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.
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