Women are in control of
79.2% of all private purchase decisions in Europe and 80% in the US
– key reasons why many banks have women-specific credit card
options. As Louise Naughton reports, specialised card benefits can
attract female customers and may help credit card issuers reduce
NPLs.
Go deeper with GlobalData
What do women want? It is the
age-old question that has plagued mankind since time began, and a
challenge the financial industry is now setting itself to
answer.
Modern women lead busy, demanding
lives and are faced with very specific needs. They often have to
juggle their private lives with motherhood and full-time jobs. As a
result of their lifestyles, women engage with finance in a very
different way to men; an idea that seems to be becoming more
apparent to the financial services industry.
Twenty years ago, Singapore’s
United Overseas Bank (UOB) developed a women-only product called
Lady’s Card and became the first financial institution to recognise
women’s specific needs in financial products.
Despite statistics showing women’s
spending power across the globe increasing at a rapid rate,
financial products tailored specifically to women in other regions
still remain sparse.
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By GlobalDataSo which banks and card issuers
have identified opportunities to market to women, and dared to
enter the female mind?
The report Women’s Card
Concepts: Developing Products to Meet the Needs of Women in
Europe, by Isabelle Lodde, head of consumer credit core
products for MasterCard, identifies significant opportunities for
new card acquisition, upgrades, and incremental volumes.
Lodde says that in order for banks
to take full advantage of these opportunities, they need to forget
about the notion of being “pink and cute” in order to appeal to
female card users.
MasterCard notes in the report that
credit card penetration seems to be low considering that more than
79.2% of all private purchase decisions in Europe are made by
women. European females also make up more than 82% of mass
consumption spending.
In Switzerland 52% of women
eligible for a gold product do not own a credit card in their own
name, and in Germany, only 22% of women own a credit card.
Just 37% of Belgium’s credit cards
are owned by women, and their credit card usage is lower than
men’s.
“Women are not serial shoppers, and
manage the family budget more closely as informed consumers,” said
the report.
“As the buyer for the family, they
have a very pragmatic attitude, and the benefits of proposed
services are evaluated not only on their quality and price, but
also on their expected level and ease of use. For women, money
doesn’t mean ‘power’ but freedom. All security and budget control
features are highly ranked.
“Women must be offered serious,
tangible and innovative services, useful and ready to use.”
During focus groups undertaken in
France in 2006, Lodde told CI that she saw a trend
emerging among women that between juggling being a good mother,
wife and worker, women are recognising more and more that they are
deserving of self-indulgence.
Lodde identified three high-level
concepts that banks and issuers must recognise to meet women’s
needs.
“The first is that women are busy
and never have time to relax,” Lodde said.
“Even when they are sitting on the
tube, they are still planning their day, so time saving features
would be welcomed by women. Women also work to a tight budget and
most check their account using online banking every day. Lastly,
security and benefits to assist women in the protection of their
family are of great value.”
Although French women were the
focus for this research, the concepts can be extended out to
incorporate most European women, with varying intensities. For
example, French women want products that are overtly designed for
them as they celebrate their differences and embrace the fact that
their presence creates diversity in the business world. However
German women are uncomfortable with this idea, and do not want
products that make an obvious separation of the genders.
“German women found the initial
concept of creating a credit card tailored specifically to them
patronising,” said Lodde.
“But once we had explained that we
wanted to address their needs, they warmed to the product. The
German LautitiaCard was developed with this in mind. Its design is
very muted and security features have been made a priority to
appeal to the security-conscious market.”
The La Bred Affinity credit card
launched by France’s Bred bank in December 2007 became the first
credit card specifically designed for women in Europe.
Standard Bank’s MyCard in South
Africa and TEB Bank’s She Card in Turkey are the latest products
designed specifically for women to come on to the market. To
understand their benefits and places in the financial market and
women’s purses, thorough research has been undertaken.
Turkish women analysed
The MasterCard MasterIndex Survey conducted by market
researching company Yontem Research, together with Lodde’s report,
shed further light on women’s credit card habits in Turkey.
The survey has been conducted once
every six months since 1998 in Turkey, and uses a sample size of
1,000 respondents, made up equally of men and women. The results
show that Turkish women have one debit card and one credit card on
average, compared to men who have two credit cards and one debit
card.
