Can Artificial Intelligence Help To Close The Financial Equality Gap For Women?

Women in America are disproportionately under-served when it comes to financial products and services. They own less than 1% of the country’s wealth, and they hold even less of their own assets.

A new study from the UConn Women’s Center for Research found that women entrepreneurs need more access to credit, training, and capital – including investments – if they want to grow their businesses. That's where AI can help. 

One of the fastest-growing markets in finance is financial management, where artificial intelligence (AI) can be used to make decisions for customers' investment portfolios. As women are statistically more risk-averse than men, AI makes it easier for them to manage their money and reduce these risks.

Women who use an AI-assisted portfolio management service save on average $7000 per year over those who do not. Additionally, the chance that any given woman will experience poverty after retirement has decreased by 40% since 2000 due to saving just 10% of her paycheck each month into a 401(k).

How can women can build wealth utilizing advanced technologies and what should they should consider when looking at different services available on the market today?

Using AI to analyze your income and expenses regularly is a great way to help you better understand where your money goes each month. Most modern financial institutions have apps that will automatically categorize your spending into expense types, making it easy for you to see how much of your paycheck ends up going toward rent/mortgage, food, transportation, entertainment, etc.

Technology is empowering women to build wealth through AI-assisted financial management. Women are now able to invest and manage their finances by using technology that automatically invests and manages money for them. This software provides a unique algorithm for each woman with personalized goals, risk tolerance, income, and age. 

AI software analyzes the data from bank account or credit card statements as well as her spending habits in order to make accurate recommendations about what she should do next financially. Technology has made it easier than ever for women who want to grow their own wealth without having to put time into investing on their own every day.

Ellevest is a great example of AI-enabled wealth management aimed at increasing wealth among women. Some of the goals are not only building wealth but also saving for retirement or financial emergencies.

Ellevest was built with data from an employer survey, which found that women earn 97% less than men in the same roles over their careers and thus require aggressive investment strategies to give them a one-third higher return on their portfolios to achieve the same level of wealth.

Real estate investing is another example of where women are making strides in increasing wealth. A 2014 National Association of Realtors survey found that in the previous 12 months, 3.5 million single women purchased a home, a 37% increase from 2010 and a 64% increase from 2006.

One of the people making this happen is Lakeisha Marion, a passionate mentor, educator, and activist who has devoted her life to empowering African American women. Her Wealthy Women’s Winning Circle provides an all-female space where members can learn about financial literacy while also growing their confidence.

As a real estate investor, Marion helps Miami-located women accumulate wealth utilizing a combination of industry understanding as well as AI-enabled investing tools. AI-enabled real estate investing tools empower women to be able to understand the trends in the market, as well as how to utilize these tools to find the best deals.

“I want to help empower women financially so they can leave a lasting legacy for their families,” says Marion.

Investing in women as entrepreneurs is also an important part of the equation. AI can help women build wealth to invest in their own ventures, as well as efficiently seek funding from angel and institutional investors.

The American Express OPEN State of Women-Owned Business report found that women own more than 9.4 million companies and generate $1.9 trillion in revenue, and it's estimated that by 2020, the number of women-owned businesses will increase at twice the rate of all privately held firms.

One area where AI's impact will be felt most acutely concerns investment opportunities for women entrepreneurs who don't have equal access to funding. There are many reasons why this occurs including historically, women have less exposure and fewer investment opportunities; there are fewer women-owned venture capital firms; when they do make investments, men tend to favor companies run by other men.

AI venture capital tools enable women to connect with women-led funds, diversity-focused funds and analyze the historical record of a fund's portfolio diversity. Crunchbase is a perfect example of how this type of technology can help to make venture capital more accessible to marginalized founders. When you begin to utilize AI to bring more diversity to business owners, you are increasing the possibilities for everyone.

AI is also capable of providing much greater transparency during the early stages in a startup's life when information about them is scarce. This allows investors to make better decisions when evaluating potential investments, and ensure that their investments are diverse.

AI is not the only way to level the playing field, however. There are many small steps that can be taken to help women succeed in business. We need more training opportunities, mentorships, and funding for female-led businesses. We need a shift in mindset about who can run a business and be successful.

All these insights add up to one thing: A woman needs to make investing in herself a priority, and AI can help her do that.

Source: https://www.forbes.com/sites/anniebrown/2021/10/16/can-artificial-intelligence-help-to-close-the-financial-equality-gap-for-women/?sh=3a9d28025857