financial Inclusion or Exclusion’, examined the role of fintech in advancing the promise of financial inclusion. They found that greater use of fintech was significantly associated with a narrowing of the class divide and rural divide, but it was not positively associated with closing the gender divide.
Good, but not good enough
Tok and Heng’s findings are in line with other recent empirical studies such as those highlighted in The Fintech Gender Gap. Using an Ernst and Young survey based on 27,000 adults across 27 countries, they found that a large fintech gender gap exists in almost every country in the sample – 29% of men use fintech products and services compared to 21% of women. They also found that individual attributes like age, income, education, marital and employment status accounted for a third of the gap, indicating that a gender gap exists even across people with similar demographic profiles. Gender differences in willingness to use fintech products – even if they are cheaper than the alternatives – accounted for half of the remaining gender divide. Responses from the survey suggested differences in attitudes toward privacy, as women reported being less willing to share personal data for cheaper rates.
Another empirical study by the Asia Competitiveness Institute on ASEAN countries also reached similar conclusions. The paper found a persistent gender gap in digital modes of payment. In fact, the gap was larger in more developed countries like Singapore and Malaysia. Overall, the financial inclusion gender gap was larger in older populations, particularly for larger transactions.
Tok and Heng suggested that differences in preference between genders could also be attributed to the design of Fintech applications that are too male-centric and do not cater to women.
Understanding gender-based differences in financial literacy, digital access, and preferences towards technologies and social norms can help governments and businesses design better products and policies to grow women’s digital capabilities. Such digital inclusion practices and policies specifically targeted at closing the gender divide will be necessary to fully realise fintech’s promise of financial inclusion.