Women also use their credit cards
more often for smaller purchases and have more recently obtained
their credit card, suggesting that they are becoming more
interested in the credit card market.
More women made the decision to
choose the credit card with the best discounts and higher limits,
compared to men who focused on the credit cards with the most
instalments and most reward points available.
MasterCard also carried out focus
groups in which the aim was to understand the target audience’s
expectations from a card designed for women, their feelings and
ideas about the card to be launched, and the choice of concept for
the communication of the card. Qualitative research and group
discussion techniques were used.
The results of the focus group
showed the following expectations:
• It should be a bank that women
know, trust and has widespread ATMs;
• It should have privileged offers
and opportunities only for women;
• It should have programme partners
in sectors of women’s interests;
• It should offer advantages and
benefits related to health, personal care and cosmetics;
• It should have insurance against
purse snatching; and,
• It should have a feminine,
elegant, creative, different, silvery, stony design.
The She Card is a MasterCard credit
card which was launched with TEB Bank in June 2010. It was marketed
as “a specially designed credit card for ladies only, which offers
discounts, extra bonuses and special services for certain sectors
and brands”.
Examples of the benefits offered by
the She Card include offers and privileges in sectors such as
beauty, health care and children; and assistance and concierge
services where cardholders can call a tow truck, windscreen
replacer, plumber or locksmith free of charge.
South African spending power
Standard Bank also researched South African women’s spending
power through surveys and organised focus groups in order to
determine what appealed to women in preparation for the launch of
its MyCard credit card last month.
Research in 2008 by Standard Bank
found that 62% of South African women contributed half or more to
the household income. Seventy percent revealed that they were
financially independent, with 49% contributing more than their
partner. Fifty-four percent also said that they controlled the
family’s money, with a further 29% sharing control with their
partner.
A study by South African marketing
institute Black Diamond in 2008 showed that black middle-class
women were becoming an economic force in their own right in South
Africa. They represented a tenth of the country’s entire adult
population and their annual spending power was ZAR120bn ($16.2bn),
more than 40% of the annual spend of all South African women.
Leila Fourie, head of the card
division for Standard Bank, told Cards International that
research into women’s needs and expectations of credit cards had
been underway for the past year, but on a more comprehensive and
intense basis over the last six months.
Fourie said that after the first
round of focus groups, in which the primary source of feedback was
collated, Standard Bank realised that it had not understood the
market properly.
“An important lesson we learned,
which most financial institutions just assume, is that women live
demanding and busy lives and above all else need freedom and
simplicity from their credit cards,” said Fourie.
“Initially, we planned to put cash
rewards straight back into the card holder’s credit account.
However once this was announced we got a clear message back from
the women who participated in our focus groups. Women want
somewhere to save their money to give them some ‘me’ time, and they
want to be able to purchase products just for themselves.”
Using this information, Standard
Bank developed MyGift, a MasterCard prepaid loyalty card which is
directly linked to the MyCard credit card.
“Women have multiple roles and
therefore need freedom as to where they shop,” Fourie said.
“Other credit cards limit where you
can shop, but MyGift allows consumers to redeem their cashback at
the shop of their choice. This hits the mark for women.
“From our focus groups, Standard
Bank found that women have a fundamental problem with credit cards
that are designed for women, but have no substance.”
Examples of the MyCard benefits
include, on diagnosis of one of the seven types of female cancer,
R10,000 ($1,367)being paid into the cardholder’s account. It also
provides access to roadside assistance and a handyman service,
although the client is responsible for all costs involved.
“The bank would have liked to have
got the product off the ground sooner, but we felt that now was the
right time as there has been an increase in the buoyancy of
consumers,” said Fourie.
She claims that the product is
unique as no other credit card offers the full package of MyCard
benefits.
Fourie told CI that the
interest in MyCard had been both positive and heartening. As the
first designed-for-women product launched by Standard Bank, MyCard
will act as a test product and – depending on its success –
Standard Bank will look to make it the first of many
female-orientated products, creating a female credit card
portfolio.
International ambitions
Once the pilot phase is over in around six months, and the
research has been gathered, it will then be decided whether the
MyCard product will be rolled out internationally.
