Islamic banks in the Middle East are "extremely well positioned" to take capture a share of women's rapidly growing demand for top-notch banking services, says a new publication from the Boston Consulting Group (BCG).
With an estimated $5 trillion in incremental earnings to spend, educated, ambitious, working women represent a commercial opportunity for goods and services providers that eclipses the rise of the consumer economies of both China and India, the management consulting firm said.
It said Islamic banks were in pole position to play a role in the women's banking arena, because they offer unique elements in the sector including a pre-disposed distribution network with some Islamic banks already off women's sections/branches due to Islamic traditions surrounding privacy.
It also said halal products were important for women, especially as they think about setting money aside for their children. It is important for money that is passed down to the next generation to be 'clean'.
BCG said the growing demand by women for financial services should prompt Islamic banks to systematically target this emerging market, work to understand women's dissatisfaction and change their offerings to profit from, and help boost this most important commercial opportunity.
The Middle East in particular was a rapidly growing market for banks to explore as more Arab women are entering the workforce and making important financial decisions, it added.
Companies should view Arab women as a fast-growing consumer segment and be prepared to adapt their offerings accordingly.
BCG estimated that women in UAE control approximately AED250 billion in household assets, with 70 percent of them owned by Emirati women or Arab women expats. Some of this is family owned wealth, but with female earning power growing stronger, women will continue to earn more money from their jobs. Currently, women in the UAE have an annual income of AED2 billion.
Michael J Silverstein and Kate Sayre, authors of BCG's Women Want More: How to Capture Your Share of the World's Largest, Fastest-Growing Market, said: "This 'female economy' will be replete with opportunities for companies to capture new consumers, increase market share, and open new markets.
"This is because surveys show that women are dissatisfied with the products and services available to them in many catagories, largely because companies misunderstand women's issues and fail to answer their needs. The areas with the most expressed dissatisfaction are three of today's most important consumer-goods categories: financial services, health care and consumer durables."
Dr Mohammed Badi, principal in BCG's Dubai and New York offices added: "Women want someone to walk them through the facts and help them understand their financial options, with clear information, educational materials and more engagement with advisors. Additionally, there is a strong business case for improving the quality of financial services for women in the Middle East, given the growth of female incomes and purchasing power."