The financial world has to rethink the way it caters to women: salt.com CEO

Salt, a financial services start-up, seeks to expand the canvas and tailor financial services for women by adopting a community-based approach. It seeks to bring in a paradigm shift in the way women are catered to by financial vendors who have all along had a male-centric approach. Shinjini Kumar, the firm’s co-founder and CEO spoke to Raghu Mohan. Edited Excerpts:

Why do you think financial services industry has not been able to tailor offerings for women despite having so many of them in leadership roles?

There was a time when we saw many women leaders and hoped things would change. But I think we are pretty much back to where we have been largely — which is to pink and shrink products designed for men and hope to sell to women. Expectedly, this is a double whammy. Because women who have elbowed their way in to understanding and using mainstream product feel patronised. And those excluded, continue to be so because nothing except the wrapper has changed!

In our context, the participation of women in workforce itself has been going down and that is also a puzzling phenomenon. In most economies, workforce participation of women went down with prosperity, but then it also came back up as women began to find equal opportunities. I guess in our case, we have cultural issues that are leading to this sustained drop in women’s workforce participation. And, therefore, a large number of women choose to balance, you know, care work at home, professional work, which also they often prefer to do from home, and their financial obligations. I don’t think the industry has got to the point of really thinking about this lifestyle preference and creating something for women. And that’s an empirical insight that we want to use to build Salt (mysaltapp).

Let’s be specific. Banks don’t discriminate on the liabilities side. So, on which part of the credit side do they do so?

It’s fair for you to say that the same type of consumer gets the same type of treatment from financial services. That’s correct. But that applies only to those who can walk in through the door. The lack of privilege stems from the basic fact that women’s access and use of finance tend to be different. Take cash. Women tend to accumulate savings in cash even if they have a bank account. The reasons can be restricted mobility or family dynamics. So, the anti-cash bias hurts women more. In credit, the biases are more explicit as multiple studies have proved. People that get rejected tend to have a profile you know of irregular income, not enough conviction in their leadership, or ability to scale. Worse still is that this is also being coded in artificial intelligence. And there are multiple examples of modern lenders having perpetuated this systemic bias, unknowingly or knowingly.

With all the technology on hand, you could tailor offerings to women. You are saying it’s not happening.

We are still very much selling standard products, using standard channels, barring payments where obviously it’s way, way evolved because it is new technology, new players, even a new regulator. It’s hard to tailor products for client segments, unless demanded by regulators, such as senior citizens or the priority sector. New initiatives or approaches require extensive risk assessment, and often have costs involved by way of time, or even capital. Largely, the regulatory environment tends to kind of equalise, but that doesn’t  necessarily create equal access because there are inequities to be addressed. So, while the industry can say that they are not discriminating to anyone who is eligible, that in itself becomes the barrier for people who are already not equal.

What stops lenders from reimagining the way they go about serving women?

Well, the world of the supply side is primarily male dominated. Also, that they have invested in technology, regulatory compliance, infrastructure, distribution and sales infrastructure, all of which caters to a customer who is already profitable. It’s not like there is a huge and growing supply side to match the demand. So, why would a service provider go around, you know, taking the pain to serve a category of consumer who in any case in popular perception is believed to be “risk averse”, not ready to scale and so on?

Why do you think the Mahila Bank model did not fire?  

When you create a bank that is doing the exact same thing that banks were doing all along and put the name "Mahila’" on it, it doesn’t magically start to work for women. You are effectively creating a proof of failure! So, instead of creating a proof of success, you have created a proof of failure, which is why, you know, people like us have to give this answer. When you want to unlock a new category of consumer, you need to rethink, you need to reinvent, you need to get committed stakeholders who are in it for the long term and I don’t think any of that was happening at Mahila Bank.

When Salt starts operations, under which brand will it offer solutions?

We will be a platform, not an aggregator. While it does not sound differentiated on the face of it, if you have been a user of financial services, you also know that it’s a gap and an opportunity. To this consumer, we will offer curated products to start with from our partners. Eventually, of course, we will want to make our own.