“One of the reasons why the female
population is so attractive to banks is that, based on statistics,
they are 30% more likely to pay bills, which means bad debt costs
are lower for banks,” said Fourie.
“Due to these figures, Standard
Bank has an affinity with women and wants to continue to engage
with them.”
According to Fourie, m-banking,
online and social media are key drivers, and are entrenched in the
female market. Standard Bank is currently in the midst of
researching the different ways in which both men and women engage
with different payment methods, and has told CI that it
will report its findings in due course.
The report A World of
Difference: Build Sales and Share by Tapping into the Buying Power
of Women shows that US women’s spending power has also
increased in a similar way to European women. Yet there are no
credit cards available in the US market tailored specifically to
women.
The report cites figures from US
financial publication The Wall Street Journal which
reported in November 2007 that women brought in half or more of the
household income in 55% of US households.
The US Bureau of Labor Statistics
has also found that over the last 20 years women’s income has
climbed 63%, while men’s has stayed steady at 0.6%. More recently,
in the last five years, working women’s median income has risen 4%
while men’s has fallen 3%.
The report found that women were
the chief financial decision-makers in 80% of US households, made
53% of investments, and influenced more than 60% of new car
purchases.
Women are also driving the new
entrepreneurial surge in the US. Financial website
CNNMoney also reported in July 2004 that two thirds of all
new business start-ups were being driven by women. Consequently
women start up 424 new enterprises every day; twice as many as
men.
US magazine Newsweek
revealed in an article published in June this year that the
financial crisis had accelerated the trend of increasing spending
power in women. American men have lost more jobs and women have
started up more companies, and the pay gap between the sexes has
also started to diminish. Assuming that this trend continues, it is
predicted that the average woman will make more than the average
man by 2024.
Michael J Silverstein, a partner at
the management consulting firm Boston Consulting Group, told
Newsweek that “the financial services industry should take
note of these figures, as this is the number one area where women
say business isn’t meeting their needs”.
Although there are no credit cards
specifically designed for the US female market, US financial
services group Citi launched Woman & Co a decade ago with the
aim of creating a financial service dedicated to women and their
financial needs. It provides a community-based approach to
financial education for women’s personal wealth management.
“Companies will often market
traditional financial services ‘wrapped in pink’, but Women &
Co is different because we provide a comprehensive financial
service created specifically for women,” said Linda Descano,
president of Women & Co.
Distinct
designs
All the credit cards tailored to women that are available in the
market today have very distinct designs. An examples of this is
TEB’s She Card, which has a feminine look with a pink background
and the word ‘She’ written in letters bearing what appear to be
encrusted diamonds in the foreground.
Société Générale was the first bank
to offer a range of credit card designs, but a common theme of
feminine pastel colours and flowers flows through the options
available. The Bonus credit card tailored to women and launched by
Garanti Bank in Turkey features a mirror as its focal design.
Caxia Women, a women’s credit card
launched by Portugal’s Caxia Geral de Depositos comes as a ‘mini
card’ to appeal to women, and again has a floral design.
Designer Roberto Cavalli launched
his own credit card tailored for women in Italy back in February
last year, in partnership with MasterCard. It features a snakeskin
design and Cavalli’s name and logo as the main ‘luxury’ selling
point.
Are pretty designs and a designer
logo all it takes to appeal to the female market? Yes and no, says
Marti Barletta, author of the book Marketing to Women and
president and CEO of marketing consultancy company The Trendsight
Group.
“Women see credit cards as an
extension of themselves,” she said.
“The benefits of the card
definitely do outweigh its design, but women would much rather
carry a card that was aesthetically pleasing.
“I agree with everything that
Standard Bank is doing with the MyCard credit card. The roadside
and handyman assistance are exactly the benefits that women need.
They add substance to the card and it seems that they have really
listened to women and carried out thorough research,” Barletta
concludes.
Lodde told CI that she
believed women were probably still underserved in the financial
services industry, but that the demand and interest shown by banks
in Eastern Europe in tailoring their products to women was a
positive step forward.
Women are a spending force to be reckoned with, and a market
that offers many opportunities for financial institutions to
target. The research already undertaken and the products that are
currently available provide a basis for others to follow, but how
many others dare to enter the female financial services arena
remains to be seen.
