Women have a longer average lifespan than man, are better savers and are more engaged in household budget management. Still, they earn less, invest less, and struggle with affording a decent retirement. The cost of the gender-based financial gap is overwhelming.

Global Financial Literacy Excellence Center's research dated March 2021 confirms what we already know: women are less financially literate than men. However, it is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Regardless, the results point to a universal issue that needs to be addressed urgently.

We need to close the financial gap for women, but it's easier said than done for traditional financial tools and service providers. Traditional banking and finance ecosystems target the average clientele, disregarding the gray zone filled with financially illiterate clients. It's the women who rush to help their peers - nowadays, there is a selection of FinTech tools and services made by women for women. The FinTech ecosystem is getting heated up with comparable value propositions, but considering the size of the market gap, the more, the merrier.

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To grasp the total market potential, we have approached one of the pioneers of the financial management FemTechs, Finmarie. Founded by Karolina Decker, Finmarie is a Berlin-based hybrid investment platform and is the first of its kind in Europe.

[Karolina Decker created a solid foundation with two master's degrees in economics before starting her career. Taking the first steps at DnB NORD Polska in Warsaw in real estate financing, Karolina Decker continued her finance career at Deutsche Bank in Berlin. Switching between real estate financing of deals with a volume of EUR 250M per year and compliance, she saw both sides of the coin in banking. She is the founder of the NGO “Mind the Gap” and FinMarie.]

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According to Karolina, the first wave of the pandemic has been handy in terms of women recognizing that they are not even close to their financial goals and doing something about it. In general, self-motivation is the critical element in overcoming financial literacy since bigger financial institutions do not actively do anything about it. Karolina recommends taking a leap of faith and keeping on investing even when the times are tough instead of getting paralyzed by fear.

  1. Karolina, I know that passion is the cement for successful entrepreneurs, and you have a lot of it when it comes to bringing women closer to their financial goals. You coach and help women using Finmarie and moonwalk financial education projects running the NGO "Mind the Gap" and Schulgold. Taking a step back, when was the first time that you realized that this topic is your destiny and decided to do something about it?

    I have a background in the finance and banking sector. I was a compliance auditor for a long time and before that I was working for a big corporation bank in sales. Interestingly, I was always working mostly with men, and it was mostly men sitting at the table—there were no women to be seen except me. And this was constantly the case.

    When we launched new products, they were designed for men, not women. And that really got me thinking: What is wrong? Why are there only financial products that are created by men for men? Is there anything we can do about it?

    We started „Mind the Gap“ NGO in 2017, which is a monthly series of events where we educate women about finance and wealth management. And through these events we got (and still get) a lot of feedback about what women actually want and need. We also did research and found that there are no financial products made by women for women: Nothing that would help women to understand the whole complexity of the finance and banking sector. That's how the idea for Finmarie was born.

  2. That's quite true. When we look at how financial players design products, they seem to ignore the fact that women and men have different financial needs. Even worse, the clusters with little financial education are not taken into account. After so much talk about the importance of personalization and diversification, why do you think this is still an issue in banking?

    Currently, around 21 percent of women earn less than their male counterparts in a comparable role (Gender Pay Gap). At present, women are investing around 30% less than men (Gender Investing Gap).

    In its latest Global Gender Gap Report, the World Economic Forum (WEF) estimates that it will take 217 years to reach income equity between men and women.
    It’s clear that women face a number of challenges -- which is why it’s so important to be bolder when dealing with money. At the very start of your career, or sooner, think about how you can invest your assets effectively and in keeping with your life situation - because one thing is clear: a statutory pension won’t be enough to keep you financially independent after you finish working.

    The question is: What will you do instead? FinMarie works like a personal investment advisor, helping increase your assets in the short or long term, depending on your circumstances and goals.
    With FinMarie all women - young and old, single and married, mothers and workaholics - can learn to confidently deal with finances and navigate the jungle of stocks, funds, etc. By keeping track of decisions to build your wealth, you gain a deeper understanding of your savings and investments, and develop an overview of your personal situation and future financial opportunities.

  3. I consider you a go-to person when it comes to finances and money management, but were there any money-management related mistakes you have made earlier? I, for myself, can single out a particular Wirecard incident :) It could also be enlightening to discuss the negative patterns you observe from your clients and your suggestions for overcoming them.

    When we don’t know what’s going on with our finances, we’re throwing money away and risking significant financial trouble like bankruptcy and foreclosure. That’s why it’s very important to talk about some ways to simplify your finances and get back in control. So, what you can do is to be able to view all of your financial information in one place in a simple and easy to understand format. And moreover, you should stick with whatever institutions gives you the most useful benefits, charges the lowest fees, has the best customer service, etc.

    Breaking bad money habits is not complicated. Just create a budget and commit to following it. An important part of budgeting and investing money involves figuring out what you want to do with your money. Are you eager to get out of debt? Are you eyeing a home purchase? Are you trying to build up your retirement savings? Think with these goals in mind when setting your budget. There's no one-size-fits-all solution to managing money, so figuring out how to improve your financial situation requires some creativity and critical thinking.

  4. Low risk means low returns. Tell me, for a person with an average income, is it possible to create self-sustainability and secure a pension by depending on low-risk investment tools? Or do we need to increase the risk in time gradually?

    An open-ended investment ETFs or mutual Fund (what we have in portfolio) is a type of investment that – like other securities – involves risks. The general principle here is that the risks increase with the opportunities, which means the greater the chances of return for an investment fund, the higher the risks of suffering losses with the investment.

  5. Unfortunately, financial education is not a part of the school curriculum in Germany. I know that you are working with the German authorities to help young people make sound financial decisions (Schulgold). What is it that you exactly do, and how can we contribute? What do you recommend parents with younger kids to catch up?

    Children need to learn about the value of money. It’s already starts at a young age. Also Millennials have recently become the largest percentage within the workforce, and many in this age group will also be the receivers of wealth in the coming years. That’s why is very important to teach them on the value of practical financial management skills and overall financial literacy.

    As Schulgold (https://www.schulgold.com/en/) we offer activities that will help children understand that money need to be divided for different purposes: saving, emergency funds, investment and retirement. It’s very important that they understand how to get the best growth for their money.

    With our High-quality courses on all financial topics in German and English language, we are engaging teens and kids anytime and anywhere.

  6. Let's wrap it up with a controversial topic - as a FinTech and banking expert, how do you approach the crypto topic? What does the future hold, and what are the (potential) pitfalls for retail investors?

    Cryptocurrency has become a global phenomenom in recent years, although much is still to be learned about this evolving technology. There are many concerns and worries swirling around the technology and its capacity to disrupt traditional financial systems. Well, like most investments, crypto assets come with a higher risk but also vast potential rewards. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency and the projects or businesses they facilitate. Moreover, people living in countries with weak currencies may be better off investing in Bitcoin than buying local stocks and bonds. On the other hand, other concern is that it could make it easier for people to commit fraud since it’s not as easy to audit and monitor as traditional currencies.