As women's economic empowerment continues to rise, while overall countrywide growth slows, banks must do more to meet the expectations of their female clients and tap into this often neglected and under-served market. 

Designing banking products for women is a tricky business. Adopting the so-called 'pink strategy' – tweaking standard products with a female branding veneer – is likely to alienate the target market. But, failure to move at all could be costly, as women's incomes are growing faster than men's and they make a majority of financial decisions. These were the issues discussed at a panel on 'women and the future of banking' during the opening day of the Inter-American Development Bank's (IADB's) annual meeting in Bahia, Brazil.

In years past, a topic such as this would have been dealt with as one of gender inequality and the need to empower women in poor rural areas. It is a sign of how far much of Latin America has developed when the treatment is about women as entrepreneurs, as the owners of small and medium-sized enterprises and as buyers of mortgages.

On some estimates, Latam's middle class is larger than its lower class and in this environment women may hold greater financial sway. Women are also making up a majority of the labour force for the first time ever. But 40% of women are unhappy with their banks, so there is work to be done to successfully serve a market described in the session as greater in scope than either that of China or Brazil.

The rewards for getting it right are considerable. The IADB's Gema Sacristan, herself a former banker, said that women customers were generally better credits and more loyal, even though they might take longer to reach a decision. They were more concerned than men about the detail and usually wanted to hear about the experiences of others before taking the plunge. Women starting a business are also more likely to need a larger loan than men because their savings rate is generally lower, although this could change with their rising affluence.

Banks quoted as going some way to getting it right with their targeting of the female market were Westpac, Banorte and National Bank of Abu Dhabi. But that is only three – so what are the rest doing? Almost certainly not enough, particularly at a time when growth in many countries has stalled. Rather than tackle this lack of growth by, for example, expanding overseas – a risky venture at the best of times – why not focus on this vast and under-served domestic market instead?

Follow The Banker’s coverage of the IDB meeting. Brian Caplen is the editor of The Banker.

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