Data are a girl’s best friend

The power of sex-disaggregated data: unlocking gender equality in banking and finance

What if bridging the financial gender gap were the breakthrough strategy for global economic resilience? Despite strides toward financial inclusion, significant gaps persist in integrating women in the financial system. Women worldwide face systemic barriers that exclude them from full economic participation – a legacy of historical inequities and persistent social norms. The World Bank estimates that approximately 740 million women globally are still unbanked, and 2.4 billion women worldwide still lack the same economic rights as men (Global Findex, 2021).

From account ownership to financial power

While the gender gap in account ownership has narrowed from 9% to 4% in four years, merely having a savings account does not equate to true financial empowerment. Women are entrepreneurs, community pillars and investors, yet they face a $1.7 trillion financing gap for female-led micro, small and medium enterprises (MSMEs) – a figure comparable to the GDP of Mexico. In addition, in 2017 women-led businesses secured less than 3% of global venture capital funding, and only 10% of senior roles in private equity and venture capital are held by women (IFC, 2019).

The digital divide in finance

Digital finance has the potential to revolutionise financial inclusion, but gender disparities remain stark. A report by the Bank for International Settlements (BIS) reveals an 8 percentage point gap in fintech use between men and women in 28 countries. Even after adjusting for individual and country characteristics, women are less likely to adopt new financial technologies and are reluctant to switch to fintech services, which reveals systemic challenges in accessibility and trust.

Data hold the key to inclusive finance

To bridge financial disparities, sex-disaggregated data – which separate financial information by gender – are a crucial tool. These data help policymakers and institutions identify market gaps and opportunities for inclusion.

• Supply-side data from financial institutions provide insights into account ownership, loan uptake, repayment rates and use of financial products broken down by gender.
• Demand-side data capture consumer behaviours, financial preferences and barriers collected through surveys and research

By leveraging these insights, institutions can tailor financial services to better meet women’s needs, disrupt entrenched biases and improve access.

Systemic change through collaborative efforts

For sex-disaggregated data to drive real change, systemic collaboration is essential. Policymakers, financial institutions and regulators must work together to mandate high-quality data collection and incentivise banks and fintech companies to integrate gender-specific insights in decision-making.

Beyond social responsibility, investing in women makes business sense. Banks that lend to women-led enterprises experience a 53% lower non-performing loan rate compared to men-led businesses (IFC, 2022). This shows that tracking customers by gender is not just a fairness issue, it is a profitable strategy.

Data as catalysts for economic resilience

Sex-disaggregated data are not just a tool for financial inclusion, they are a catalyst to unlock economic potential. By making financial systems more responsive to women’s needs, the sector can drive global economic resilience. The evidence is clear: when it comes to financial empowerment data are indeed a girl’s best friend.

References

Alonso, T. & Dezso, D. (2024), “Supply-Side Gender-Disaggregated Data for Advancing Financial Inclusion,” CGAP

Bruhn, M., Hommes, M., Khanna, M., Singh, S., Sorokina, A. & Wimpey, J.S. (2017). MSME finance gap: assessment of the shortfalls and opportunities in financing micro, small, and medium enterprises in emerging markets.

Chen, S., Doerr, S., Frost, J., Gambacorta, L. & Shin, H. S. (BIS, 2023). The fintech gender gap. Journal of Financial Intermediation, 54, 101026.

Demirgüç-Kunt, A., Klapper, L., Singer, D. & Ansar, S. (2022). The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19, World Bank Group.

IFC (2022). Banking on SMEs: Driving Growth, Creating Jobs. Global SME Finance Facility Progress Report.

IFC, RockCreek, Oliver Wyman (2019). Moving Toward Gender Balance in Private Equity and Venture Capital